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January 11, 2023

Why X12 Is the World’s Most Widely Used Set of EDI Standards

EDI standards are like the rules of the road for exchanging business documents. They ensure everything is formatted and organized the right way so that computers can understand and process them effectively.

EDI standards save time and money and eliminate the errors associated with creating, sending, and receiving documents manually. They help guide critical information to its destination and ensure everything runs smoothly.

ANSI X12 is the world’s most widely used set of EDI standards. It can be used for nearly any business-to-business transaction and is constantly being added to and improved. As you’ll see, it’s highly flexible and future-proof.

This article explains how and why businesses worldwide rely on ANSI X12 to streamline their operations. And why you should do the same.

Let’s begin.

What are EDI Standards?

Before diving into X12, let’s quickly touch on EDI standards and provide a working definition.

EDI standards are sets of guidelines that govern the format and content of EDI business documents. These standards ensure that EDI messages are structured in a uniform and standardized way, making it easier for computers to process and understand the data they contain.

EDI standards define the order and location of data units within an EDI document and outline the specific details of each EDI transaction. By adhering to these standards, businesses can streamline their operations and more efficiently exchange documents with trading partners.

Here’s why EDI standards are so important:

  1. They allow businesses to exchange electronic documents in a standardized way, which makes them easier to process and understand.
  2. They reduce the risk of errors and miscommunications by providing a clear set of rules for formatting and exchange.
  3. They enable businesses to automate their processes and reduce the need for manual data entry, which saves time and reduces errors.
  4. They make it easier for companies to integrate their systems with their partners’, improving the efficiency and speed of business.

What Are ANSI X12 Standards?

ANSI X12, American National Standards Institute X12, is a set of EDI standards and XML schemas developed in the late 1970s. Initially devised for use in North America, X12 is now the most widely adopted set of EDI standards worldwide and is used by more than 300,000 organizations.

Somewhat confusingly, X12 is also the name of the Accredited Standards Committee (ASC) that develops and maintains X12 standards. X12’s membership includes over 3,000 technologists and business operations professionals from domains as diverse as healthcare, transportation, government, and supply chain. These members meet regularly to maintain the X12 standards and facilitate consistent electronic interchange.

X12 members ensure the X12 standards continue to evolve and improve. With more than 320 standards available, X12 can be used in nearly every B2B transaction. Each specific business purpose has its own transaction set, which spans the gamut from Health Care Claim Status Request Specifications to Human Resource Information. You can find a complete list of X12 EDI transaction sets here.

Why EDI X12 Transaction Sets are So Prevalent

There are several reasons why EDI X12 has become the most widely used set of EDI standards worldwide:

  1. It was developed by ASC X12, a widely respected organization in the field of EDI. And it’s backed by ANSI, which gives it high credibility.
  2. It’s interoperable with other EDI standards and syntax-neutral, which makes it widely compatible.
  3. It has a strong stakeholder community that ensures standards continuously adapt to the rapidly evolving B2B landscape.

The “Network Effect”–the idea that the value of a service increases as more people use it–is one of the main reasons ANSI X12 has risen to the top. The more people adopt ANSI X12 standards, the easier it becomes for businesses to exchange documents with their partners and find service providers and resources to support them. The Network Effect creates a flywheel that’s hard to stop.

With ANSI X12 baked into the fabric of so many industries, it’s unlikely to be toppled any time soon. The future’s bright for X12.

How 1 EDI Source Can Help

If you’re ready to supercharge your business operations and streamline your supply chain with ANSI X12, look no further than 1 EDI Source! Our range of EDI software and services can help you connect with your trading partners and keep your business running smoothly.

Whether a small supplier or a multi-national enterprise, our EDI experts have the knowledge and experience to help you integrate EDI into your existing software and harness the power of ANSI X12. Whether in the cloud or on-premises, managed or hosted, 1 EDI Source has you covered. So get in touch. We’d love to hear from you.