Different Types of EDI Compared

Global supply chains have always been complex, but 2020 revealed both the fragility and central importance of supply chain management. In a year of rapid change, the businesses that responded quickly and flexibly were the same businesses that recovered quickly and thrived in the new normal. In many cases, these success stories boiled down to excellent supply chain management.

In 2020, supply chains are no longer relegated to the back office — rising customer expectations means that they’re now front and centre, playing an integral role in your organisation’s commercial success. Electronic Data Interchange (EDI) — a system of exchanging business documents electronically — is core to capturing the visibility, control and optimisation necessary to make effective strategic and tactical choices within the global economy. 

Getting your EDI choices right is critical to creating a more stable future, strategically and tactically aligning your business with supply chain realities, and harnessing efficiencies to drive competitive advantage. At Data Interchange, we pioneered some of the first EDI systems in the UK and Europe. We’ve also spent more than fifty years helping businesses across the economy maintain supply chain relationships. From this perspective, we are going to explain and compare the main types of EDI and provide insight into which type could be right for your business.

Download a free ebook about EDI supply chain

EDI Type 1: Direct EDI/Point-to-point

Direct EDI, also known as point-to-point EDI is the oldest and most traditional form of EDI. It’s often deployed on-premise and delivers a direct line of communication between two businesses through an EDI software package that utilises agreed-upon protocols, including AS2, OFTP or SFTP. 

Benefits & drawbacks of this type of EDI

When you use on-premise EDI, you are in full control. You can service the platform yourself, which means you do not need to wait around for third-party support teams. There are also no additional costs. By comparison, if your EDI is not on-premise, you will usually pay for data and hosting services. 

For many businesses, the downside to communicating individually with each business partner is managing potentially hundreds or thousands of separate connections. Throw different communications protocols into the mix and things can grow even more complicated, as your system must be able to support each of these protocols. Remember, you need to accommodate every EDI standards used within your supply chain — e.g, EDIFACT, VDA, X12, to name just a few. 

Managing these inevitable complexities requires a competent team with the right skills. However, finding and maintaining such a team can be challenging due to EDI skill shortages — as many as 29% of businesses state they lack the resources to build and maintain integration in-house. It’s important to note that Direct EDI requires the most in-house expertise of any of the options on this list. 

Who should use this type of EDI

Direct EDI is most commonly used between larger customers and suppliers with significant numbers of daily EDI transactions. These solutions are best suited for businesses with in-house expertise and a limited number of stable supply chain relationships. If you do want a Direct EDI system, consultancy services like those offered at Data Interchange could help you set up a point-to-point solution. But, ultimately, you are left in charge of managing your own system — unless the system is part of a managed solution, which we’ll elaborate on a bit later. 

Pro Tip: If you lack the right skills in-house, a direct EDI solution is probably not the right choice.

EDI Type 2: EDI via VAN

Probably the most common type of EDI used today is EDI via Value Added Networks (VAN). EDI via VAN is a cloud-hosted solution that deploys private networks provided by EDI specialists (or VAN providers) to connect you and your trading partners. The VAN provider manages the network and provides organisations with ‘mailboxes’ where you can send and receive EDI documents, such as purchase orders and invoices.

Benefits & drawbacks of this type of EDI

As compared to a Direct EDI solution, a VAN is much more flexible, particularly when it comes to managing a large number of different relationships or turnover within your supply chain. Fundamentally, EDI via VAN can reduce your risks, minimise your costs and increase your efficiency.

However, using a VAN does not eliminate all of your problems. You lose some degree of control over the flow of your data once sent into the VAN, and are effectively adding another step in the chain that is really just a middle man. You still need to ensure effective connection to the VAN, and its use by your supply chain partners. It’s also worth remembering that your customers will each have their preferred B2B data communication methods — once again, this means many different standards and communication protocols. Depending on the VAN in question, these may or may not be supported, and you need to ensure that compatibility.

What to look for in this type of EDI solution

When looking for a Web EDI solution, you’ll want to find a product that offers intuitive dashboards, simple upload tools and fully integrated functions. Our Web EDI software, Darwin Hub, delivers these, as well as the core functionality required to enable your suppliers to exchange standardised data with only a web browser. Darwin Hub also seamlessly integrates with your internal business systems, tailoring the EDI environment to meet with your business rules, processes and specifications. Darwin Hub can help your business:

  • Drive efficiency, with supplier data automatically integrated into your internal systems.
  • Simplify order processing and increase accuracy.
  • Streamline on-boarding processes for suppliers, increasing adoption of EDI across your supply chain.
  • Remain flexible and future-proof by making it easy to add more suppliers to the web portal.

Who should use this type of EDI

The simplicity of WebEDI beings brings a number of benefits to businesses throughout a supply chain. The install-and-go nature of web tools make them a great choice for businesses working with less tech-savvy partners or those in countries/regions where EDI and other IT skills are in short supply. For any organisation with supply chain partners that have limited EDI expertise, WebEDI can be an essential tool for integrating those partners within a complete EDI system. 

