Four decades old, electronic data interchange standards endure


Since their creation during the 1970s, electronic data interchange standards have become the go-to business integration solutions for companies looking to transmit information quickly and easily between business partners, regulators and customers.

Though newer, and by some accounts more effective, solutions have hit the market in the past 40 years, EDI endures, according to a recent Financial Times report. The technology has certainly evolved since first being introduced, but the central elements of EDI have remained unchanged, according to the report.

EDI Electronic Data Interchange

"EDI has survived because organizations believe it offers competitive advantage in being able to make business decisions faster," Steve Keifer, an industry and product marketing vice president at an EDI solutions provider, told the Financial Times.

The initial draw of the business integration tool was the fact that, to an extent, EDI eliminated the human element of transmitting confidential data. That helped reduce the number of errors committed by users, and thus decreased the amount of data loss and breaches organizations experienced.

"It was the closest yet to a paperless trading environment, without the need to print, post and receive paper orders, invoices, remittance notes, inventory lists, catalogs and forecasts," Jane Bird wrote for the newspaper. "Moreover, financial transactions could be accomplished in a minutes rather than days."

As usage of the technology grew, so too did the number of standards and variations on the traditional EDI. Eventually, standards were created depending on industry, sector and sub-sector, the report stated.

Today, the newspaper reported, there are about 50 EDI standards. It’s such evolution that has allowed the technology to remain at the forefront of data transaction solutions - that and the fact that it has grown to leverage other, new technologies, such as the expansion of the internet and XML coding.

Even today, almost half a century since its creation, certain organizations rely on the technology every day.

"It has become critical to manufacturing companies to enable flexible and responsive supply chains," Keifer said.

The notion that EDI will be around for some time was echoed in a Gartner blog post earlier this year. According to research vice president Benoit Lheureux, many companies had been asking the research firm to provide guidance of the use and benefits of EDI. For that reason, Lheureux said, "EDI remains - and will remain for years to come - a high impact, valuable asset to business."