What Does EDI Stand For?

What does EDI stand for in business?

The letters line up with three plain ideas:

• Electronic: the document moves between computers, not on paper or by fax.
• Data: the content is broken into labeled fields, such as item number, quantity and ship date.
• Interchange: two trading partners swap these files both ways.

The key word is standard. Both sides agree in advance on exactly how a purchase order or invoice is laid out, field by field. Because the layout is fixed, software can read an incoming order and create a picking list or a bill on its own. That saves time, cuts typing errors and speeds up payment.

How an EDI exchange works

1. A buyer's system creates an order. Its business software, often an ERP, produces the data.
2. Translation. EDI software converts that data into the agreed standard format.
3. Sending. The file travels over a secure connection, either directly between partners or through a value-added network (VAN), a service that routes and stores EDI traffic.
4. Receiving. The supplier's system translates the file back into its own format.
5. Acknowledgment. The supplier sends back a receipt that confirms the file arrived and could be read.

EDI document numbers you will hear

In the American X12 standard, each kind of document has a three-digit number. People in supply chain jobs say the numbers out loud the way others say "invoice."

Health care has its own sets under the same system. For example, the 837 is used for medical claims and the 835 for payment details. Outside North America, many companies use EDIFACT, a standard developed under the United Nations, which uses names like ORDERS and INVOIC instead of numbers.

EDI vs API and other ways to share data

EDI is older than the modern web, and it is still everywhere because so many partners already use it. An API is a newer way for systems to talk, usually in real time over the internet, with each request answered right away. EDI tends to move documents in batches. Many companies run both: EDI with large retail partners and APIs for apps and online stores. Simple files like CSV spreadsheets are a third option, but they lack the strict rules that make EDI dependable between strangers. ANSI, the American National Standards Institute, accredited the committee that created X12. For more terms like these, see tech acronyms.

EDI meaning in the workplace and schools

In human resources, universities and many workplaces outside the United States, EDI stands for equity, diversity and inclusion. It covers the same ground as the more common American order, DEI. Organizations use the term for policies, training and offices that deal with fair treatment and representation. People hold a range of views on these programs, and the letters themselves simply name the area of work.

In early childhood research, EDI can also mean the Early Development Instrument, a checklist teachers fill out to measure how ready young children are for school. In a supply chain or billing setting, though, EDI nearly always means electronic data interchange.

How to say and write EDI

Say each letter: "E D I." The letters stay capitalized and carry no periods. The opening letter E is voiced like "ee," so "an" comes before it: "an EDI partner," "an EDI file." People also use it as a describing word, as in "EDI compliance" (meeting a partner's formatting rules) and "EDI chargeback" (a fee a retailer charges when a supplier's files are late or wrong).