Fundamentally, Web EDI is a critical tool for any business with limited EDI expertise — consider how it can benefit you and your supply chain partners.  

EDI Type 3: Web EDI

Web EDI takes the simplicity of a VAN solution one step further. WebEDI can be used in tandem with almost all of the other strategies here. Still, we’re separating it out here, as the term represents a growing number of tools that operate from web browsers and dramatically reduces the learning curve for effective deployment of EDI.

Benefits & drawbacks of this type of EDI

The primary benefit of Web EDI tools is simplicity — they offer more automation and a simpler interface. For example, a lot of Web EDI tools are defined by browser-based duplicates of paper-based forms — allowing users with no EDI experience to input details. Those forms are then used to automatically generate an EDI request and automate all of the backend technical processes. 

The fact that Web EDI is browser-based is central to the simplicity it offers. It also removes any installation configuration process to minimise challenges with integration. Effectively, Web EDI works like a SaaS tool in so much as it delivers, as-a-service, over the internet. Although you could make a similar comparison for EDI via VAN. 

Who should use this type of EDI

The simplicity of WebEDI beings brings a number of benefits to businesses throughout a supply chain. The install-and-go nature of web tools make them a great choice for businesses working with less tech-savvy partners or those in countries/regions where EDI and other IT skills are in short supply. For any organisation with supply chain partners that have limited EDI expertise, WebEDI can be an essential tool for integrating those partners within a complete EDI system. 

Fundamentally, Web EDI is a critical tool for any business with limited EDI expertise — consider how it can benefit you and your supply chain partners.  

Pro tip: Web EDI can form one part of a “hybrid EDI model” that pulls on different types of EDI within an integrated solution. This is a great option when partnering with many different suppliers and customers, all with different EDI requirements. However, you need to make sure that each component of a hybrid solution is able to work seamlessly together in order to avoid manual or ad-hoc processes that could undermine the effectiveness of the system as a whole. 

EDI Types 4: Managed EDI service 

In a new global and digital era, the most responsive and digitally advanced supply chains will inevitably come out on top. EDI-as-a-service is a direct route to harnessing this competitive advantage. When EDI is delivered as a service, it can bundle different types of EDI and deliver that bundle as a seamless outcome for you. 

Benefits & drawbacks of this type of EDI

As a methodology, EDI has always promised to take the challenge and pain points out of supply chain management. However, as pointed out in previous sections, the complexity of the EDI ecosystem often works against this goal. Different types of EDI need to be deployed for different reasons — and engaging with multiple EDI standards and protocols is essential.

Partnering with a managed service completely removes all complexity — even where different EDI protocols are used. A managed service will configure your implementation, promote business continuity and ensure risk-free outcomes. This frees you up to focus on your core business. 

Partnering with a managed service also solves fundamental EDI problems by enabling your system to:

  • Scale up or down to meet demand: chains must be built with continuous changes and exogenous shocks in mind. Managed services help you create responsive, flexible routes within the network to mitigate risk.
  • EDI in-house skill shortages: EDI is a fundamental technology required in the marketplace, but it is also a niche technology. As a new generation moves into the industry, an EDI skills gap will inevitably emerge, making it more difficult to recruit and retain EDI experts. Cloud-based tools and mobile EDI apps can help reduce the learning curve, but you will need to spend time and money training new staff. However, partnering with a managed service guarantees that you will have the experts you need on-hand.
  • Benefit from 24/7 support: Again, many businesses struggle to find and retain any EDI talent, much less enough talent to provide 24/7 support. Partnering with a managed service gives you instant, around-the-clock access to the expertise you need when you need it.

Who should use this type of EDI

Managed solutions allow businesses large and small to overcome the most complex supply chains while experiencing seamless outcomes. Also worth noting is that managed solutions give businesses an easy avenue to build a hybrid solution, combining elements of multiple types of EDI to improve the flexibility of supply chain relationships. Finally, managed solutions allow businesses to overcome the EDI/IT skills shortage and free up internal resources to focus on core business competencies and outcomes. 

The future of EDI: Simpler, flexible and automated EDI-as-a-Service 

Most EDI trends point towards greater inclusion of purpose-built tools and services that simplify access and utilisation of EDI. Although there isn’t one term for this trend, it’s something that we refer to as “EDI-as-a-Service”. 

EDI-as-a-Service is sometimes used to reference managed EDI services. Although the use of managed service is helpful, the change occurring within EDI is broader. Web EDI, for example, is a significant development that is mostly defined by using cloud-based tools — it’s effectively EDI SaaS (Software-as-a-Service). And managed services increasingly deployed these cloud-based tools within their service offerings to improve customer experience.  

Using the best part of each type of EDI

Although it’s worth thinking about different types of EDI, the future of EDI will certainly be defined by hybrid models that deploy multiple types of EDI within a single system that is simplified by technology. EDI-as-a-Service can be broadly thought of as the convergence of these two trends. First, the use of SaaS tools to simplify EDI access; and, second, the increased deployment of managed service to deliver EDI as an outcome. 

