EDI, or electronic data interchange, is not a new concept by any means. In fact, EDI has been around for 50+ years, helping improve business to business (or B2B) communication across the globe. However, EDI might not be new to the world, but there have certainly been some advancements and changes to it throughout the decades.
In the early years of EDI, everything was conducted via a software installation where all information was kept on company servers. Nowadays, software installation isn’t even necessary since something called web based cloud EDI is entirely possible. Want to know more about web-based EDI, its benefits, and how it compares to traditional EDI solutions. Just keep reading to learn more.
First of all, what is EDI?
Before we can cover the basics of web-based EDI, it is important to have an understanding of EDI as a whole. In short, EDI is the exchange of electronic information, data, and documents from one business to another. It uses entirely electronic means, completely eliminating the need for paper.
In the past, EDI was only conducted though secure, point-to-point internet connections – today this is simply referred to as direct EDI. It works by establishing one single secure connection between the sender and the receiver. For this to work, both parties have to utilize the same EDI protocols and methods – it won’t work if one company is using a web-based solution and another wants to stick with the direct line.
Direct EDI is a great choice for huge corporations that work with the same business partners on a regular basis. Major retail companies like Walmart, Amazon, and Target use direct EDI systems. With a high volume of customers and tons of daily transactions, direct EDI is the easiest method since it can handle the volume.
So what is web-based cloud EDI?
In the direct EDI method mentioned above, the businesses involved will often have a software installed on all computers within the company – or at least the ones that will be utilizing the EDI program. With web-based EDI, there is absolutely no need for software installation since the exchange of documents is completed over a web browser.
All paper-based documents will be replicated into a web-friendly EDI replica. Once all the necessary information and data is added to the document, it will be sent through a secure IP address to your business partner on the receiving end. Web EDI isn’t the ideal option for huge operations, but for small and medium-sized businesses it is actually the better choice.
The Benefits of EDI on the Cloud
The main perk of choosing a web-based EDI service is cost. The cost of web-based EDI is much less on average than direct EDI programs and other more traditional EDI solutions used.
And the Disadvantages?
Web EDI is not a great choice for large businesses, partly because it cannot handle the large volume of data exchanges like a direct EDI software can. It also does not provide the same security since the interchange takes place via a web browser.