EDI stands for "Electronic Data Interchange" and is a process of exchanging business information from computer to computer. Business transactions can thus be run without human interference, and the same information is produced as if it were on a hard copy of paper.

EDI is a modern technology that is extremely beneficial for the following reasons:

• Inventory management is more accurate and efficient
• Costs are reduced
• The time of a normal business transactions is drastically reduced because of instantaneous technology
• Less paper use/waste
• Because of improved accuracy and more efficient time, sales and business partnerships increase
• Improved relationships with clients, resulting from increased accuracy and more efficient customer service
• Businesses that use EDI see their productivity increase, because less "human" time is spent on the transaction cycle

The standards of EDI were created and continued to be maintained by the Accredited Standards Committee (ASCX12), which was created in 1979 to develop uniform standards for interindustry electronic exchange of business transactions. Any new developments or updates are put in place through general approval and reflect the growing needs of business technology. According to ASCX12, over 300,000 organizations use EDI to conduct business.

XML stands for "Extensible Markup Language" and is a web-based computer language that enables structured sets of business data to be exchanged over the web. XML, when united with EDI, creates a unique and uncomplicated business solution that broadens the current infrastructure to include trading partner agreements, establish dynamic trading networks, and accelerate the implementation of new products and programs while simultaneously reducing costs.

Using XML with EDI allows for the following:

• The exchange of transactional business data
• Message/Protocol infrastructure development
• Creating trading partner agreements
• Creating a standard business process for use in the B2B exchange
  

By using XML and EDI, businesses become part of a world-wide effort to create standard applications for business partnerships, messages, and transactions, which enables more and more businesses to work together smoothly, and increase their accuracy, sales, and productivity.