Together, both of these trends simplify EDI adoption and management, allowing you to focus on what really matters — using EDI to improve supply chain relationships and drive commercial success. Don’t lose sight of that end goal. In 2021 and beyond, supply chains are set to take centre stage. Now is the time to harness their power to your advantage. Data Interchange can deliver solutions to meet the specific needs of both you and your supply chain — no matter the complexity involved.

Transform your approach to supply chain management

Talk to an Expert


A Guide to EDI Protocols

EDI VAN Costs: Get the Right Solution for your Business

How Much Does EDI Cost?

How Do On-Premise EDI Solutions Work?

Our Plan at Data Interchange to Change EDI and Supply Chain Management

Integrating EDI with your ERP

In-house vs Managed Service EDI

What is an API Integration? And how does it affect EDI?

Epicor Acquires EDI Provider Data Interchange

6 Benefits of EDI in the Logistics Industry

4 Challenges Facing the Logistics Industry and How to Overcome Them

Top EDI Solution Providers in 2023

Solving Supply Chain Problems in the Logistics Industry

B2B EDI Integration Best Practices in 2022

How to Choose The Right EDI Provider in 2022

Supply Chain Analytics Trends in 2022

Future-proof your business: Take Advantage of Market Growth

Announcement: Andrew Filby becomes CEO of Data Interchange

7 Advantages of EDI in The Automotive Industry

Consumer Expectations cause Demand for Integrated Data

How to Optimise Your Automotive Supply Chain Processes

Post-Pandemic Supply Chain Challenges Increase the Pressure

EDI Made Simple for the Automotive Industry

Overcoming Supply Chain Visibility Issues in the Automotive Industry

Complex Supply Chain Problems and Simple Solutions

Supply Chain Flexibility: Why your customers need it

5 Automotive Supply Chain Challenges Facing the Industry

Supplier Performance Management Reimagined in 2023

How to Unite Emerging Supply Chain Management Technology Trends

Digital Supply Chain Trends Impacting 2021 and Beyond

Meet the Team: Marketing

Supplier Management Best Practices after COVID-19

The Future of EDI: Looking Beyond 2025

The top three supply chain data exchange requirements

The Advantages of EDI in E-Commerce: How to Gain a Competitive Advantage Online in 2021

A Crash Course on EDI Industry Standards: ANSI x12 vs EDIFACT vs OFTP and more

What is EDI Mapping?

What is EDI: The History and Future of Electronic Data Interchange

The Future of the Automotive Supply Chain

Supplier Relationship Management: How to reduce risk and improve performance

How to Manage Global Supply Chain Complexities in 2021

How EDI-as-a-Service Changes Supply Chain Best Practices in 2021

What is the Future of Supply Chain Management in 2021?

How to Overcome Supply Chain Risk in 2021

Agile Supplier Onboarding: Supply Chain Security in Uncertain Times

The impact of failed EDI on Supply Chain

How to Improve your Supply Chain Strategy Ready for 2021

Cloud-Based EDI Solutions vs On-Premise

5 Most Common EDI Implementation Issues and How to Solve Them

Are your EDI documents ready for the new EU/UK customs border?

B2B Integration Challenges

EDI vs API: Bridge the B2B connectivity gap

Ten things to look for in an EDI Managed Service Provider

World Mental Health Day 2020

Logicalis & Data Interchange – partnering for success

EDI – A data integration service critical to business success

Joining forces with SnapLogic: bringing together market leading iPaaS and EDI solutions

Joining Data Interchange: My lockdown experience

Data Interchange announces strategic partnership with SmarterPay

Access new trading partners quickly for COVID-19 support

Keeping supply chains moving

Our Web EDI solution gets a makeover

Coronavirus: Our Business Continuity Plan

With love from Data Interchange ♥

A new decade, renewed ambition and the next generation

Brexit and EDI

Data Interchange transform their Support service for an improved customer experience

Interview: An update on Data Interchange’s new CEO, Robert Steiner

Data Interchange appoints Robert Steiner as new CEO

MQ messages over ENX – Renault

Five key questions for your EDI provider

Data Interchange at the Odette Conference 2018

How to select the right EDI provider

Future proof your EDI and unleash growth

EDI: the Supply chain performance enhancer

Taking cost out of the chain

Non-EDI users held up in the mail

Over 41% of companies at risk without EDI

​Consolidating VAN providers

Increase visibility and productivity of supply chain logistics with Data Interchange’s B2B integration solutions

Data Interchange wins large business of the year award

Data Interchange launch new Support Portal

Data Interchange will be showcasing our EDI solution offerings and promoting the benefits of MMOG/LE

Metaldyne receive special recognition from Ford for 11th consecutive year

Making the move to cloud based EDI Solutions

Top 5 reasons to switch to EDI Managed Services

Data Interchange to power QAD Managed EDI On Demand