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Understanding the Basics of EDI

Understanding the Basics of EDI

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What is EDI ANSL X12?

EDI ANSI X12 stands for Electronic Data Interchange, American National Standards Institute X12.  The EDI ANSI X12 standard was developed to govern the use of EDI to exchange information electronically between businesses.  The EDI ANSI X12 standard is most prevalent in the United States and has counterparts used in other parts of the world, like the UN/EDIFACT standard that is the equivalent of EDI ANSI X12 outside the US.  Any EDI transaction sent in the United States must conform to the EDI ANSI X12 standard in order to be "EDI Compliant" and while there are a number of EDI ANSI X12 compliant software translators, not all EDI ANSI X12 software is created equal.

History of EDI ANSI X12

The EDI ANSI X12 standard first became ratified and available in 1981; but the origins of what became the EDI ANSI X12 standards go much further back.  The precursors of EDI ANSI X12 go as far back as the 1960's when railroad companies formed a committee that dealt with the quality of inter-company communication.  The next big leap for what would become EDI ANSI X12 came in the 1970s when the grocery industry began to use EDI and proliferated the early form of the technology.  By 1973 the committee that had been established in the 1960s decided to create a set of standards that all EDI users could use to make the exchange of information seamless.  These standards eventually became ratified as the EDI ANSI X12 standard in use today.

Using EDI ANSI X12

When you purchase EDI software or use a web-based EDI service, you are in fact using the EDI ANSI X12 standard.  Many software providers claim to be EDI ANS X12 compliant but fail to mention how easy or difficult their software is to use.  The EDI ANSI X12 standard in fact says nothing about how the various documents that are in the standard should be created, just what they should look like.  Because of this you should ensure that the EDI ANSI X12 software you use provides an easier means of setting your trading partners than simply having to hand-code the EDI ANSI X12 data.  Many of the premier vendors in fact offer some form of EDI ANSI X12 "kit" system that allows you to become compliant with a specific trading partner without having to learn the EDI ANSI X12 standard itself.  At the same time, if you are an advanced user, you should ensure that your software gives you the flexibility of working directly with the EDI ANSI X12 standard when you wish to do so.

Staying Current With EDI ANSI X12

One of the biggest misconceptions many customers have is that they must always have current updates to the EDI ANSI X12 standard in order to be compliant with their trading partners.  The EDI ANSI X12 standard documents are covered by "versions" that are usually in numeric form like 4030 or 5010.  Before asking your software vendor to sell you an update to the latest EDI ANSI X12 version, you should check with all you trading partner to ensure that they require this latest EDI ANSI X12 version.  You may be surprised to find out that even some of the larger retailers and trading partners are still using versions of EDI ANSI X12 that go as far back as version 4030! That said, we have hundreds of pre-specified trading partner mapping kits at the ready to help you get up and running quickly whether you choose from our local or cloud solutions.

The Future of EDI ANSI X12

The future of EDI ANSI X12 is quite safe and sound.  While some academic types have been singing the praises of using XML as a replacement for EDI, the retailers, which drive adoption of B2B electronic commerce, have steadfastly relied on EDI ANSI X12 as their preferred method of exchanging transaction data.  This insistence on the part of the retailers to use EDI ANSI X12 guarantees that the standard will be around for years to come.

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