All EDI transactions are defined by EDI message standards. It is important to have good governance processes for data quality. When information is missing or in the wrong place, the EDI document might not be processed correctly.
Standards are the basis of EDI conversations.² There are several organizations that define the EDI message standards, including ODETTE, TRADACOMS, GS1, PEPPOL and the Accredited Standards Committee X12 (ASC X12).
In general, EDI transmissions can be broken down into two basic types:
- Point-to-point or direct connections. Two computers or systems connect with no intermediary over the internet, generally with secure protocols.
- Value-added network (VAN). A third-party network manages data transmission, generally with a mail boxing paradigm.
EDI internet transmission protocols include Secure File Transfer Protocol (SFTP), Applicability Statement 2 or AS2, an HTTPS-based protocol, Simple Object Access Protocol (SOAP) and others.
EDI data is made up of data elements such as sender ID and receiver ID. Data segments combine two or more related elements to give them greater meaning, FNAME and LNAME can combine to form CUSTOMERNAME for example. Envelopes structure different types of data and carry the sender and receiver address information.
EDI document flow or message flow describes the movement of EDI messages to various inbound and outbound addresses and departments to execute a business process or transaction.³