Your largest customer sends orders by EDI, and they flow into the ERP without any manual work. Your other customers order by email, by PDF from their purchasing system, by photo of a delivery note or in free text, and inside sales retypes all of it. The short answer: an EDI order is the right solution for partners with a fixed connection. For all other orders, AI closes the gap without your customers having to change anything.

Key takeaways

• EDI (Electronic Data Interchange) transmits orders in a fixed format directly from system to system, in trade usually as EDIFACT or EANCOM.

• An EDI connection pays off for partners with high, regular order volume. Both sides have to set it up and maintain it.

• Customers without EDI, such as smaller businesses, typically order by email, PDF or phone. EDI does not cover these orders.

• AI reads email orders, matches line items to the item master and prepares the order for the ERP. Your team reviews before booking.

• EDI and AI complement each other: EDI for the fixed large accounts, AI for the rest of the inbox.

What is EDI?

EDI (Electronic Data Interchange) is the electronic exchange of structured business documents between the IT systems of two companies, without anyone retyping them. Orders, order confirmations, delivery notices and invoices are transmitted in an agreed standard and processed automatically. In European trade, UN/EDIFACT is widespread. Sender and recipient exchange the data in a standardized format, so the IT systems on both sides process it in their ERP systems without manual intervention.

A commonly used part of it is EANCOM. According to GS1 Germany, EANCOM is “a subset of the UN/EDIFACT standard,” originally developed for the consumer goods industry and now used across industries. The order is called ORDERS, the delivery notice DESADV and the invoice INVOIC (GS1 Germany: EANCOM).

How does an EDI order work?

In an EDI order, the customer's purchasing system generates an ORDERS message and transmits it to the supplier, and the supplier's system automatically creates a sales order from it. This requires both sides to use the same item and partner numbers, or to have them stored in the mapping.

A typical flow looks like this:

1. Order (ORDERS): The customer triggers an order in their ERP, which is sent as an EDI message.

2. Transmission: The message travels over a channel such as AS2, OFTP2 or SFTP, either directly or through an EDI service provider.

3. Conversion: A converter translates the message into your ERP's format, for SAP for example into an IDoc.

4. Order creation: The ERP creates the sales order. Mapping errors end up in an error list.

5. Feedback: Depending on the agreement, an order confirmation (ORDRSP), a delivery notice (DESADV) and an invoice (INVOIC) follow.

What does an EDI connection require, and what does it cost?

An EDI connection needs three things: an agreed standard with the partner, a transmission channel and a mapping between the message and the ERP. Costs depend on whether you run your own converter or use an EDI service provider, how many partners and message types you connect, and how much has to be customized in the ERP.

There are no reliable flat prices, because every connection is partner-specific. Plan for these cost drivers:

• Setup per partner: Agreeing on the message version, test messages, mapping of item and partner numbers.

• Ongoing operation: Service provider fees or maintenance of your own converter, monitoring of error lists.

• Master data maintenance: When item numbers change, the mapping has to be updated.

For smaller partners, many EDI service providers offer web EDI: the customer enters the order in a web portal, and it arrives at the supplier as an EDI message. This only works if the customer actually uses the portal.

Why do so many orders still arrive by email?

Because EDI only pays off when both sides regularly exchange many orders. For a trade business that orders a few times a month, an EDI connection is too much effort. They write an email, send a PDF or call. In technical distribution, this is typically a large share of incoming orders.

Then there are orders that are hard to standardize: call-offs from a framework agreement with free text, project orders that refer to a quote, orders that use the customer's own descriptions instead of your item numbers. These are exactly the orders that take up most of inside sales' time.

Example: The same order by EDI and by email

The difference becomes clear when you see the same order in both forms. The EDI message is unambiguous for machines, the email for people.

Example (simplified EANCOM ORDERS message, fictitious numbers), segment by segment:

Example (the same order as an email):

Hi all, please deliver to the Lindenweg job site by Thursday:

• 20 x pipe clamp 1 inch with insert

• 10 x ball valve 1 inch with wing handle, as in the quote from Oct 12

Thanks, T. Weber

The EDI message contains unambiguous item numbers (here in GTIN format), quantities and the buyer's partner number. The email contains the same information, but as a description, with the delivery address in the text and a reference to an earlier quote. Without AI, someone in inside sales has to look up every line in the item master.

