Electronic data interchange (EDI) allows connectivity between two or multiple endpoints to enable data transfer between them. This way, organizations can improve cooperation and data exchange with trading partners or even across internal departments. Being introduced over five decades ago, EDI is still widely used in many industries, including healthcare, manufacturing, logistics, and retail. Hence, for global supply chains, EDI has become an unavoidable subject. This means that even if an organization relies on modern API to exchange b2b data and business documents with its trading partners, sooner or later, it will face a need for EDI integration.
In this article, we explain what issues organizations encounter when relying on EDI for business data exchange and suggest a modern iPaaS-based solution helping to overcome those issues efficiently.
When EDI was introduced to the global trade business, it aimed to replace manual, paper-based, and error-prone transactions between trading partners with standardized electronic messages sent and received through a web of a business-to-business communication network. Today, EDI allows organizations to exchange various documents, such as invoices, purchase orders, and shipping notices, to streamline supply chains and improve business processes. However, the biggest challenge of using EDI is the need to translate and validate each and every EDI message received. To understand why this is the case, let’s look at what EDI translation and validation are and why it is critical to have these procedures as a part of your EDI routine.
What is EDI translation, and what issues does it address?
The EDI translation procedure refers to converting the EDI data into a format the receiving system can understand. At this point, you might have a question – if EDI was invented to bring standardization to the market in the first place, why is it not understood by default and needs to be converted? And there are at least three reasons.
- Discrepancies in EDI data formats
Although EDI was supposed to become a way to standardize the data exchange between organizations and trading partners, there is still no one common standard that would be accepted and used across the globe unanimously. Instead, there are two commonly used formats - EDIFACT, primarily popular in the EU, and ANSI X12, which is used in the US and popular in Asia. Besides those two, organizations may also use JSON, XML, and, of course, a number of EDI-based proprietary message formats developed by organizations in-house.
With such a variety of data formats existing today, all EDI transactions require translation from one format to another to make EDI data understandable for IT systems of all parties involved in EDI message exchange. - Character limitation of certain fields in EDI messages.
Another common EDI issue today is the character limitation of a particular field in an EDI transaction. An excellent example of where you can encounter such limitations is working with ocean carriers. Sometimes, carriers support up to a certain number of chars in specific fields in their system. Usually, it is defined by the INTTRA standard that most carriers try to follow. For example, in EDIFACT, max 140 chars can be supported for party addresses. So, if the address field in messages you send or receive implies more than that, you are in trouble. To deal with such a situation, the message needs to be truncated and translated according to specific requirements from the carrier side. - Different internal coding systems
Last but not least is an internal coding system that might vary from company to company and from business to business. For instance, ocean carriers often use package and container codes that are different from what a shipper, forwarder, or their customers use in their own systems. So, again, these codes need to be converted to the specific required format. Otherwise, those who work with such a carrier will be incapable of attributing the information received via EDI to the consignments in its internal databases.
Although these three issues are the most common challenges users of EDI encounter, they are unavoidable. So, if you are planning to work with EDI, you need to consider EDI translation processes a part of your EDI messaging routine.
What is EDI validation, and what issues does it address?
In the B2B integrations, the quality of the data integrated parties exchange plays a critical role. Hence, before accepting an EDI message from trading partners, the messages should be validated. Validation refers to checking the EDI message for errors and ensuring it adheres to the required standards, such as syntax rules and data element definitions. Unlike the translation part, the validation process seems pretty straightforward. However, it requires a business logic that should not only check every EDI transaction set for errors, discrepancies, or anomalies and reject those messages unless all the issues are fixed but also generate alerts and inform the sender about issues.
As seen above, EDI translation and validation are unavoidable if a company wants to process EDI messages automatically. By combining these two, a company can significantly improve EDI data exchange with all its trading partners and elevate the efficiency of business processes.
iPaaS-based solutions that ensure hassle-free EDI messaging routine
Traditionally, EDI translation and validation have been complex and time-consuming processes. Organizations had to rely on expensive and hard-to-maintain software solutions or hire an in-house team of EDI experts to handle these tasks. Due to a high cost of ownership and a slow turnaround time for EDI transactions, such methods are not viable in modern business reality.
In recent years, a number of new cloud-based tools and iPaaS solutions have emerged, which made it easier for organizations to manage their EDI integrations and exchange EDI documents with their trading partners.
Such solutions are usually available as a managed service, allowing organizations to outsource the management of their EDI transactions entirely or partially. This way, organizations can ensure the EDI messaging process without investing in expensive hardware and software infrastructure and employing and managing EDI experts. Plus, such solutions are also more scalable and flexible, allowing organizations to adjust to changes in their EDI needs easily.
Youredi, the leading provider of fully managed data integration services and solutions for logistics and the global supply chain, offers an iPaaS-based service that helps to overcome all the issues outlined in this article.
Relying on us, you can rapidly connect with your value chain regardless of the technical capabilities you or your partners have. You can share information efficiently without changing anything in your data format or IT system. All the translation and validation work will be done in the Youredi iPaaS environment automatically, according to the business logic designed based on your or your partner’s requirements. Suppose we spot any issue while validating your EDI messages. There, our solution will send alerts to the message sender and to your system (via API, email, or any other way convenient for you) unless the issue is fixed.
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