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Overview: How Does EDI Work?

EDI (electronic data interchange) is achieved once your organization and your trading partners both have an EDI software solution that communicates seamlessly together. But how does electronic data interchange work? EDI works by utilizing four main components that make up the EDI infrastructure:

  • Standards
  • Translation software
  • Integration
  • Communication (VAN)

To answer the question, “how does EDI work,” you’ll need to understand a few pieces and processes involved in EDI.

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Onboarding Process for EDI

Before anything, your trading partners will each provide you with a unique implementation and onboarding guide. This will include the types of communication methods and versions, such as X12 or EDIFACT, and their relatable versions 4010, 5010 and other compliance standards. Included in the implementation guide will also be the frequency of transmission and the types of documents required to exchange.

Now You Can Begin EDI Transmission

EDI Document Translation

The next step is to begin the translation of your documents into an EDI format. Below, you will see raw EDI data and formatted EDI data. Your EDI translation software will take raw EDI data and reformat it to be easy to read and understand. The EDI data has a few variables you should understand when reading the transmission of your documents. The below information provides the foundation for understanding EDI variables and how they operate within your EDI software, helping to answer the question, “how does EDI work.”


Let 1 EDI Source Answer the Question, “How Does EDI Work,” for You

EDI is a critical component in any business’s organization to ensure optimum operational efficiency. At 1 EDI Source, we can help with our comprehensive suite of EDI software products, guiding you toward successful EDI implementation and integration processes that are simple and stress-free. Our team can review your business requirements and recommend an EDI solution that meets your needs and budget.

Download our EDI 101 Guide today to jump-start your EDI education and further answer the question, “how does EDI work.” Have a question or need more information? Read our EDI Buyers Guide, or reach out to our EDI experts today. Our EDI professionals are here to support you every step of the way.