EDI order, web EDI or AI: the comparison

EDI, web EDI and AI-based order entry pursue the same goal, no retyping, with different prerequisites. The table shows which route fits which customers.

When is EDI the better choice than AI?

EDI is the better choice when a partner sends many orders in a consistent structure and both sides want to run the connection. Then orders go through without a review step, order confirmation and delivery notice can be automated at the same time, and some large customers require an EDI connection anyway.

AI does not replace EDI. AI-based capture works with probabilities and therefore needs approval by your team. For a partner that sends structured messages every day, that would be an unnecessary step. Conversely, EDI does not pay off for customers who only order occasionally. The sensible split is usually: EDI for the fixed large accounts, AI for everything that arrives by email.

How does Mercura complement EDI for orders by email?

Mercura, an AI software for quote and order automation in technical sales, takes over the orders that do not arrive by EDI. Mercura does not process EDI messages itself; they continue to run through your existing EDI route. Mercura picks up the email orders from the shared inbox, forwards them to the responsible branch or order processor, matches customer descriptions and old item numbers, and adds surcharge lines such as freight and packaging.

After approval by your team, Mercura books the order into the ERP, for example into SAP S/4HANA, SAP ECC or SAP Business One, Microsoft Dynamics 365, Salesforce, proALPHA or UniTrade. For SAP, a real-time connection via OData is possible, or handover as an IDoc file. Other systems are connected via an API or SFTP. Mercura monitors the exports. The ERP remains the leading system, and pricing and calculation stay there.

Uncertain line items are flagged, never guessed. The connection runs only via routes your IT approves. Mercura is certified to ISO/IEC 27001 and hosted in Europe. A technical test with your own orders is usually possible within two business days.

Bring a real order: in 30 minutes we show you how Mercura handles it in your process, from the shared inbox to the order in the ERP. Book a call

Conclusion

For orders from large accounts with a fixed connection, EDI is a reliable route into the ERP, with no review step and automatic feedback. For the many customers who order by email, PDF or photo, EDI is too much effort. There, AI-based order entry closes the gap without your customers having to change anything. Many technical distributors are well positioned with a combination of both: EDI for the fixed partners, AI for the inbox.

Further reading: Automating order entry, OCR or AI?, SAP order entry with AI, Integrations, Solutions for distributors.

Further reading

• Order processing: emailed orders into your ERP automatically

• OCR or AI? Automatically Capture Orders and Requests

• Quote-to-Order Automation: From Quote to Order Without the Gaps

• Customer story: Sanitär-Heinze (plumbing and HVAC wholesale)

• Mercura vs. Esker: Order-to-Cash or Technical Sales?

• Mercura vs. Conexiom: Quotes, Orders and Supplier RFQs

Frequently asked questions

What is EDI?

EDI (Electronic Data Interchange) is the automatic exchange of structured business documents such as orders, delivery notices and invoices between the IT systems of two companies. Common standards are UN/EDIFACT and its subset EANCOM.

What is an EDI order?

An EDI order is an order that is transmitted as a structured message, such as an EANCOM ORDERS, directly from the customer's system to the supplier's system. There it is turned into a sales order without retyping.

What does an EDI connection cost?

That depends on the model: your own converter or an EDI service provider, the number of partners and message types, and customizations in the ERP. Get quotes from EDI service providers and calculate setup per partner and ongoing fees separately.

What is an EDI interface?

An EDI interface connects your ERP to the EDI transmission channel. It translates incoming messages into the ERP format, for SAP for example into IDocs, and outgoing documents into the agreed EDI standard.

What is web EDI?

Web EDI is a web portal in which customers without their own EDI system enter orders. They arrive at the supplier as an EDI message. This only works if the customer actually uses the portal.

Do I need EDI if I use AI for order entry?

For large accounts with an EDI requirement, yes, because EDI runs there without a review step. AI complements EDI for orders by email, PDF and photo. Both routes lead into the same ERP.