What is EDI in Telecom?

EDI in Telecom

The term EDI (Electronic Data Interchange) refers to the transmission of information between companies electronically, using agreed upon message standards. These standards set out the formatting, structure and meaning of the data being transmitted. It differs from fax and electronic mail, which are designed for person-to-person communication.

EDI allows multiple companies—possibly in different countries—to communicate directly with each other, without human intervention. The system is regulated by standards bodies to ensure that all participants follow the same rules and regulations. This ensures that the documents sent and received will always be understood, no matter which company is involved.

Businesses use EDI to exchange information in order to automate the business processes that would otherwise be handled manually. This improves efficiency, reduces the costs of processing, storage and printing and is better for the environment. In addition, EDI reduces the chance of error and speeds up the transmission process.

In the past, most edi van provider communications were direct between two firms—called trading partners—using a value-added network (VAN). VANs are like electronic mailboxes that communicate with each other via the Internet. A VAN can translate the EDI files into a format that can be read by the receiving firm’s computer systems. VANs can also handle the complex transmission protocols required by EDI.

Historically, EDI has been used by large organizations with extensive supply chains that require the exchange of very detailed and highly structured information. This included companies that traded internationally as well as those with sophisticated in-house IT capabilities. However, the advent of inexpensive microcomputers has allowed small and medium-sized businesses to get involved as well.

What is EDI in Telecom?

To send an EDI document, the transmitting company creates a text file containing a string of characters separated by delimiters. Each individual element is known as a data segment. A string of data segments framed by a header and trailer is called a transaction set.

After a document has been transmitted, the recipient company reviews it to ensure it is correct. If any errors are found, the sender can send a correction request. The process is then repeated until the error is resolved.

Depending on the industry, there are a variety of standardized EDI formats. Some industries use their own unique format, while others have adopted a standard from the United Nations or the International Organization for Standardization.

Once a trading partner is set up to receive EDI documents, the sending company can start using it. They will need to determine which EDI protocol their trading partner is using and then set up their EDI software to accommodate that. A reputable VAN provider can help to facilitate this process and will provide training on how to use the service. They can also assist with any EDI compliance issues that may arise. A VAN provider will usually charge a monthly fee for their services. This is typically a small percentage of the total cost of running an EDI system. This is much cheaper than the cost of setting up and maintaining an in-house EDI system.