ERP vs EDI: What’s the difference? EDI ERP (2023)

In the last some years, the business world runs effectively with the help of technology as business owners become comfortable with its performance. So, the organizers like to go with an effective technology such as ERP. On the other hand, a group of business organizers come to use another best technology named EDI which surely makes the business profitable. 

If you come to use technology in your business, then you can go for ERP or EDI but you should go for anyone after having the knowledge of ERP vs EDI. To have complete information on EDI vs ERP, just stay on this page for a little bit of time as this article comes with the detail of the two software along with their difference.

ERP vs EDI Key Difference

It comes with a name, Enterprise Resource Planning.It comes with a name, Electronic Document Exchange.
ERP is systemized with operational tools such as WMS or job costing solutions.EDI is an exact technology for working in B2B process.  
EDI brings productivity and efficiency. EDI runs with the process itself.    EDI provides traceability and integration of IT systems. EDI eliminates paper documents and introduces automation.
It exchanges documents for large as well as small businesses. EDI is essential and saves time & money with more accuracy.  It is undoubtedly a heavy tool that needs creative planning and perfect implementation.
ERP comes to train employees and help employees just to enhance efficiency and productivity.ERP is a non-constraint-based tool.
It eliminates and automates manual processes and synchronizes data.ERP is a non-constraint-based tool in comparison of EDI ERP.
It is an effective tool that can be re-formed according to using benefits. It exchanges documents for large as well as small businesses. EDI is essential saves time & money with more accuracy.  

What is EDI?

EDI comes with the full name of Electronic Document Exchange and it enables businesses to exchange documents in an electronic pattern. It replaces paper-based documents like purchase orders and invoices. As a result, with it, a business can save time and eliminate costly errors because of manual processing. Through the process of EDI, information can easily move directly from one organization to another through a computer application. With this automated capability, data comes to be transferred rapidly instead of in hours, days, or weeks. Nowadays, most industries come to use EDI integration just to share a range of documents in the form of purchase orders or invoices. In most instances, the organizations are almost trading partners who exchange goods and services in their business-to-business networks. 

How does EDI work?

To know completely EDI vs ERP, you must follow the working procedure of EDI. The EDI transaction comes to be defined by the EDI message and it is vital to have proper governance processes in need of data quality. If information is missing or it is in the wrong place, the document regarding EDI might not be processed correctly. 

Many more organizations come to define EDI message standards including TRADACOMS, GSI, ODETTE, and Accredited Standard Committee X12 ( ASCX12).

Generally, there are two types of EDI transmission, and the types go for Point-point or direct connections. Under this condition, two computers or systems come to connect with no intermediary over the internet with secure protocols. Value-Added Network (VAN) – A third-party network comes to manage data transmission with the help of the main boxing paradigm. 

EDI includes Secure File Transfer Protocol (SFTP), AS2 or Applicability Statement 2, Object Access Protocol (SOAP), an HTTPS-based protocol, and many more. EDI data elements carry items such as sender ID as well as receiver ID. Data segments combine more related elements in need of greater meaning. As an example, you can understand better, FNAME and LNAME can come to combine in need of formation named customer name. 

EDI document flow describes the movement of EDI messages to inbound and outbound addresses along with departments just to execute a business process or even transaction. Met languages like Extensible Mark-up Language (XML) or JavaScript Object Notation complement and replace EDI. The thing is that companies come to be ready to handle an ever-increasing number of document transactions and format options. One global manufacturer routinely exchanges about 55 different document types with nearly 2000 partners.

Benefits of EDI

EDI transactions are very essential in need of B2B processes and even the transaction comes to continue in need of exchanging documents and transactions between businesses for small as well as large. The benefit of EDI will help you to differentiate both EDI ERP systems. This technology saves money and time through the process of automation instead of paper documents. 

It improves productivity & efficiency as business documents are shared and processed with greater accuracy and in less time. EDI data transfer decreases errors through rigid standardization that helps to ensure information including correct data before they enter the business functions process or the application.

