When Electronic Data Interchange (EDI) was introduced in the late 1960s, it revolutionized how businesses operated. It automated manual tasks, reducing human error and processing times. It also digitized documents into a standardized format, allowing trading partners to share information and complete transactions in real time. In short, it ushered in a new era that companies across sectors still rely on today.
Now, think about everything that’s come since then: the internet, wireless networks and 5G, cloud computing, and advancements in AI, machine learning, and blockchain. It’s remarkable that EDI was created long before but remains as relevant as ever.
But how has EDI evolved over the years, and what’s the future of EDI? In this guide, we’ll explore how EDI has adapted to technological breakthroughs and how today's EDI trends are shaping its next chapter.
EDI Software: Trends to Watch Now and in the Future
From AI and machine learning to blockchain technology, here are six EDI trends to keep an eye on:
AI, Machine Learning and Automation in EDI
Two technologies already transforming how businesses use EDI software are artificial intelligence (AI) and machine learning (ML). AI automates repetitive tasks typical to EDI, like validation, data parsing, and mapping, reducing manual work, minimizing errors, and speeding up transactions. Meanwhile, ML uses predictive analytics and historical data to identify potential errors before they happen. By catching problems early, ML helps keep supply chains running smoothly.
Cloud-based EDI providers like Orderful combine both AI and ML into solutions with automated data mapping and instant validation, allowing for more accurate transactions and compliance with industry standards.
API and EDI Integration
Hybrid API-EDI systems combine the reliability of traditional EDI with the adaptability of APIs to create a more modern and efficient way to exchange data. APIs act as intermediaries that connect different software systems — such as order management platforms, warehouse management systems, payment gateways, and other otherwise incompatible tools — in real time.
What makes APIs so adaptable compared to traditional EDI systems? Their use of standard protocols and frameworks, like REST or GraphQL, allows them to exchange data between systems, even if those systems weren’t designed to work together. Unlike traditional EDI's fixed, predefined formats, APIs adjust to the specific needs of each integration. Thanks to this flexibility, businesses can quickly onboard new systems or partners without having to completely reconfigure their existing infrastructure. Inventory updates are instant, and there’s less risk of overselling products and disappointing customers.
Advanced EDI Security Protocols
The data that businesses share via EDI systems is sensitive and valuable — and, if not properly protected, susceptible to cyberattacks. Advanced encryption protocols like TLS (Transport Layer Security) and AES (Advanced Encryption Standard) guard against unauthorized access, helping keep data safe during transmission and storage.
This level of security is particularly important in industries like healthcare (hospitals sending patient records to insurance providers, for example), where encryption isn’t just a benefit — it’s the law. Legal regulations, such as the Health Insurance Portability and Accountability Act (HIPAA), make sure all parties are doing their part to keep private information safe from bad actors.
Cloud-Based EDI Solutions
Cloud-based EDI solutions are another trend on the rise thanks to the several advantages they offer. They're generally more cost-efficient than traditional EDI systems, as they eliminate the upfront investment in expensive infrastructure. Instead, cloud-based EDI providers manage infrastructure and services, including server hosting, data storage, and system monitoring, through a pay-as-you-go subscription model.
Cloud-based EDI providers also handle software updates so that systems are always compliant and up to date — a task that, with traditional EDI, usually requires manual intervention and dedicated in-house IT support. Also, unlike traditional EDI, which is typically tied to on-premise infrastructure, cloud solutions allow companies to access their EDI systems anywhere with internet access, making it much easier to collaborate with trading partners regardless of location.
Here’s a closer look at two industries where cloud-based EDI solutions are at work:
SaaS
By integrating with customer relationship management (CRM) and enterprise resource planning (ERP) systems, EDI allows B2B SaaS companies to automate the real-time exchange of business documents that would otherwise require manual processing. Purchase orders, invoices, and shipping notices are transmitted electronically, leading to faster order fulfillment, fewer errors, and better collaboration between customers, suppliers, and teams.
Supply Chains
Cloud-based EDI solutions make it possible for trading partners to share data in real time, improving coordination between suppliers, shippers, and logistics providers. Trading partners can instantly exchange shipping notices and inventory updates, reducing delays and increasing transparency across the supply chain.
EDI also supports Just-in-Time (JIT) inventory management so that orders are processed, shipped, and delivered precisely when needed, minimizing excess inventory and preventing stockouts.
EDI and Blockchain
While often associated with cryptocurrency, blockchain technology — and its decentralized structure — also has practical uses in EDI systems. Each EDI transaction can be stored as an immutable blockchain entry, keeping the data tamper-proof and safe from breaches. Blockchains also create a detailed, unchangeable record of every transaction, making it easier to identify issues, resolve disputes, and reduce delays, ultimately building trust among trading partners.
Another feature adapted from the crypto world is automation through self-executing smart contracts, which require predefined conditions to be met before processing data or completing transactions. In EDI, that could be verifying shipment details, approving payments, or meeting compliance standards.
Trends in the Healthcare EDI Market
EDI systems are already transforming how healthcare information is managed and shared, largely due to the industry’s shift from paper records to electronic health records (EHRs). Hospitals use EDI to send patient records to specialists, giving doctors quick access to medical histories during consultations or procedures. Labs leverage EDI to receive test orders and send results back to providers faster, speeding up diagnoses and treatments. Pharmacies, meanwhile, can process prescriptions electronically from doctors' offices instead of relying on handwritten or faxed orders. Even insurers benefit from EDI by automating claims submissions, approvals, and other processes, which reduces delays for both providers and patients.
EDI Solutions for Today, Tomorrow, and Beyond
EDI has come a long way, evolving from automating manual tasks in its early days to integrating AI, blockchain, and cloud-based systems today. With all its advancements, who’s to say what’s next? Connect with an EDI expert today to learn more about what the future of EDI could hold for you.