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What is EDI ?
- EDI Standards for

- The computer to computer exchange of standard

format business documents between Trading
partners

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- Standard format - Business Documents
- Trading Partners

Standard format: All EDI transactions are defined by

Standards. An EDI Standard document is an established
layout or format, of a business document. Standards
determine the order and location of the units of data in an
EDI document, ensuring that information from a paper
document corresponds to information in an EDI Standard
document.

Business documents: Examples include purchase orders,

Invoices, Ship notices, Transcripts, and Medical records.

Trading partner: Any organization, Company or entity with

whom you exchange information , goods or services.

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EDI is the paper less exchange of business documents,
such as invoices and purchase orders.

EDI documents contain the same information as paper

documents, but they are formatted in an EDI Standard
format.

With EDI software you can transmit a document from an

application on your computer to an application on
another company’s computer.

You send and receive EDI documents over a

communications line. You can also use a tape, diskette
or e-mail to exchange EDI documents with your trading
partners.

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 EDI Document Standards Committees
In the late 1970s and early 1980s, the American National
Standards Institute’s Accredited Standards Committee
(ASC) established the ANSI ASC X12 Standard, a generic
national document Standard designed for use by all
industries.

In the late 1980s, the International Standards Organization

(ISO) and the United Nations Economic Commission for
Europe developed EDIFACT (EDI For Administration,
Commerce and Transport), a generic international
Standard.

X12 and EDIFACT are the two most commonly used

document Standards in the US and Europe today.
The ANSI and ISO committees release new versions of
X12 and EDIFACT Standards about once a year, thus there
are multiple versions of most Standards in use.
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 Outbound
Outbound Transaction: When you send documents, EDI
translation software translates the data from your file format
into the EDI Standard format.

Your File Format EDI Standard

EDI Software
(XML,Database,flat file) Format

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 Inbound
Inbound Transaction: When you receive documents, EDI
translation software translates the data from the Standard
EDI format into your file format.

EDI Standard Your File Format

EDI Software
Format (XML,Database,flat file)

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 EDI Exchange

Your Outbound Inbound Your

Application EDI EDI Partner’s
Data Application
Data
Communication
Media ( Ex: Van,
IA etc..)

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The Benefits of Using EDI

The benefits of transmitting documents electronically

include

n Speed. Documents are sent and received during the

time periods you and your trading partner specify. You
can set up communications sessions to run immediately
or at regular intervals. Once documents are received,

n Accuracy. Because the data does not need to be

entered manually, typing errors are eliminated.

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 The Benefits of Using EDI (cont’d)

n Increased business opportunities. Many companies

require their trading partners to do business using EDI.
Once you can market yourself as being EDI-capable, your
potential for doing business with more companies
increases.

n Reduced costs. The rapid turnaround of documents

can help reduce inventory overhead, increase available
cash flow, speed up the accounts payable and receivable
cycles, and save payroll costs.

n Increased productivity. Your employees are available

to learn and perform more challenging tasks instead of
working on data entry assignments.
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 EDI Control Structure
Interchange Control Header ISA
• Interchange. A group
Functional Group Header GS of functional groups
Transaction Set Header ST being exchanged
Transaction Set Detail Segments
between two partners.
Transaction Set Trailer SE
• Functional Group. A
ST
Transaction Set Header
group of similar
Transaction Set Detail Segments
Transaction sets (e.g.,
Transaction Set Trailer SE
Functional Group Trailer GE
five invoices).
Functional Group Header GS • Transaction Set. The
Transaction Set Header ST data exchanged between
Transaction Set Detail Segments two partners that
Transaction Set Trailer SE
represents a single
Functional Group Trailer GE

Interchange Control Trailer IEA

business document .
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 EDI Control Structure (cont’d)
Transmission

Interchange • Transmission. A group

Functional Group of interchanges,
Transaction Set typically batched from
Transaction Set or for communications.
Functional Group
Transaction Set

Interchange

Functional Group
Transaction Set

Transaction Set

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 Sample EDI Data
ISA*00* *00* *12*8473179000
*12*9395100193 *970430*2251*U*00306*000000001*0*T*>
GS*PO*006250740*3959910033*970430*2251*1*X*003060 Interchange
ST*850*0001
BEG*00*NE*3859199838**950727***IBM
REF*11*0039110**14>0090028
PO1*1*300*BX*145.39**CB*KOW-20392-10 Functional
PID*F****Uninterruptible Power System Group
PO1*2*25*EA*35.68**CB*1093-4927-001
PID*F****High Volume Printer Stand
PO1*3*4*PC*2002.91**CB*ABX-2001 Transaction
PID*F****Electronics Cabinet Package (56" High) Set
CTT*3
SE*11*0001
ST*850*0002
BEG*00*NE*3859199839**950727***IBM
DTM*002*950731
PO1*2*1*PC*1039.45**CB*ABX-2039
PID*F****Electronics Cabinet Package (78" High)
CTT*2
SE*7*0002
GE*2*1
IEA*1*000000001
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 Segment Structure
Segment
ID Data Element Composite

REF*11*0039110**14>0090028

Segment

EDI documents contain segments and elements.

n Segments are the rows of data in a document.

n Elements are the units of data in a segment.

