What The Retail CFO Needs To Know About EDI

Isn't it amazing that you can pick up a phone any time of day and call almost anywhere in the world? Regardless of the type of phone, the carrier or the plan you have, you can feel confident that your call will take place and the technology will function properly. But what if you had to worry each time you placed a call that the technology wouldn't work properly? What if you could only talk to people with a similar phone, on a similar network, with a similar phone plan? What if your landline phone couldn't communicate with a cell phone? What if a cell phone you purchased at AT&T couldn't communicate with a phone you purchased at Verizon or you needed a separate phone for each carrier? Could you imagine what would happen if only one carrier and hardware provider could participate in a conference call? Fortunately, the standards adopted years ago by the phone industry help to provide a near-seamless experience today regardless of the phone, plan or provider you use.

Just like the standards within the phone industry that enable parties to communicate with each other, data may also be communicated between parties using a standard. Although there are a number of nomenclatures that describe data communication and integration today—Business-to-Business (B2B), XML, FTP—the best acronym that's stood the test of time for over 40 years is EDI (Electronic Data Interchange).