What is EDI (Electronic Data Interchange)?
A standard for exchanging business documents (purchase orders, invoices, ASNs) electronically between trading partners.
Definition
Electronic Data Interchange (EDI) is the electronic exchange of standardized business documents between organizations using structured data formats (ANSI X12, EDIFACT, XML). Common EDI transactions include purchase orders (850), invoices (810), advance ship notices (856), and payment remittances (820). EDI is essential in automotive, retail, distribution, and manufacturing where large customers (OEMs, retailers) require EDI compliance from their suppliers.
How EDI Works in ERP
ERP systems either include built-in EDI capabilities or integrate with third-party EDI providers (SPS Commerce, TrueCommerce, etc.). EDI integration automates the exchange of business documents — incoming purchase orders automatically create sales orders in ERP, and outgoing invoices are generated and transmitted without manual data entry.
ERP Vendors with Strong EDI
Epicor Kinetic
ERP built for manufacturers — from job shop to enterprise
Microsoft Dynamics 365
Modular ERP + CRM tightly integrated with Microsoft 365
QAD Adaptive ERP
Cloud ERP purpose-built for global manufacturers
SAP S/4HANA Public Cloud
Standardised cloud ERP with quarterly auto-upgrades and low TCO
Frequently Asked Questions
Do I need EDI with my ERP?
If your customers or suppliers require EDI (common in automotive, retail, and large-scale distribution), then yes. Most mid-market and enterprise ERPs either include EDI capabilities or easily integrate with EDI providers.