What are the major EDI standards I should know about?

The standard you need depends on your location and industry: EDIFACT: The international standard, dominant in Europe and outside North America. ANSI ASC X12: The primary standard used across North America. GS1 EDI: A global system focused on barcodes and supply chain identification. PEPPOL: A network used by public and private entities for the purchase-to-pay process.

What is EDI compliance and how does it work?

Q: Why is EDI compliance important for suppliers?

EDI compliance is critical because it is often a mandatory requirement for trading with major retailers and global organisations . Without being EDI compliant, your computer systems cannot communicate with your partner's procurement software, meaning transactions cannot take place. Achieving compliance allows you to replace slow, error-prone manual processes (like email and fax) with automated, high-speed data exchanges, significantly reducing costs and improving transaction accuracy across the supply chain.

Key insights:

Definition: EDI compliance is the ability to exchange business documents (like POs and invoices) in the specific digital format required by your trading partners.
Business necessity: Compliance is often mandatory to do business with large retailers or global partners in industries like manufacturing, healthcare, and construction.
Global standards: Major standards include EDIFACT (international), ANSI X12 (North America), GS1 (global supply chain), and PEPPOL (e-invoicing network).
Implementation process: Achieving compliance involves understanding partner requirements, choosing between in-house or outsourced builds, and rigorous testing before going live.

To understand EDI compliance, first it pays to first understand exactly what Electronic Data Interchange (EDI) is. Bear with me...

In short, EDI exchanges business documents from one system to another rather than using paper-based processes that involve people.

These paper-based exchanges, like postal mail, faxes, and, yes, even email are fast falling out of favour because they’re slow and prone to costly errors.

With EDI, buyer’s and supplier's computers are all that’s involved. For example, the buyer's procurement system sends a purchase order to the supplier's Order Management System, and that application sends an invoice back to the buyer. There are no manual entries involved.

So to be EDI compliant is simply the ability to exchange business documents, such as purchase orders and invoices, in a format your trading partners require.

Why do businesses need to be EDI compliant?

Put simply, if your trading partner, wherever they may be around the world, requires a particular EDI format, then yes, you must comply to do business with them.

Most industries, like manufacturing, retail, healthcare, pharmaceuticals, utility, and construction companies, benefit from EDI processes because they deal with huge amounts of identical paperwork and form data.

To take advantage of faster transactions and low costs generated by EDI, your information must be EDI compliant with the same standards as your trading partner's computer. Otherwise, one computer won't understand the other, and no transactions can take place.

The major EDI standards

If you do business globally, it’s important to educate yourself on the different EDI standards and requirements because they differ depending on the trading partner's location around the globe. These are the most common EDI message standards...

EDIFACT

The United Nations/Electronic Data Interchange for Administration, Commerce, and Transport (EDIFACT) is the only international standard. It’s widely used across Europe, and is predominant outside of North America.

ANSI ASC X12

The American National Standards Institute (ANSI) supports industries across North America. However, there are 300,000+ companies worldwide that use the standard.

GS1 EDI

Global Standards 1 (GS1) is the only global system for barcoding and standardising identification of supply chain products, assets, services, places, and organisations.

PEPPOL

Pan-European Public Procurement On-Line (PEPPOL) is a network that connects many existing applications used by private and public entities that use the purchase-to-pay process.

System integration process steps

Understand the requirements of your trading partner. Most trading partners will provide a full set of EDI requirements and expectations.
Decide if you're outsourcing or building in-house.
Set up the EDI integration
Test your integration to make sure both you and your trading partner's end are functioning correctly.

Crossfire’s fully managed EDI will take care of the setup, configuration, monitoring and support of your EDI connection, no matter what standard you’re working with.

Whether you just want to learn more or you’re ready to get started with implementing EDI, we’re happy to help.

Frequently asked questions

EDI compliance is critical because it is often a mandatory requirement for trading with major retailers and global organisations. Without being EDI compliant, your computer systems cannot communicate with your partner's procurement software, meaning transactions cannot take place. Achieving compliance allows you to replace slow, error-prone manual processes (like email and fax) with automated, high-speed data exchanges, significantly reducing costs and improving transaction accuracy across the supply chain.

The standard you need depends on your location and industry:

EDIFACT: The international standard, dominant in Europe and outside North America.
ANSI ASC X12: The primary standard used across North America.
GS1 EDI: A global system focused on barcodes and supply chain identification.
PEPPOL: A network used by public and private entities for the purchase-to-pay process.

Being EDI compliant means your business has the technical ability to exchange documents (like purchase orders and invoices) in the specific digital format required by your trading partner. It ensures that your system and your partner's system "speak the same language," allowing for automated, paperless transactions without manual data entry.