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5 EDI Terms You Should Know

Adam Hughes
EDI (electronic data interchange) is a proven technology that powers many of the complex and modern business processes

Whether you’ve just started doing electronic data interchange (EDI) or are considering deploying the technology to meet a partner mandate or industry requirement, trying to become familiar with the technology and the various EDI terms can seem daunting.

EDI is a proven technology that powers many of the complex and modern business processes that we take for granted every day:

While most people never truly grasp every aspect of EDI and EDI standards, it’s important to understand EDI’s relevance and how it can help organizations generate a competitive edge, regardless of industry.

Whatever your level of EDI experience, there are several EDI terms that you are certainly aware of. Common terms and phrases when dealing with a trading partner might include bill of lading, confirmation, file transfer protocol (FTP), purchase order, and Web Services. But EDI is a vast topic, and there are many other EDI standards and terms that could be beneficial to know.

Whether you have an EDI solution, are planning one in the future, or aren’t considering EDI at all, it still may be helpful to learn some basics about the data movement and integration technology that powers so much global commerce.

Without further ado, here are a few important EDI terms to know.

  1. Acknowledgment – A response to a command that is sent to the originator to confirm the message was received. There are different types of EDI acknowledgments, ranging from basic-communication level statuses to a functional acknowledgment. A functional acknowledgment is a message sent from the receiver of a transmission to the sender to indicate that the message was accepted.
  2. Advanced Shipping Notice – A common EDI transaction, an ASN is notification of a pending delivery, its primary purpose is to provide tracking and packing information ahead of a delivery. Some of the most common elements included in an ASN are purchase order number, ship notice number, and the location where the product will be shipped.
  3. Invoice – An electronic version of a document that a vendor sends to a buyer indicating how much is owed for goods and/or services. Usually, it is sent in response to a purchase order, which is a request for payment once the goods or services have shipped. They typically contain shipping details, payment terms, information on the goods and/or services.
  4. RESTful Web Services – Representational State Transfer specifies constraints that when applied to a Web service improve performance. As APIs become more common, REST architectures are useful because they allow data to be transmitted over a standardized interface, such as HTTP. They are stateless, and often are compared to Simple Object Access Protocol (SOAP), but are viewed as a simpler alternative.
  5. Translation – Common in EDI, translation is the process by which information is converted into different formats. The receiving computer has a translator that knows where to find the buyer’s company name, order number, purchase items, and price, among other things. After that, the information is delivered to the receivers’ order entry to eliminate any manual order entry and expedite the transaction.

These are just a handful of EDI terms that are commonplace in the enterprise, but there are certainly additional high-value EDI terms to know.

For a more in-depth look at EDI, and to help you gain an understanding of other critical electronic data interchange terminology, download a comprehensive list of important EDI and integration terms and better understand the data movement and B2B integration technology requirements of modern businesses.

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