electronic data interchange (EDI)

Definition

The predecessor to electronic commerce, EDI has been suitable only for large North American and European corporations and banks. Firms using EDI are interconnected through a global computer network, independent of internet although attempts are underway to integrate the two networks. It facilitates computer-to-computer exchange of electronic documents (such as purchase orders, advance shipment notices, and invoices) without human intervention or human readable (paper or electronic) documents. EDI eliminates manual re-keying of data, cuts order processing costs, increases data accuracy, improves cycle time, and makes just-in-time deliveries possible. Like internet it is a standards based system independent of the type of computer hardware and software employed.