Ultimate Glossary of EDI Terms

In this article, learn about:

• Key EDI Terms and Acronyms

• Essential Concepts in EDI

What is EDI?

Electronic Data Interchange (EDI) is an electronic communication method that provides standardized data exchange between companies. EDI is crucial in business transactions, making it essential to understand the many terms and acronyms associated with this technology. Bookmark this comprehensive glossary to keep these EDI definitions just a click away.

Related Reading: What Is EDI (Electronic Data Interchange)?

Essential EDI Terms to Know

• Alpha Character Set: A character set that contains letters; it may also contain control and special characters but no numeric characters.

• Alphanumeric Character Set: A character set composed of both letters and numeric characters, and may also contain control and special characters.

• American National Standards Institute (ANSI): The organization established to define, maintain, and coordinate standards in the United States. Data processing standards are supervised by committees named X followed by a number as an identifier (e.g., ASC X9 is the banking data encryption committee).

• Application Program: A software application designed to process a specific business function, such as mortgage processing.

• ASC X12: The Accredited Standards Committee X12 is an organization established by ANSI to develop uniform standards for electronic data exchange.

• Baud Rate: Refers to the speed of data transmission in terms of the number of signal changes or symbols transmitted per second over a communication channel.

• Character: A standard representation of a symbol, letter, number, or special character. Represented in a computer as a byte.

• Character Set: A finite set of characters considered complete for a given purpose.

• Codifying: The process of developing and detailing a new standard.

• Communication Session: A predetermined period in which data is exchanged between computers. The more complex the network, the more sophisticated this task becomes.

• Communications Protocol: This protocol establishes the communication parameters between two computers, including baud rate, type of transmission, and parity setting.

• Compliance Checking: Compliance checking involves comparing the information sent by an EDI user against established EDI standards to identify and reject any missing data elements or syntax errors. The anomalies are then reported back for correction.

• Conditional: In EDI standards, this indicates that the presence of a data segment/element is at the discretion of the sending party, i.e., used as required or based on mutual agreement, or dependent on the value and/or presence of another data element in the transmission.

• Configuration: The specific arrangement of the processor, storage devices, communication devices, and features within a computer system. It also includes the operating system type.

• Confirmation: A formal notice from a mailbox system or EDI server that a transmission sent to a trading partner's mailbox has successfully reached its intended mailbox or has been retrieved by the addressee.

• Connectivity: The ability for two independent computer systems to communicate seamlessly. For example, OSI and X.400 standards address connectivity.

• Data: A representation of facts, concepts, or instructions in a formalized manner suitable for communication, interpretation, or processing by human beings or by automatic means.

• Data Dictionary: A comprehensive table of terms used within a specific application, ensuring that each term has a precise and consistent meaning for all users of the system.

• Data Element: The smallest unit in an EDI transmission that can convey data. A unit of data for which the identification, description, and value representation have been specified. A data element is analogous to a field in non-EDI terms.

• Data Element Attribute: A defined characteristic of a data element.

• Data Element Separator (Delimiter): A character used to indicate that a new element of data has started. The most common separator is * (the asterisk symbol). Other common delimiters are | (the pipe symbol),  tab, or comma.

• Data Element Directory: A document that describes the attributes of all data elements within an EDI standard. The directory also lists identified, named, and described data element attributes, with specifications on how the corresponding data element values shall be represented. It defines the data type, minimum and maximum length of the data, and, if appropriate, a list of acceptable values.

• Data Element Number: A unique reference number used to identify an element and make a cross-reference between elements.

• Data Entry: The task of keying in data to a computer system from a source document.

• Data Integrity: The condition of data in a whole, original, and uncorrupted form.

• Data Mapping: A method by which information in one format is restructured to a different format.

• Data Segment: A predefined and identified set of functionally related data elements identified by their sequential positions within the set. In non-EDI terms, a data segment is analogous to a record.

• Data Segment Directory: A document that provides the definitions and formats of the data segments used to create a transaction set. This document is critical when troubleshooting issues.

• Data Segment Identifier: A unique code consisting of one or more alphanumeric characters appearing as the first data element of each data segment. The code indicates the purpose of each segment.

• Data Segment Requirement Designator: A character that indicates a data segment's mandatory/conditional status.

• Data Segment Terminator: A special character inserted in a data segment immediately following the last data element of the segment. A common terminator is ~ (the tilde symbol).

• Direct Link: Communication between two trading partners where the message is transmitted, usually through a modem, directly from one computer to the other computer.

• DISA: The Data Interchange Standards Association serves as the secretariat for the ANSI ASC X12 committee.

• Download: Transfer of information from a mainframe computer to a microcomputer.

• EBCDIC: Extended Binary-Coded Decimal Interchange Code, an 8-bit code used for computer storage and processing.

• EDI: Electronic Data Interchange, the computer-to-computer exchange of standardized business documents in a machine-processable format.

• EDIFACT: Electronic Data Interchange for Administration, Commerce, and Transport, an ISO standard designed to establish a unified international EDI framework.

• EFT: Electronic Funds Transfer, a broad term for transmitting payment instructions over a computer network.

• Electronic Envelope: A pair of data segments designating a transaction set, a functional group, or an interchange, usually at the beginning and end of the set.

• Electronic Mailbox: A designated holding location for electronic messages. The mailbox can be on the user's computer or, as is more common, on a third-party network (VAN).

• Flat File: A plain text file (usually .txt or .csv) with data organized in a fixed-field format (e.g., ASCII or EBCDIC).

• Front End Processor: The use of a microcomputer or minicomputer to communicate with a mainframe computer. In EDI, a front-end processor would normally perform mapping, translation, and communication functions.

