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Electronic Data Interchange (EDI) is a set of standards for formatting information that is electronically exchanged between one business and another, or within a business. These standards describe how documents for conducting certain aspects of business—such as purchase orders and purchase order acknowledgements—are structured.
By specifying a standardized, computer-readable format for transferring data, EDI enables the automation of commercial transactions around the world. It provides a common, uniform language through which computers can communicate for fast and efficient transaction processing.
Before the development of standards, many businesses used proprietary systems to exchange trading information such as purchase orders and invoices. However, they recognized the economic need for a faster, less costly way to process information in order to stay competitive in the business world. Business sectors such as transportation, grocery supply, and banking drove the creation of standards for the communication of data.
In 1968, the United States Transportation Data Coordinating Committee (TDCC) was formed to oversee the design and development of format standards for transportation documents. In 1975, the TDCC released its first standard, the Rail Transportation Industry Application.
The Rail Transportation Industry Application focused on the content of a message—rather than the means of transmission—through the use of transaction sets. A transaction set is a business document that consists of an arrangement of data segments. The data segments include data elements in an exact order. The concept of the transaction set is the basis of the EDI ANSI X12 standard created later and widely used today.
About the same time that the TDCC was formed, the United Kingdom (UK) started its own effort to develop standard transaction documents for trans-Atlantic trade. The UK Department of Customs and Excise, with the help of the British Simplification of Trade Procedures Board (SITPRO), developed a competitive document standard for international trade, named TRADACOMS.
TRADACOMS is an early standard for EDI used in the UK retail and grocery sector. It was introduced in 1982 as an implementation of the UN/GTDI syntax, one of the precursors of EDIFACT, and was maintained and extended by the UK Article Numbering Association (now called GS1 UK). The standard is obsolescent since development of it effectively ceased in 1995 in favor of the EDIFACT EANCOM subsets. Despite the fact that further development of TRADACOMS effectively ceased in 1995, it has proved durable and the majority of the retail EDI traffic in the UK still uses TRADACOMS.