Monday, 7:40 a.m. Forty purchase orders from Canadian Tire are sitting in the retailer’s portal. Someone on your team is about to spend the morning keying them into the ERP, line by line, then building the ship notices by hand.
EDI integration erases that morning: orders from your trading partners land straight in your ERP, and the acknowledgments, ship notices and invoices go back out on their own, in the format each retailer demands.
So what actually happens between your customer’s purchase order and the invoice that leaves your system?
In this guide, you will learn:
- what EDI integration is and how it differs from a plain Web EDI portal;
- how an order travels from your trading partner into your ERP, document by document;
- the steps, the timeline and the choices behind an EDI integration project;
- how EDI connects to SAP, Sage, Microsoft Dynamics and other ERPs.
What is EDI integration?
EDI, or electronic data interchange, is the exchange of business documents between two systems in a standardized format, such as ANSI X12 in North America or EDIFACT in Europe and the rest of the world. EDI integration is the bridge between those EDI messages and your internal system of record: the enterprise resource planning (ERP) software, and sometimes the warehouse management system (WMS) or the transportation management system (TMS).
Without integration, EDI stops at the company’s front door. With it, every purchase order becomes a sales order in the ERP, with no re-keying.
Web EDI or ERP-integrated EDI
A Web EDI portal lets you send and receive EDI documents from a browser, an affordable way in when volume is low, but the data still has to be typed into the ERP. Integrated EDI links the EDI platform directly to the ERP, which removes manual entry in both directions: incoming orders and outgoing documents. At Vantree, a company can start with Web EDI, then move to integrated EDI as its volumes grow.
How EDI integration works
An EDI integration rests on three parts: the standardized documents, the mapping that translates them for your ERP and the channel that carries them to your trading partners.
An EDI order, document by document
Take a retail order in the X12 standard. The EDI 850 purchase order arrives and becomes a sales order in the ERP. Your system returns an 855 to confirm quantities and the ship date, then an EDI 856 advance ship notice the moment the truck leaves. The 810 invoice follows.
Every document received is confirmed by a 997, the functional acknowledgment the recipient sends to attest that the file was received and could be interpreted. In Europe, the same EDI flows go by other names: the ship notice is called DESADV in EDIFACT.
Data mapping and translation
Your ERP does not speak X12: it has its own tables, its own item codes and its own units of measure. Mapping defines how each field of the EDI message corresponds to a field in the ERP. The EDI software then runs the translation in both directions on every transaction.
This is the step that decides the quality of the EDI integration. One mismapped GS1 location code or one badly converted unit of measure is enough to produce a rejected ship notice.
AS2, VAN and API message transport
Once translated, the messages travel over a secure channel: AS2, SFTP or a value-added network (VAN). Some newer platforms also exchange data in JSON or XML through an API. The choice depends mostly on what your partner requires, and our page on EDI messaging protocols compares the options.
The benefits of EDI integration
The first gain is the end of manual entry. Orders, ship notices and invoices move from one system to the next without being retyped, which removes keying errors and frees your team for customer service instead of re-entry.
The second gain is compliance. Large retailers apply penalties when a ship notice arrives late or fails to match the delivery, and an EDI integration sends the right documents at the right time, with exact data from the ERP. Our article on retailer chargebacks walks through the most frequent causes.
Visibility and scalability of integrated EDI
Order statuses, inventory management and invoices are visible in real time inside the ERP, with no separate portals to check. And each new partner is added to the same base mapping: EDI integration keeps up with the growth of the supply chain instead of slowing it down.
In-house or outsourced EDI integration?
An in-house EDI integration calls for a specialist who knows the EDI standards, your ERP’s tables and every partner’s implementation guide. That works in a large company that already has the expertise and a heavy volume of changes.
For most small and mid-sized businesses, outsourcing is safer: an EDI provider takes on the mapping, the testing, the monitoring and the error handling, while your team keeps control of day-to-day operations. At Vantree, that managed EDI automation service includes a Team-Based Support System, where the same agents follow your account from the first call to go-live.
The steps of an EDI integration project
A well-run EDI project always follows the same order, whether you have one trading partner or fifty.
1List your retailers’ EDI requirements
It starts with the list of your partners and their implementation guides: which documents each one requires, how often, under which rules. That list sets the scope of the EDI project.