• Functional Acknowledgment: An automatic response by the EDI server that a message or batch of messages has been received, along with an indication of syntax errors.

• Functional Group: A group of like transaction sets, representing the transmission of a group of similar documents.

• Gateway: A point of interconnection between electronic networks, enabling communication by linking two third-party networks and facilitating the transfer of messages between them.

• Header: Data at the beginning of an EDI message, inserted for initial recognition. The header contains a control number that must match the control number in the corresponding trailer.

• Hub: The pivotal center of a trading network.

• IEA: Interchange Control Trailer, which marks the end of an interchange containing one or more functional groups and related control segments.

• Implementation: The activities involved in converting an idea into a working computer system. This includes everything from consultation to hardware installation, integration, and operation.

• Incompatible: Applied to systems that cannot communicate with each other because of dissimilar documents, files with different formats, or different communication protocols.

• Integration: The process of adapting systems and standards to ensure compatible communication.

• Interchange: An electronic exchange between two business partners. The interchange is indicated by an interchange control header and an interchange control trailer. It is comparable to an outer envelope in paper transmissions.

• Interchange Envelope: An envelope that contains the interchange header and trailer segments, control number, and a number of functional groups in the interchange. One interchange envelope is required for each transmission.

• Interface: The point of interaction where different systems or software applications connect and exchange data.

• Interpret: The process of using translation software to align a system with the input requirements of a receiving computer system within an EDI community, effectively the reverse of translating data.

• ISA: Interchange control header that identifies the beginning of an interchange of one or more functional groups and interchange-related control segments.

• ISO: International Standards Organization; an organization with the UN to which all national and other standards-setting bodies defer. Encompasses the Open System Interconnect (OSI) seven-layer model, enabling all networks and computers to communicate freely.

• Loop: A group of segments that are collectively repeated in a serial fashion up to a specified maximum number of times.

• Machine Processable Format: Data in designated fields so that a computer can automatically process the data without interpretation or re-keying.

• Mailbox: A repository for messages in an electronic mail system or EDI server. Only authorized transmissions are allowed in a mailbox. The EDI server authenticates each transmission before depositing it in the appropriate "pigeonhole" of a mailbox.

• Mandatory: A requirement that a data segment, data element, or component element must be included.

• Mapping: The process of taking data from a company-specific format and fitting it to the EDI standard format (transaction set).

• Mapping Software: Software designed to perform the mapping process (see Mapping).

• Modem: A device that encodes information into an electronically transmittable form (Modulator) and restores it to the original analog form (DEModulator).

• Nested Segment: A segment that directly relates to another segment in an identified and structured group of segments covering the requirements for a specific transmission.

• NIST: U.S. National Institute of Standards and Technology.

• Node: An access point in a network.

• Optional data element/segment: Contains information not required by the standard but that could be included in the transaction at the discretion of the sender and receiver.

• OSI: Open Systems Interconnection (see ISO).

• Passthrough: Access of data to a network by traveling across another network via gateways.

• Protocol: The set of rules that define how information can flow within a computer or communication system. A protocol comprises:

  • Syntax: Commands and responses.

  • Semantics: The structured set of requests and actions permissible by each user.

  • Timing: Types of events and sequences.

• Reference Designator: A unique alphanumeric indicator that specifies the position of a data element within a data segment.

• Security: A generic term used to describe the methods adopted to protect data from loss, corruption, and unauthorized access and retrieval. Methods used include passwords, ID numbers, authorization, message/document type/mailbox address verification, and line ID verification.

• Segments: Groups of elements.

• Segment Directory: A listing of identified, named, described, and specified segments in a transaction set.

• SNA: Systems Network Architecture; an IBM proprietary communication protocol.

• Standards: Rules established to enable incompatible computers and communication systems to exchange information and ensure that documents be exchanged seamlessly.

Related Reading: What Are EDI Standards?

• Synchronous: A clock-controlled method of data transmission for use in high-speed circuits or networks.

• Table-Driven Program: A program in which the factors, variables, and data to be used are looked up from a table or matrix, or held on a file or in memory.

• TDCC: Transportation Data Coordinating Committee, an early 1960s standards-setting committee.

• Telecommunication: The use of a network to transmit voice, data, or image.

• Third-Party Network: A service provider working as an EDI message clearinghouse. It will normally provide both mailbox and value-added services, such as translation of data from one format to another. Also known as a VAN.

• Trading Partner Agreement: This document outlines all the conditions that will allow electronic communication between trading partners. The agreement states that the parties intend to operate in the same manner as though they were exchanging hard copy paper documents, with the signature on the agreement serving as a substitute for the signature of each paper-based business document previously submitted.

• Trading Partner: Any company, government department, or commercial or non-commercial entity with whom another company (or organization) is doing business by regularly exchanging documents of formatted data (not just letters or memos). EDI links trading partners electronically.

• Trailer: A segment that ends every envelope and provides a count of segments, transaction sets, or functional groups. The trailer contains a control number that must match the number contained in the header.

• Transaction Set: Transaction sets are groups of segments. In EDI standards, the name was given to a complete trading document sent electronically or an EDI document (also called messages).

Related Reading: List of EDI Transactions and EDI Document Codes

• Translation Software: Software used to take data from a vendor-specific flat file and convert it into an EDI standard format.

• Upload: Transfer of data from a microcomputer to a mainframe.

• Validation: The process of checking whether a document is the correct type for a particular EDI system and whether it comes from and is going to an authorized user.

• Value Added Network (VAN): A third-party network performing services beyond data transmission. For example, VANs may provide translation, training, and encryption services.

• Van Interconnect: The connection between two third-party networks that allows messages from one to be communicated to the other.

• X.400: An international standard for electronic messages in a free format.

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