EDI (Electronic Data Interchange)
Definition
EDI, or Electronic Data Interchange, is the automated exchange of business documents — orders, invoices, delivery confirmations — between different companies' systems, without manual re-entry or email traffic.
Documents that travel straight from system to system
With EDI, the buyer's ERP system sends an order directly to the supplier's system, in a fixed format both parties understand. No PDF, email or manual entry involved.
Why companies switch to it
Fewer typing errors, faster processing and less time spent retyping orders between systems. Large buyers often require EDI from their suppliers as a condition of doing business.
EDI versus PunchOut
EDI sends documents between two systems. PunchOut lets a buyer shop directly in the supplier's catalog from within their own procurement system. Both solve a different part of the same problem.
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