History of EDI



History of EDI

Although the business computer enabled companies to store and process data electronically, companies needed an expedient method to communicate the data. This method was realized by the widespread use of computer telecommunications. Using telecommunications, companies could transmit data electronically over telephone lines, and have the data input directly into a trading partner's business application. These electronic interchanges improved response time, reduced paperwork, and eliminated the potential for transcription errors.  Computer telecommunications, however, only solved part of the problem.

Early electronic interchanges were based on proprietary formats agreed between two trading partners. Due to differing document formats, it was difficult for a company to exchange data electronically with many trading partners. What was needed was a standard format for the data being exchanged.

In the 1960's a cooperative effort between industry groups produced a first attempt at these common data formats. The formats, however, were only for purchasing, transportation, and finance data, and were used primarily for intra-industry transactions. It was not until the late 1970's that work began for national Electronic Data Interchange (EDI) standards. Both users and vendors input their requirements to create a set of standard data formats that:

  • were hardware independent;
  • were unambiguous, such that they could be used by all trading partners;
  • reduced the labor-intensive tasks of exchanging data (e.g., data re-entry); and
  • allowed the sender of the data to control the exchange, including knowing if and when the recipient received the transaction.

Although today there are many syntaxes for EDI, only two are widely recognized: ANSI X12 and the Electronic Data Interchange For Administration, Commerce, and Transport (UN EDIFACT).

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