Advantages of EDI:
§ EDI provides cost savings by reducing paper and eliminating paper processing.
§ Time savings and eliminating repetition are other benefits from the reduction in paper processing.
§ Documents can be transferred more quickly and processing errors can be decreased allowing business to be done more efficiently.
§ More efficient processing will likely lead to improved customer service which will ultimately expand the customer base.
Disadvantages of EDI:
§ Contrasted to XML, which is not strictly standardized, many consider EDI to have too many standards.
§ EDI systems are extremely expensive making it difficult for small businesses to implement.
§ Many large organizations will only work with others who utilize EDI. This may limit the business small companies are able to do with such organizations and limit trading partners.
Uses of EDI:
Today EDI is being used across all industries, business functions and levels of economic activity. EDI transactions have been built to support all areas of business. As a result, it can be implemented by nearly any business entity:
§ Carriers, and
§ Government and financial institutions.