2Choose an ERP connector or middleware
Depending on your ERP, the integration runs through a native connector built into the software or through middleware, also called an integration platform or EAI, placed between the ERP and the EDI platform. A native connector means fewer systems to maintain.
3Map, then test with each partner
Each document is mapped, then tested until the partner certifies it. Testing with partners often takes longer than the mapping itself, because it runs on their schedule.
4Go live and monitor transactions
After go-live, every transaction is monitored: a rejected file or a missing 997 raises an immediate alert, before your customer ever notices. Exchanges stay encrypted and logged, and Vantree is SOC 2 Type 2 certified.
5EDI integration timeline and cost
The timeline depends mostly on the number of partners, the documents they require and each partner’s availability for testing. Cost follows the same variables, plus transaction volume and the complexity of the ERP. A reliable schedule and a reliable price can both be set once your partner list is known.
EDI integration with SAP, Sage and Dynamics
Every ERP integrates in its own way: SAP, for instance, exchanges data through IDoc or an API, Microsoft Dynamics 365 and Oracle often go through web services, and Sage also accepts flat files. The goal stays the same: the EDI order has to land where your team already works.
Vantree integrates EDI directly into more than 35 ERPs, including SAP Business One, Microsoft Dynamics 365 Business Central, Acumatica, NetSuite, QuickBooks and Sage X3. The full list is on our ERP integrations page.
Several ERPs, one EDI solution
A company running two ERPs, after an acquisition for example, has no need for two EDI platforms. One central EDI solution receives the inbound flows, routes them to the right ERP and sends the outbound flows back to each partner, with the same monitoring across the board. That interoperability also makes it simpler to add a third ERP later.
Integrate EDI with Vantree
Since 1994, Vantree has built EDI integrations out of Montreal for companies in Quebec, the rest of Canada and the United States. Food distributor CTS Foods, for example, automated its trading partner exchanges inside Business Central, and its case study tells the story. Our EDI integration services page details what a managed engagement covers.
Your EDI integration project starts here
Tell us which ERP you run and which retailers require EDI from you, and we will lay out a clear plan.
Talk to an EDI expert →FAQ: EDI integration
EDI integration connects the electronic data interchange platform to your ERP. Purchase orders from your trading partners arrive directly as sales orders. Acknowledgments, ship notices and invoices go back out automatically in the required format. It removes re-keying between EDI and your internal systems, such as the WMS or the accounting software.
EDI is the exchange of standardized documents between two companies. EDI integration is about what happens on your side: the link between those documents and your ERP. You can run EDI without integration, through a Web EDI portal, but the data then has to be copied into your own systems by hand.
The timeline depends on the number of trading partners, the documents each one requires and their availability for certification testing. An integration with a single retailer moves faster than a rollout across dozens of partners. An EDI provider can set a realistic schedule as soon as your partner list and your ERP are known.
Most ERPs on the market support EDI integration, through a native connector, an API or file exchange. Vantree integrates EDI into more than 35 ERPs, including SAP Business One, Microsoft Dynamics 365 Business Central, Acumatica, Sage X3, NetSuite and QuickBooks. For a less common ERP, the mapping relies on its import and export formats.
Not necessarily. An in-house EDI integration calls for rare expertise in EDI standards and in the structure of the ERP. Most small and mid-sized businesses choose an outsourced integration: the EDI provider handles the mapping, the testing, the transmission and the monitoring, while your team stays focused on orders and customers.
APIs keep gaining ground, especially in e-commerce, but most large North American retailers and distributors still require EDI documents in the X12 standard. In practice the two run side by side: a modern integration can exchange EDI with a retailer and use an API with an online sales platform, from the same ERP.
The implementation guide is the document a trading partner publishes to spell out its EDI requirements: required documents, mandatory segments and fields, sending deadlines, shipping labels. Every retailer has its own, even when it uses the X12 standard. It is the basis for the mapping and for certification testing.
Yes, when it runs through an audited provider and encrypted protocols such as AS2 or SFTP, or through a VAN. Vantree is SOC 2 Type 2 certified, an independent audit of its security controls. Transaction monitoring and audit trails also make it possible to trace every document exchanged with your partners.
Talk to an EDI integration specialist
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