Electronic Data Interchange (EDI) is the concept of businesses electronically communicating information that was traditionally communicated on paper, such as purchase orders, advance ship notices, and invoices. EDI is the computer-to-computer exchange of business documents in a standard electronic format between business partners. It has existed since the early 70s, and there are many EDI standards (including X12, EDIFACT, ODETTE, etc.), some of which address the needs of specific industries or regions. EDI provides a technical basis for automated commercial "conversations" between two entities, either internal or external. The term EDI encompasses the entire electronic data interchange process, including the transmission, message flow, document format, and software used to interpret the documents.

EDI replaces postal mail, fax, and email, and it allows businesses to enjoy major benefits such as reduced cost, increased processing speed, reduced errors, and improved relationships with business partners. EDI documents can flow straight through to the appropriate application on the receiver’s computer, and processing can begin immediately. EDI standards define the location and order of information in a document format, and EDI internet transmission protocols include Secure File Transfer Protocol (SFTP), Applicability Statement 2 or AS2, an HTTPS-based protocol, Simple Object Access Protocol (SOAP), and others.

Many business documents can be exchanged using EDI, but the two most common are purchase orders and invoices. EDI makes it possible to minimize or even eliminate the manual steps involved in the transfer of information from the sellers computer to the customers computer. Electronic data exchange enables businesses to meet compliance standards for distributors and retailers by ensuring that each existing document has complete information in the appropriate format. By ‘mapping’ data to satisfy these specifications, providers can easily meet customer expectations, streamline interactions, and save time.