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EDI Academy - How does EDI technology work?

01/09/2016

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In this latest chapter of the EDI Academy series, we find out a little more about the workings of this electronic data transmission technology. In other words, what happens from when the issuer creates an EDI message until it reaches its destination. Although the process may seem complex, the fact is that it takes place practically in real-time and can be split into three main steps.

Data extraction

First of all, the issuer has to construct the document they want to send, which may be an invoice, purchase order, shipping note, etc. In general, the data needed to put the documents together reside in the internal information system of the Issuer. So, it is in their systems, and based on a proposal previously defined between the issuer and the EDI provider, where the ingredients which will subsequently be cooked up in the EDI station are prepared.

Once the information to be sent is ready, the ERP or internal management system automatically communicates with the EDI software and transfers the data in the format and structure agreed, usually a simple TXT file, which any ERP should have the capacity to generate.

Creating a standard message

The next step consists of transforming this document into the standard the recipient expects to receive. As we explained in previous editions of EDI Academy, the multiplicity of formats and communications systems can complicate communication between two partners. However, the EDI solution from EDICOM is able to carry out this process automatically and, especially, transparently. The diagram below is a good example of the process to which we refer.

The software identifies the type of transaction to be carried out and the recipient. Next, the mapping module comes into play, translating the data into the appropriate standard and forwarding it through the communications system agreed (WebService, AS2, OFTP2 etc.). This task is performed in a matter of seconds, with no need for human intervention.

Then, the document is usually kept securely stored in the cloud so that the user can check up on it when necessary by means of a simple file search. This is the most recommendable procedure, especially for dealing with sensitive documents such as electronic invoices, where there is a legal duty of safekeeping of the original e-document under regulated conditions for a minimum period of time. The recommendation, but not the obligation, also extends to other documents (purchase orders, shipping notes, etc.), although the storage conditions and the period of time will depend on the service conditions and what is agreed with the EDI provider.

Document integration

On the other side of the EDI communication flow, we find the partner or recipient. When the message reaches the recipient, their EDI software must automatically identify the sender and the type of transaction. Then, it transforms the document into the data structure of its own ERP (SAP, MICROSOFT DYNAMICS, SAGE, etc.). As both solutions are integrated, users can check on the status of the documents directly from their own internal management systems.

 

Would you like to know more about this technology? Check out all the posts in our EDI Academy series.

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