What is EDI Integration, and How Can It Benefit Your Business?

Today’s consumers demand wow-worthy experiences from brands.

With omnichannel strategies becoming more innovative and unique every day, operating with peak efficiency is imperative for retailers looking to exceed expectations and foster brand loyalty. If your business relies heavily on manual workflows, there’s far less time and opportunity to focus on delivering exceptional customer experiences.

For ecommerce players, managing data exchanges between trading partners, online marketplaces, web stores, and other systems is overwhelming, time-consuming, and error-prone when done manually. Electronic Data Interchange (EDI) is a major component of ecommerce operations, and streamlining EDI transactions can play a major role in enhancing operational efficiency.

Read on to discover what EDI integration is and how it can benefit your business.

What Is EDI Technology?

EDI is a standardized format for businesses to exchange information, order, and purchase documents along the supply chain with partners. By using a consistent format between businesses, retailers can automate and accelerate document exchanges and data translations.

In other words, EDI is the common format for transacting documents from Business A (retailer) to Business B (brand). Common EDI documents include purchase orders (EDI 850), invoices (EDI 810), inventory levels (EDI 846), and advanced shipping notices (EDI 856). This data also needs to mirror itself in two places; in the retailer marketplace, such as Amazon, Bed, Bath, & Beyond, Home Depot, CommerceHub, etc., and also in an Enterprise Resource Platform (ERP), such as NetSuite, Sage, Quickbooks, Microsoft Dynamics, etc. That’s where EDI integration comes in.

What Is EDI Integration?

EDI integration is a process by which different computer systems and software applications exchange business documents and data electronically, following specific standards and protocols.

Relying on manual efforts to process EDI documents and input data across systems makes retailers more vulnerable to costly errors such as inaccurate addresses, inventory, shipping info, etc. With EDI integration, you can easily automate bi-directional data exchanges between EDI, ERP, and other back-end systems.

EDI integration solutions leverage automation to transfer data from an EDI document directly to various business systems, including ERP, WMS, CMS, shipping solutions, accounting software, and more.

Why Is EDI Integration Important?

EDI integration is essential in modern business environments because of its ability to rapidly accelerate and streamline communications between trading partners, ensure adherence to guidelines, and enhance overall efficiency.

By enabling EDI data integration, businesses can automate the exchange of information between systems, reducing the reliance on manual processes and ensuring accurate, timely data flow.

EDI integration minimizes manual processes, reduces errors, and accelerates transaction processing times. It establishes a seamless flow of information across disparate systems and platforms, facilitating real-time visibility into supply chain operations and enabling companies to respond to changing market and customer demands. EDI is a critical piece in driving the supply chain across a multitude of verticals, including commerce and retail, manufacturing, healthcare, insurance, logistics, automotive, financial services, and government. By leveraging robust EDI integration solutions, businesses can scale their operations, improve trading partner collaboration, and achieve long-term growth.

How Does EDI Integration Work?

Step 1. Data Mapping

Data mapping involves identifying which data elements in one system correspond to those in another system. For example, mapping the “customer name” field in one system to the corresponding field in another system.

Step 2: Data Translation

Once data mapping is established, the data must be translated into a standard EDI format. Some common EDI standards include all EDI (X12, EDIFACT, TRADACOMS, XML, CICA, HL7, etc.), XML – (WSDL, XSD), cXML, Flat Text Structures, Hierarchical Text Structures, and more. Each standard defines the structure and format of different business documents such as purchase orders, invoices, and shipping notices.

Step 3: Data Validation

Upon receiving the EDI documents, the receiving system validates the data for compliance with the EDI standard and performs any necessary checks for data integrity and accuracy. Validation helps ensure that the received data is consistent and error-free.

Step 4: Workflow Integration

This is one of the key elements of EDI integration. Once validated, the EDI data is integrated into the recipient’s business processes and systems. These systems may include ERP systems, CRM, WMS, shipping solutions, and more.

Step 5: Acknowledgement

After EDI documents are processed, the receiving system sends acknowledgments to the sender to confirm the successful receipt and processing of those documents. This helps maintain data integrity and ensures both parties that the transaction was completed successfully.

Integrating EDI and ERP systems

If a customer places an order through a retailer like Amazon, processing that order manually involves hiring someone to hand-key the order and customer information into the ERP, CRM, or account system to trigger another chain of events, such as shipping and packing.

Not only is this taxing on staff, but it also creates bottlenecks and takes them away from helping customers with more pressing matters. One simple misstep — such as an inaccurate address or incorrect order fulfillment — can lead to both unhappy trading partners and customers, ultimately hurting the bottom line.

By leveraging EDI and ERP integration, these processes can be automated, making end-to-end fulfillment more efficient for your team members, retail partners, and customers.

