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What is EDI (Electronic Data Interchange)?

Electronic Data Interchange Overview

What is electronic data interchange? EDI is the electronic exchange of business documents between organizations. It provides a fast, reliable, secure and established data exchange method for businesses in every industry. EDI can be tailored to your specific business needs. For example, Purchase Order and Invoice documents are essential to the retail industry. The healthcare industry, on the other hand, relies almost entirely on the HIPAA Healthcare Claim and corresponding Payment EDI documents. Learn more about EDI services for any industry at 1 EDI Source.

As organizations move away from paper-based data exchange, approximately 85% of all business transactions currently take place using EDI. This creates major competitive advantages for businesses and their partners, ensuring operational excellence. EDI has proven to be the most efficient and secure global data exchange process available.

Is EDI Necessary for My Business?

The adoption of EDI is critical for companies of all sizes to maintain their competitive edge in the marketplace. Over three decades of global usage has proven that EDI improves operational efficiency across your entire organization. Because of EDI’s established value, it is often mandated by your trading partners.

4 Key EDI Components

At 1 EDI Source, we can configure your software to your unique business needs. However, there are four basic components that are essential to any EDI system:

Web-Based EDI tool:

Translates your accounting information into the proper format

EDI mapping:

Syncs your accounting system to your customer’s system

Transaction network:

Sends and receives transactions

EDI support:

Provides ongoing, around-the-clock technical support and maintenance

6 Key Benefits of EDI

Companies utilize EDI for several different reasons. Here are the top six advantages of using EDI in your business.


With EDI, manual processing is a thing of the past. When you automate essential tasks, mistakes happen less often, services are expedited and overall workflow efficiency is enhanced. Your employees will be free to focus their time on higher-value tasks.


EDI significantly decreases the risk of human error. In addition, your employees will no longer need to input data manually, leaving more time for the important things – like customer service. Furthermore, EDI gives you real-time visibility into all transaction statuses, helping you keep up with consumer demands.

Cost Reduction

EDI allows you to reorganize your workflow into a more cost-effective process. Because everything is executed electronically, expenses associated with paper, printing, storage, reproduction and postage are eliminated. Our documentation process also helps companies avoid fines due to delays, SLA violations and more.

Increased Processing Speed

EDI automation helps reduce processing time exponentially. This speeds up the entire business cycle from beginning to end. In fact, order-to-shipment cycles can be reduced by 50 percent or more.


Our EDI solutions are designed with safety and security in mind. Data can be shared securely across several communication platforms, ensuring compliance with national and global commerce standards.

Improved Client Relationships

EDI streamlines your workflow and eliminates the need for manual tasks. As a result, employees are able to focus more on customers, vastly improving your client relationships.

The Importance of EDI Integration

In today’s fast-paced business world, most companies already use EDI for essential B2B transactions. However, EDI integration is necessary to maximize your system’s potential. Extending EDI data automation and integration capabilities beyond the traditional allows you to meet ever-evolving business requirements. In simple terms, EDI integration can help your business thrive, no matter the industry.

Download Our EDI 101 Guide

Learn more about EDI best practices, crucial transaction set information and more!

  • What is EDI?
  • Six Solid Reasons to Use EDI
  • The Process of Exchanging EDI Data
  • Four Ways to Implement and Manage EDI
  • Five Steps to Empowering EDI
Download EDI 101 Guide

HQXchange is the Most Powerful EDI Platform Available

HQXchange™ [HQX] includes:

HQXchange (HQX) Cloud Based EDI Solution HeadQuarters
EDI HQ advanced mapping and translation software
IntelligentXChange IntelligentXchange®
IntelligentXchange [IX] visibility portal tool that works with any EDI translator
HQXchange (HQX) Cloud Based EDI Solution AS2 Complete
AS2 Complete data encryption software

HQXchange bundles our EDI HQ software, IntelligentXchange and AS2 Complete software solutions with our expert in-house technical EDI support, bringing you a new EDI platform with unrivaled depth and flexibility. HQXchange is available in two convenient subscription models: HQX Professional and HQX Enterprise.

Learn more about HQXchange

1 EDI Source is Here to Help with All of Your EDI Needs

Now that we’ve answered the question: “What is EDI?”, it’s time to take steps toward elevating your business. With over 30 years of experience as an EDI service and software provider, 1 EDI Source has the expertise and leading software solutions that give you full control and visibility of your business data. There are great differences between basic EDI tools and our comprehensive suite of EDI software products. The key advantages of choosing a solution from 1 EDI Source include ease of use coupled with full compliance. Choosing the best solution for your unique business is imperative for true integration, optimal efficiency and trading partner compliance. Allow our team to review your business requirements and recommend an EDI solution that will meet both your needs and your budget.

Ready to Streamline Your Processes?

At 1 EDI Source, we’re here to offer support and guidance through the research process. To learn more, contact us anytime.

Contact Us

Learn More About EDI Solutions

Still want more answers to the question, “What is EDI?” To learn more about electronic data interchange, please check out these useful resources:

Visit Our EDI Knowledge Center


Learn About EDI and ERP Integration


What is the Cost of EDI?


How Does EDI Work?