The EDI (Electronic Data Interchange) system, is the electronic exchange between trading partners of business information in a standard format. This process allows one company to send information to another company electronically, instead of using paper.
By moving from the exchange of paper-based business documents electronic documents, businesses enjoy benefits such as reduced cost, increased processing speed, fewer mistakes and better relationships with business partners.
Electronic Data Interchange Pre-Dates the Internet Era
The origins of the EDI system date to the immediate post-war years and the assistance given to the recovery of devastated European nations, a project require vast amounts of data and logistical requirements. The development of EDI has led to a situation where today it can apply to the simplest of transactions. All a seller needs from a buyer is the correct electronic formatting of the buyer’s name, the purchase order number, the items being ordered, the price for each item and that data can be instantly and automatically fed onto the receiver’s order entry system without requiring any manual order entry.
Here's a film showing you how all this is achieved: