What is EDI and Why is it Important?

lectronic data interchange (EDI) is a standard format companies use to exchange business information electronically instead of using paper documents such as purchase orders, inventory documents, and shipping orders. EDI format standards ensure that businesses can communicate with multiple partners in a universal language. This enables EDI systems in different cities, states, or countries to quickly and easily exchange information, improving transaction speed and accuracy.

In 2021, as in previous years, the biggest B2B electronic sales channel was electronic data interchange, which accounted for 76.5% of all digital sales. EDI generated electronic sales of $8.38 trillion in 2021, up from $7.73 trillion in 2020. As eCommerce sites and marketplaces proliferate the industry, EDI is still a reliable method of automating manual B2B exchanges. 

EDI is capable of handling large transactions securely which is crucial to B2B transactions. Here’s a look at why EDI is important in the B2B transaction process.

Manual processes are notoriously inefficient and time-consuming. They lack the agility and seamless scalability needed to meet growing business needs. By automating paper-based transactions, organizations can save time and money, and eliminate errors caused by manual processing.

EDI technology enables businesses to share information in a seamless manner that eliminates the many touchpoints of traditional paper-based data sharing processes. Modernizing the data exchange process will reduce delivery time, improve backend processes, and lead to better customer experiences.

The automation of data exchange through EDI contributes to increased workforce optimization. Rather than spending time processing paper documents or translating files from one format to another, business associates and partners can seamlessly exchange information with each other, enhancing communication and collaboration. 

EDI technology also improves visibility and reporting because electronic documents can be integrated with a range of IT systems to support data collection, analysis, and data-driven decision making. It improves workforce productivity as businesses can reassign employees from manual, repetitive tasks to more critical, value-adding responsibilities.

Traditionally, customer service representatives are tasked with manual order entry processes and requests for shipment tracking and invoices. They manually take orders over the phone, enter them and take calls to provide tracking information or address requests to provide customer documents such as invoices. This cumbersome and inefficient process leads to slower response times, frustrated customers, and poor customer experiences.

The last few years have challenged companies to modernize their businesses and leverage technology to come up with a better way to get customers what they want, when they want it. Many traditional systems just don’t cut it anymore as customer expectations have dramatically changed along with their shopping habits. EDI solutions provide greater visibility, making it easier for businesses to keep customers informed of order changes, delivery dates, and other important information. This helps increase customer satisfaction and minimize delivery delays.

Using EDI to transmit business documents digitally can help companies simplify and streamline their business operations, increase delivery speed, and cultivate better relationships with business partners and customers.

For more information about how you can use EDI technology with our delivery management solution to manage your delivery operations more efficiently, from the first mile to the last mile, please contact info@bringoz.com.