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 Interchange Envelopes
Element Separator

ISA*00* *00* *12*8473179000 *12*9395100193

*970430*2251*U*00306*000000001*0*T*> cr/lf
.
.
. Interchange
IEA*1*000000001 Control Number
Segment
Terminator
Composite
Delimiter
Number of
Functional
Groups (GS-GE)
in Interchange

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 Functional Group Envelopes
Functional ID Code
(identifies types of
transaction sets to follow)

GS*PO*006250740*3959910033*970430*2251*1093*X*003060
.
.
. Group Control Number
GE*2*1093

Version Release Indicator Code

(indicates the version of the standard
for the transaction sets to follow)
Number of
Transaction Sets (ST-SE)
in Functional Group

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Transaction Set Envelopes
Transaction Set ID
(identifies transaction sets type)

ST*850*0001
. Transaction Set
. Control Number
.
SE*11*0001

Number of Segments in
the Transaction Set
(from ST to SE)

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 Transaction Set Structure
ST*850*0001
BEG*00*NE*3859199838**950727***IBM
Header
REF*11*0039110**14>0090028
PO1*1*300*BX*145.39**CB*KOW-20392-10
PID*F****Uninterruptible Power System
PO1*2*25*EA*35.68**CB*1093-4927-001
Detail
PID*F****High Volume Printer Stand
PO1*3*4*PC*2002.91**CB*ABX-2001
PID*F****Electronics Cabinet Package (56" High)
Summary CTT*3
SE*11*0001

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Any organization, company, or entity with whom you
exchange information, goods, or services is called
your

EDI enables trading partners to exchange documents and

information quickly and efficiently. To send and receive
documents electronically with a trading partner, you must

n Establish common parameters for the documents you

will exchange

n Plan the format of the documents

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n Create the structure for the documents

n Set up the EDI software so that it can translate

the documents you exchange

n Define the types of envelopes you will use to

transmit the documents

n Choose the network you and your trading partner

will use to transmit documents

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You and your trading partner must establish
common parameters for each type of document to
be transmitted. These parameters identify

n the sender and receiver of documents

n the document type (such as purchase order,

acknowledgment, or invoice)

n which Standard and version of the document

you will use ( Ex: ANSI X12 4010, 4030 )

n which data elements your companies need

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In a paper-based system, a company might receive
business documents in many different formats, depending
on the format used by the sender. Employees can read,
interpret, and extract pertinent information from each
document, regardless of its structure.

A computer, however, can only read and process data that

is structured in the exact format the computer expects.

To ensure successful EDI transmissions, you and your

trading partner must agree on the format of the documents
you exchange, so that your systems will be ready to
receive and process documents in the expected formats.

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In paper-based transactions, a business document
usually consists of three parts:

Header :The preliminary information about the

entire document, such as the company name and
address of the sender and receiver, and the date
of the document.

Detail :The information contained in the actual

business transaction. The details in a purchase
order, for example, could include descriptions of
the product, quantities ordered, and prices.

Summary: The summary data about the entire

document, such as total charges or payments.

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EDI documents are formatted according to the document
Standard. The Standard specifications for segments and loops
can include

n the sequence in which segments must be transmitted

n whether each segment is mandatory, conditional or
optional
n the maximum number of times segments and loops can
repeat
n which segments are grouped together in loops
n the purpose of the segment
n the data elements that appear in the segment
n data segment terminators

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The Standard specifications for elements can include

n reference numbers
n element definitions
n the type of element, such as numeric, alphanumeric, or date
n minimum and maximum lengths
n valid element codes
n data element separator

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In paper-based communications, individual documents or groups
of documents are usually mailed in envelopes labeled with sender
and receiver addresses. When multiple documents are mailed in
one envelope, the receiver can distinguish individual documents
and document types.

Electronic documents, however, are transmitted as continuous

streams of data. For this reason, EDI Standards provide both
electronic outer “envelopes” containing sender and receiver
information, and electronic inner “envelopes” that separate groups
of documents and individual documents. Each envelope
encloses the data that falls between the envelope’s beginning
segment (header) and ending segment (trailer).
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To transmit EDI documents to your trading partner(s),
you can use a VAN or transmit a document directly to
your trading partner.

For VANs and direct connects, Harbinger provides over

35 predefined network modules, including the Harbinger
VAN and the IBM International Global Services Network.
You and your trading partner can select one of
Harbinger’s network modules, or you can select a
different VAN.

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