What is EDI ?

EDI pros

What is EDI?

EDI, or Electronic Data Interchange, allows data transfer between different information systems, the greatest benefit of which is the reduction of manual work and paperwork, as well as the avoidance of errors. Many companies have already automated their order, delivery, and billing chains with the help of an EDI service.

To utilize EDI services, a system is needed either with direct connections to retail chains (like Zimplify) or a separate EDI operator that mediates messages between its own system and the retail chains.

OVT, which is a commonly used Finnish translation of EDI, stands for Inter-Organizational Data Transfer. While information moves quickly on the internet, there is sometimes a “language barrier” between different systems used by organizations, which the EDI/OVT entity strives to break down. The matter isn’t quite as straightforward, but in simplification, EDI/OVT is based on converting the desired transferable data in the outgoing system into a pre-agreed format. This way, the receiving system can read the necessary information in a form understandable by humans. The data can then be processed either automatically or manually, if necessary.

EDI integraatio

Straightening out data transfer

Electronic EDI/OVT data transfer is based on international standards, and in Europe, the UN-maintained EDIFACT standard is used. Electronic data transfer aims to facilitate companies’ operational activities by enabling, for example, the automation of orders, deliveries, invoicing, inventory management, bill payments, and numerous other functions.

However, the diverse forms of data in different systems often prove to be a challenge, and this might discourage many from their intentions to digitalize their business transactions. It’s often thought that changing data formats would require expensive equipment and consulting purchases. But as already mentioned, you can order the EDI service as a whole directly from a specialized operator or software house, in which case the partner’s data transfer methods and compatibility are the responsibility of the operator or software house.

Who is EDI/OVT suitable for?

EDI/OVT services are commonly used in the retail, wholesale, and logistics sectors. Especially in the food industry, an EDI connection is often a requirement from central companies to suppliers. Regardless of the industry and the size of the company, they are suitable for most companies that want to automate their routine data transfer operations and/or streamline/ease their daily activities and focus on their core competence.

For example, in a situation where a retailer’s ordering system is integrated directly into the supplier’s system and a set minimum shelf limit is approaching: the retailer’s system automatically sends a new order for the necessary products, the supplier sends an electronic delivery information message, organizes the delivery, and the invoice follows electronically. The risk of manual typing errors is minimized, and the warehouse always has the right amount of products. EDI/OVT