Electronic Data Interchange (EDI) is a critical part of large business operations, yet it remains a mystery to those outside its immediate users. EDI came about in the late 1960s and early 1970s as transportation organizations sought a way to communicate more effectively with vendors and customers. Eventually, standards were developed which made it possible for companies to send common business documents--purchase orders and invoices, primarily--from one company to another using computer systems. The advent of the Internet has changed EDI as companies have begun to take advantage of additional capabilities that the Internet offers. In addition, small and medium sized companies have access to the Internet where they typically did not participate in EDI. It is unlikely that EDI will be supplanted by the Internet, and far more likely that EDI companies will integrate the Internet into the services that they offer.
Electronic Data Interchange (EDI) is one of the few technologies that has survived largely intact from the 1970s to the present. EDI has gone largely unnoticed by the retail consumer, but it is an integral part of American--and international--business at the largest companies. EDI makes it possible for companies to communicate directly with each other's computer systems and send documents such as purchase orders and invoices from one company to another without human interaction. The result is less paperwork, fewer errors, and decreased purchasing cycles. There have been significant cost savings realized as a result of EDI being integrated into the market, although these savings have largely been limited to large companies. This research examines the development and benefit of EDI, considers the impact of the Internet on EDI, and examines the outlook for EDI in the future.
EDI is the exchange of information in a standardized format from one computer to another. The standardization is critical since the ability of...