What Is Electronic-Data-Interchange

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Understanding Electronic Data Interchange (EDI)


What Is Electronic Data Interchange?

Summary:
Electronic Data Interchange (EDI) is a streamlined, computer-to-computer exchange of data across different systems. Similar to how the internet facilitates communication, EDI enables the transfer of data with minimal human intervention, enhancing efficiency in information exchange.

Article:

Electronic Data Interchange (EDI) is a system that allows computers to exchange various types of information directly with each other. Much like how the internet and the World Wide Web serve as communication tools, EDI facilitates data transfer with limited human involvement, ensuring seamless and automatic exchanges.

EDI is now regulated to offer standardized methods both internationally and domestically, optimizing the transfer of information and business transactions. It is a prevalent communication tool in processes like purchasing goods and services, moving messages such as financial data efficiently between locations and financial institutions.

Primarily, EDI is used by businesses to communicate essential data swiftly and securely. For instance, in the healthcare industry, it enhances the speed of sharing patient information across networks, improving service delivery. Although still evolving, EDI continues to streamline operations across various sectors.

As internet usage grows, EDI is becoming an increasingly favored method of communication. It enhances eCommerce by facilitating the buying, selling, and trading of goods, services, and information. The American National Standards Institute (ANSI) has endorsed a set of EDI standards, known as the X12 standards, promoting consistency in these exchanges. As more individuals and businesses go online, the use of EDI is expected to expand, supporting better connectivity and operational efficiencies across industries.

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