The EDI integration comes to improve traceability with reporting as electronic documents can be integrated with a range of IT systems just to support data collection, analysis, and visibility. EDI automation comes to support positive customer experiences enabling efficient transaction, execution, and reliable product & service delivery. 

For large organizations, EDI enables standardization for trading partners just to achieve benefits and other facilities. For smaller organizations, adherence to EDI goes with an offer for greater integration with larger firms that have big budgets and strong influence. On the other hand, knowledge of ERP will help to understand clearly EDI vs ERP. Just go through the details mentioned below. 

About the EDI business environment

It is very common thing that EDI comes with inherent problems with the use of paper-based methods of exchanging information. The problems are mentioned below.

  • Inefficient
  • Labor intensive 
  • Not easily identified
  • None a trace of visibility in the process
  • Data Entry
  • High error rate

EDI technology can standardize the document format allowing businesses in need of sharing content with the various back-end business applications which provide support to the enterprise. EDI technology is designed to insulate the user form in the format of EDI.

Virtual Enterprise comes to use the technology under the supervision of the internet that provides a model. The model integrates trading partners in a single value chain. When the model comes to be dependent on the internet, it seems to be the coordination of trading partners in need of the enterprise. Virtual Market Place comes to be formed electronically using WEB technology. It increases the need for information beyond what traditional enterprise business systems can easily provide.

What is ERP?

ERP comes with the full form of Enterprise Resource Planning. It works under a proper software system. The ERP software carries the biggest advantage in resolving accounts including the finance system. It is very essential as the system makes you sure about your product quality from time to time. A study suggests that about 97 percent of mid-sized business takes step for using ERP software. Even it is the best effective for sales, forecasting, execution, customer care, and shipping logistics. This system will allow the company to carry the information regarding the company’s finance, and manufacturing departments. It brings profit including financial status. Even it will help you to track orders with production and delivery. 

How does ERP work?

Through the work of ERP, the users can come to understand clearly the difference between EDI ERP. ERP is an essential business tool that brings you the services of Oracle ERP, Epicor ERP, SAP, and Microsoft Dynamics AX & among others. It comes to be used in manufacturing, accounting, resources, inventory management, distribution, and purchasing. This one also works for financial transactions including business decisions. 

What is the benefit of ERP?

  • ERP brings a lot of benefits in need of business growth. Just have a look below.
  • It works for quality products in a cost-controlled manner. 
  • It works for Oracle ERP, Epicor ERP, SAP, and AX. 
  • ERP comes to be used for purchasing, accounting, human resources, and order management.
  • It brings transactional data for future business. 

Related article: What are the Major Business Benefits of ERP Software?

ERP Business Environment

ERP implementation grabs the need for an account of the Operating system and RDBMS in need of hosting the system. The environment of ERP is dependent on some of the essential things that are given below.

  1. Operating System and Database-The most popular players in the RDBMS market are Oracle, IBM, Microsoft, and Sybase. In the OS sector, there must be a requirement for an appropriate database to bring accuracy and good performance.  
  2. Networking Issues – There must be some essential networking problems relating to ERP integration such as WAN, LAN, and many more and these are to be indemnified first, and then solution requirements must be necessary. 
  3. Licensing issues for ERP products – Implementation of an ERP needs a license and support agreement with the vendor. The agreement constitutes a complex legal document with details of the license. 

How do EDI and ERP work together?

EDI is no doubt essential for business and it becomes more valuable when it works under implementation with ERP. If EDI and ERP are used in sync, the combination allows for a host of benefits along with greater chain visibility, reduced lead time, and faster order processing. It is very important to know that the system generated with ERP EDI, will make your business more efficient in all ways and even make it easier to interact with your business and third parties. 

With the help of ERP EDI systems, you can eliminate the process of paperwork and keep everything based on your internal system. It is surely beneficial to the environment and even it brings easier track of systems and documents and resolves issues quickly. 


If you want to be a successful business organizer, it will be a good idea for you to get in touch with EDI. But the best thing that you can make for your business is to implement EDI with an ERP system. With this combination of EDI ERP, you can save a good deal of money and ensure a good business.

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