EDI - Electronic Data Interchange

EDI provides business process integration across companies by exchanging business documents such as purchase orders, invoices, and shipment notices in electronic form, using industry standard formats such as ANSI X12 ( American National standards Institute) and EDIFACT (Electronic Data Interchange For Administration, Commerce, and Transport).

What is EDI?
EDI is the electronic exchange of business documents between the computer systems of business partners, using a standard format over a communication network.

Typical Business document exchanged by business partners
Request for Quote

Customer Purchasing

Quote Purchase Order Order Acknowledgement Purchase Order Change
Shipment Notice

Order Management

Manufacturing Shipping
Bill of Lading

Shipment Status


Invoi ce

Accounts Payable

Accounts Receivable
Account Information

Remittance Advice Payment Data Account Information

Customer Bank


Supplier Bank

Components of the EDI system



Application Program

Application Program

Business document
Value - Added Network

Business document


EDI message

EDI message


Differences between ANSIX12 / EDIFACT
EDIFACT calls business documents messages and represents them by a name such as ORDERS for a purchase order, whereas ANSIX12 calls them transactions and represents them by a number such as 850 for a purchase order. EDIFACT uses the same segment in multiple places , where as ANSI has a specific use for each segment. EDIFACT has additional segments that apply to international trade. Conditional fields in EDIFACT are the same as optional fields in ANSIX12.

Components of the EDI System
♦Trade Partners : The trading partners can be any combination of organization or business types. ♦Application program : AP’s are responsible for generating and processing data in business documents ♦Business document : A business document is a legal document that defines the transaction conducted between trading partners. ♦Translator : The translator is responsible for mapping application data to the EDI standard format. ♦EDI Message : The standards EDIFACT /ANSIX12 defined various EDI messages that govern the rules , format, and content of data in a transaction. ♦Value-Added Network :The VAN provides a mailbox on the network to each trading partner. This mail box is polled periodically for messages. The application software does not have to be connected or running at the time of message exchange.

SAP - EDI communication.
EDI sub system


EDI sub system


The SAP EDI process comprises two distinct process 1. Outbound Process. 2. Inbound Process.

EDI OutBound Process
EDI-Enabled application DB repository

App doc
Selection program

VAN Outbound trigger program

Idoc file

EDI sub System Edi doc

1. Application document is created. The outbound process involves creating an application document, such as purchase order, sales order, and saving it in the database tables. 2. The IDoc is generated The application document just created is formatted to an IDoc format. The data in the application document format is suitable for the application modules, screens and internal programs.A document in an IDoc format is suitable for processing by EDI components.

3. The IDoc is transferred from SAP to the Operating system layer.
Document in IDoc format resides in the SAP database repository. This Idoc document must be passed down to the Operating System layer for processing by the EDI subsystem. The IDoc is transferred to the operating system as a text file. The document is still in an IDoc format. The only difference is the medium of storage.

4. The IDoc is converted to EDI standards
For EDI purposes, the document in Idoc format has to be converted into an EDI standard format. A type of third-party software called a translator carries out the transformation process and reports status back to the SAP system. SAP refers to these translators as EDI subsystems. SAP takes no responsibility for translation it just maintains the status reported by the EDI subsystem.

5. The EDI document is transmitted to the business partner.
After the document is converted to an EDI standard format, it is transmitted to a trading partner based on the partner’s EDI settings.

6. The Edi subsystem reports status to SAP
when and Idoc is under the control of the EDI subsystem, the subsystem can optionally report the state of processing at various milestones back to the SAP system.

EDI Inbound Process
EDI-Enabled application DB repository

App doc
Posting program

VAN Inbound trigger program

Idoc file

EDI sub System Edi doc

1. The EDI transmission is received.
Edi documents are received from business partner via the VAN. These documents are in one of the EDI standard formats.

2. The Edi documents is converted into and Idoc.
The document is converted into an Idoc format suitable for SAP applications. The process is carried out at the EDI subsystem level.

3. The IDoc is transferred to the SAP layer
the IDoc created is stored in text file at the operating system layer. The subsystem starts an inbound program in the SAP layer. This Program reads the Idoc file and creates and Idoc in the SAP repository for further processing.

4. The application document is created.
The IDoc received form the subsystem is passed to a posting program. This program creates an application document such as sales order, purchase order acknowledgement, invoice , or shipment notice.

5. The application document can be viewed.
The application document can be viewed via EDI is the same as any document created manually in the system.

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