Benefits of EDI Integration

Despite its age, EDI continues to be an invaluable tool across retail, ecommerce, and manufacturing. By integrating EDI with other core systems, businesses can go beyond simple data exchange and unlock a range of benefits, including:

• Improved data accuracy: Automating the transfer of EDI data from documents to ERP systems, CRM, and other applications reduces manual data, minimizing errors and enhancing overall data quality.
• Smoother trading partner communications: By enabling end-to-end automation, EDI integration accelerates processing times and ensures transactions consistently align with industry requirements and individual trading partner standards.
• Lower EDI management costs: Streamlining EDI processes and reducing manual oversight can significantly decrease resource requirements, allowing teams to consolidate responsibilities and reallocate time toward more strategic, high-impact initiatives.

Learn more about Jitterbit’s EDI Solution

4 Signs Your Business Needs Integrated EDI

While some smaller suppliers with low transaction volumes may be able to get away with keeping EDI siloed, the need for integration becomes more obvious as volume increases. It might be time to consider an integrated EDI solution if you:

1. Have to say “no” to new business because you’re unable to handle various partner EDI formats or requirements
2. Have to manually code every new integration
3. Spend too much time setting up new trading partners because you have to input data into multiple systems to define the envelope, map name, and operation
4. Constantly have to re-key data between systems due to errors

Why Choose Jitterbit’s iPaaS for EDI Integration?

Jitterbit’s iPaaS integration Platform as a Service, Harmony, provides robust EDI data integration capabilities and offers numerous benefits for businesses who want to achieve optimal efficiency when it comes to transacting with trading partners.

• Gain a Centralized View of Transactions

  Jitterbit’s iPaaS solution provides a single source of truth for managing trading partners and EDI transactions. This centralization provides a holistic view so businesses can track the status of transactions in real-time, monitor performance metrics, and proactively identify issues before they impact operations.

• Scale Easily with iPaaS Solutions

  Harmony is designed to scale with a business as it grows. As EDI transaction volumes grow and new trading partners and systems are added, iPaaS solutions can handle increased data traffic without requiring significant infrastructure investments or manual intervention.

• Accelerate Integrations with Pre-built Connectors

  Jitterbit has pre-built connectors for industry-leading ERP systems and CRMs, as well as access to thousands of trading partners, which allows for the rapid integration of new applications or custom enterprise systems.

• Automate Complex Workflows Effortlessly

  Our workflow automation capabilities help businesses streamline the exchange of electronic documents, automate repetitive tasks, and ensure seamless data flow between trading partners, enhancing efficiency and reducing errors in business processes.

• Enhance Agility with Future-Proof Solutions

  By eliminating the requirement for custom coding, Jitterbit’s EDI integration maintains an unprecedented level of forward compatibility. The impact of future systems upgrades and software migrations is minimized, allowing for near-zero downtime during changes to your IT infrastructure.

• Get Expert Support When You Need It

  Jitterbit’s direct EDI integration is backed by the highest level of support found in the B2B industry. Our seasoned EDI professionals have decades of experience, and we provide unparalleled support with rapid response times. This support, coupled with Jitterbit’s commitment to quality, brings proven performance and peace of mind to B2B integration.

Frequently Asked Questions

What Industries Benefit the Most from EDI Integration?

EDI integration is widely used across industries like retail, manufacturing, logistics, healthcare, and finance. For example, retailers use EDI integration solutions to manage supply chain operations efficiently, while manufacturers rely on it to automate inventory management and order processing. By adopting integrated EDI systems, businesses in these sectors can streamline communication with trading partners, reduce errors, and meet industry compliance standards.

Can EDI Integration Work with Legacy Business Systems?

Yes, EDI integration can be configured to work with legacy ERP, CRM, or accounting systems. Many EDI integration solutions offer tools to bridge the gap between outdated systems and modern technology by enabling seamless EDI data integration. This allows businesses to modernize workflows without the need for a complete system overhaul, ensuring compatibility and operational efficiency.

What Types of EDI Transactions Can Be Integrated?

EDI integration supports a variety of transaction types, enabling seamless communication between trading partners. Some common types include:

• EDI 850 (Purchase Order): Used to place an order with a supplier or vendor.
• EDI 810 (Invoice): Facilitates invoicing and billing between businesses.
• EDI 856 (Advance Shipping Notice): Provides details about a shipment before it arrives.
• EDI 846 (Inventory Inquiry/Advice): Shares inventory status and availability.
• EDI 940 (Warehouse Shipping Order): Directs a warehouse to ship goods to a specified location.

These transactions help automate critical business processes and improve communication across supply chains. Robust EDI integration solutions ensure these transactions are efficiently processed and error-free. For a comprehensive list of EDI document types, visit our EDI Document Types page.

 Take a deeper dive into Jitterbit’s EDI integration solution

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