Electronic Data Interchange (EDI) – Explaining EDIFACT

Many businesses in Australia find themselves needing to implement electronic data interchange (EDI) often because one or more of their major customers demand that they transmit their orders, dispatch advices, and invoices, electronically. Communicating these documents electronically and automatically has the benefit of saving time that would otherwise be spent on manual data entry and processing.

This post explains the various EDIFACT formats that are used for EDI.

Because documents are sent between companies, and potentially even between countries, a standard format is required to ensure there is no ambiguity in the messages that are sent and received. One of these formats is X12 which was chartered by the American National Standards Institute in 1979. Seven years later, the United Nations chartered the internationally accepted Electronic Data Interchange for Administration, Commerce and Transport (EDIFACT) format.

Over thirty years after EDIFACT was chartered it is still used by businesses around Australia. During its history it has continually evolved, with twice yearly updates until the end of 2016. However, it is not mandatory to use the updated definitions and older definitions can continue to be used.

The EDI partners that Fenwick Software works with use either the 1996 or 2001 definition. It is likely that this was simply determined by when they started to use EDI communication. Some also use the older X12 format, with its own series of versions, most recently updated this month.

The final stage of complexity when implementing EDI communication is partner specific requirements. The EDIFACT format defines which fields are available but not which are mandatory. This is up to the individual partners who can define their own requirements. The more similar a partner (e.g. same industry, same size, same country) the more similar the requirements will be. This means that when communicating with international partners things can become more complicated.

As a result, most companies that use EDI communication require the services of a specialist who is responsible for the communication and translation between formats, versions and specific requirements. Fenwick Software offers its own end to end solution for our clients, which Brad Foot describes in his blog post EDI Fusion Powers B2B.

In summary, EDIFACT is an international standard for electronic communication between companies, domestically and internationally. It has had numerous versions since its inception in 1983 and continues to be used by companies around Australia. It is a valuable tool that requires expertise to implement but can provide significant savings through the reduction of manual data entry and processing work.

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