EDI Stands for Electronic Data Interchange.
To understand the need for EDI, lets take a business flow and transactions involved. Company "C" is a manufacturer and regularly buys raw material from Supplier "S" that would typically involve below transactions for each purchase done.
1. Buyer at Customer "C" enters a Purchase Order in his computer system
2. Buyer sends the PO through email or fax or mail to Supplier "S"
3. Sales team at Supplier "S" validates the PO to ensure that required information is provided
4. Sales team at Supplier "S" enters a Sales Order in his computer system
5. Sales team at Supplier "S" sends the Sales Order acknowledgment to Customer "C" through email or fax or regular mail
Imagine the cost, cycle time, money and risks of data entry errors involved in the above process. What if computer system at Customer "C" exchanges data with computer system at Supplier "S" using an intermediate communication link ? Yes, that's the idea behind EDI.
Organizations that send or receive documents between each other are referred to as "trading partners" in EDI terminology. Trading partners are free to use any method for the transmission of documents. Few of the transmission mediums used are Value Added Network (VAN), Internet/AS and Web EDI.
EDI translation software, popularly known as Translator, validates the partner and checks if the data received meets the standard formats defined before converting it to a desired file format which can be read and imported by the receiver's computer systems (for e.g. ERP)
EDIFACT & X12 are most widely followed EDI standards. The standards prescribe the formats, character sets, and data elements used in the exchange of business documents and forms.
Oracle e-Commerce gateway (earlier EDI gateway) module helps organizations meet their EDI requirements with flexibility to use choice of your translator, EDI standard and yet tightly integrates with other modules from Oracle.
