In this time of modernization, businesses rely on digital infrastructure more than ever for their core operations and its solutions like electronic data interchange (EDI) that allow organizations to transform their processes efficiently and effectively digitally.

EDI refers to the computer-to-computer transfer of business documents in an electronic format between two or more companies. Simply put, it’s how companies interact and work better together.

Businesses can exchange many types of documents using electronic data interchange. The most common are invoices, sales orders, purchase orders, and advance ship notices. EDI eliminates the need for paper forms and receipts and speeds up the process of exchanging documents — all while minimizing human involvement through digital automation. That, of course, reduces the chances of costly errors.

In addition to improving speed and efficiency, EDI is also a high-value service for businesses that don’t want to incur expenses associated with printing and mailing physical documents. There are also advantages in terms of speed, security, and traceability, which are essential when exchanging vital business documents between companies.

As more business interactions take place in the cloud, document exchange has migrated. The EDI market is rapidly growing. In 2019, the market had a $24.64 billion value, expected to nearly double to $49.213 billion by 2027.

Essential Business Benefits Of EDI


Accelerate Business Cycles and Outcomes

Business today happens in real time. Agility is an asset for companies. The relatively instantaneous nature of electronic data interchange provides a much-needed edge for document transfer. A study by Dixons Carphone indicated EDI can speed up business cycles by as much as 61 percent, representing a significant increase in business efficiency.

Automation is a critical factor in this increase in speed. Automating processes dramatically reduces (or eliminates) time delays experienced while manually entering, filing, and analyzing data bits. Simple autofill or data import features can shave countless hours off document preparation.

Less time spent on tedious manual tasks means businesses can focus attention on other important aspects of the operation that potentially can have a more significant impact. For example, instead of getting bogged down in data collection and analysis, administrators can invest more resources and effort into marketing, development, or a myriad of other projects that can drive the business forward.

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Lower Operating Costs Through Added Efficiencies

There are many benefits of EDI that directly relate to cost savings. Most revolve around the efficiencies and synergies it enables within core facets of business operations.

With all the talk about digital transformation today, it’s easy to forget how much of the business world still runs on paper. EDI changes that. Businesses can eliminate (or significantly reduce) the costs of paper, printing, storage, reproduction, postage, filing, and document retrieval. Those elements can make up sizable costs, and eliminating them could significantly trim overhead.


Those cost savings go beyond supplies, too. Consider the prevalence and severity of manual data entry errors. Even small mistakes can quickly become costly – with compounding implications. EDI reduces the impact of errors, including protecting businesses from costly audits, fines, misreporting errors, and numerous other headaches caused by incorrect data.

Reduce Human Error And Improve Accuracy

Electronic data interchange isn’t just more efficient than manual work and more accurate. When businesses cut down on the human involvement necessary in data exchange between companies, they also cut down on the likelihood of human error. Again, auto-import or AI tabulation tools go a long way in distinguishing EDI over other forms of document preparation and exchange.

Businesses can expect a noticeable boost in the quality and accuracy of data when using EDI for dispersal and intake of forms and documents. It’s an intelligent way to reduce duplicated work and improve accuracy while increasing speed.

Provide Ample Data For Tracking And Optimization

One of the most significant benefits of EDI is that it improves data quantity and quality. That makes it a no-brainer for businesses dealing with large volumes of data and communication with partners.

Through EDI, users can share data across a wide range of communications protocols with stringent security standards. It’s not just about setting up a data funnel but protecting it. EDI offers the best of both worlds.


The digital nature of EDI also means data included in these documents is instantly searchable. That’s especially important in the age of semantic recognition and AI databases. No matter how much data is involved, EDI makes optimization and tracking significantly more accessible and less time-consuming. For example, a company may warehouse certain EDI data, then use an integration platform as a service (iPaaS) with built-in B2B/EDI management capabilities to make it more accessible, searchable, and readable.

Connectors And Integrations

EDI is based on the links between your systems and your partners’ systems. Small business EDI platforms need to offer a wide array of connectors to suit your current needs and accommodate any other systems you might want to add in the future. Think about the solutions you currently use and those you might use in the future. Some examples of connectors to look for include:

  • Retail partners like Amazon, Walmart, and Target
  • Third-party logistics (3PL) systems
  • Enterprise resource planning (ERP) systems
  • Online platforms
  • Accounting software
  • Data warehousing systems
  • Returns management systems
  • Order-to-cash solutions

Potential For Reducing Errors


Will your EDI solution help you minimize errors? Consider the processes you’d like to automate or which ones give you the most trouble, and look for an EDI solution that can accommodate them. One of the significant benefits of EDI is its ability to remove the risks of manual processing, so you’ll want to ensure your EDI solution can do so. It should also offer enough flexibility to accommodate new processes you may add in the future.

Bottom Line

As you can see, EDI fits well in many different commerce businesses. From technology to health and a wide range of other goods, EDI provides end-to-end automation and simplification, so you can spend less time managing information and more time focusing on growing your business.