How do EDI and XML relate

To understand the relationship between EDI and XML, we’ll first need to explain what EDI is and what its role is.

EDI is the technology that enables computers to speak the same language, providing the ability to send business documents in a common format.



EDI is accessible through two different methods, which we will elaborate on below:

  • The ANSI X12/EDIFACT standards approach.
  • The XML approach.

The first approach takes into account the actual geographical location of the company and relies on the creation of EDI documents that follow the rules imposed by certain popular standards. For example, in the United States, the most popular standard is ANSI X12, while EDIFACT is used in the rest of the world. These standards essentially specify where the data will be placed in the document.

The second approach succeeded in eliminating this factor, so that location is not a factor in the equation. Electronic business documents can thus be created with greater flexibility, as XML is not actually a standard that imposes rules. With the help of XML, you can practically create payment orders, invoices, purchase orders – the same documents defined by ANSI and EDIFACT. XML is very useful at the enterprise level, being used to distribute data between multiple system components. Additionally, there is a very popular standard that uses XML – it’s called RosettaNet and was created by a consortium of telecommunications and logistics companies, as well as consumer electronics products, etc.

XML is also used on a global scale, improving supply chain processes worldwide. Location dependence is not the only factor that sets ANSI and EDIFACT standards apart from XML. The way they function is quite different, in fact: the former are very strict regarding the positioning of data within the document, while the latter uses tags to identify specific categories, such as date, quantity, etc., and appears as follows: “<quantity>4</quantity>” to indicate the numerical value for quantity. All these tags result in a much larger file, but this difference in size will prove its worth when human intervention is required, and troubleshooting needs to be done.

At some point, there were certain rumors suggesting that EDI would be replaced by XML – but that was not the case. EDI has proven to be extremely efficient, covering every need a company may have in terms of efficiency and productivity.

If you would like to learn more about EDI, XML, and how they relate, don’t hesitate to give us a call.