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EDI Transactions: What It Takes To Win

EDI Transactions and Document Types - Corsica Technologies

EDI transactions are the lifeblood of processes like order placement, shipping, receiving, claims processing, and more. Across numerous industries, these transactions keep things moving in a way that no other technology can. In fact, you could say EDI solutions make the world go round.

But what exactly are EDI transactions? Are they different from EDI documents?

How do you keep everything running smoothly?

We’ll answer all these questions and more. Here’s everything you need to know about EDI transactions.

What are EDI transactions?

“Transaction” sounds like a financial exchange. While EDI certainly supports financial processes, the term “EDI transaction” simply refers to the transfer of data between two EDI systems in the form of well-defined electronic documents.

In other words, “EDI transactions” and “EDI documents” are synonymous. Simple enough, right?

Actually, it gets a little more complicated before we can see the full picture. We need to talk about EDI data standards.

EDI transactions in ANSI X12, EDIFACT, and HIPAA - Corsica Technologies

Understanding data standards: ANSI X12 vs. EDIFACT vs. HIPAA

EDI data standards lay the foundation for communication between two EDI systems. These standards define how documents are structured, ensuring that all connected computers are on the same page.

As you can imagine, it’s essential to comply with your chosen data standard. Whether you’re trading with partners who use the same standard—or having documents in your standard mapped to a different standard for a different partner—any documents that aren’t properly structured can cause errors and exceptions. These issues require manual intervention, which defeats the purpose of EDI.

Luckily, a good EDI service provider can implement and maintain your documents at a high standard of reliability. This ensures you can easily do business with the trading partners who matter most.

Learn more: EDI Service Providers – What’s Working and What Isn’t

There are many prominent EDI data standards in use around the globe. However, for our purposes, we’ll talk about the 3 most common standards in North America. Here at Corsica Technologies, our clients typically use one of these standards.

1. ANSI X12 data standard

From finance to insurance, manufacturing to transportation, the X12 standard is a huge player in North American EDI. If you see an EDI transaction that’s identified by 3 digits (850, 856, etc.), that’s an X12 document. In fact, X12 is so prominent, it’s mandated for use in US healthcare by HIPAA laws (see below).

ANSI X12 is also one of the older standards in use. It was created by the American National Standards Institute (ANSI) in 1979. But don’t let the age of X12 age fool you. Countless organizations process billions of documents every day using this standard. It isn’t going anywhere.

2. EDIFACT data standard

Where ANSI X12 is a common standard in North America, EDIFACT is widely used in Europe and the rest of the world. If you see a document identified by 6 letters, all capitalized, that’s an EDIFACT document (for example, ORDERS, which is a purchase order).

3. HIPAA data standard

In the US, HIPAA regulation mandates the structure of EDI documents exchanged between healthcare organizations. Believe it or not, the HIPAA data standard is actually just a set of X12 documents that are relevant in healthcare. However, you may see the term “HIPAA EDI standards,” so this topic is usually treated separately from X12—particularly since HIPAA has its own documents that aren’t typically used in other industries.

Common transactions in ANSI X12 and EDIFACT

Both ANSI X12 and EDIFACT support tons of document types. Each standard has its own naming conventions, but the functions of many documents are identical. Here are some of the most common transactions that Corsica clients use—plus the relevant document code in each standard.

EDI transactions - 9 common documents in ANSI X12 and EDIFACT - Corsica Technologies

Details on common transactions

1. Sales catalog with pricing (X12 832 / EDIFACT PRICAT)

This EDI transaction provides an electronic catalog from a supplier to a buyer, eliminating the need for print catalogs that quickly become outdated.

2. Quote request (X12 840 / EDIFACT REQOTE)

This EDI document allows a buyer to send a quote request to a supplier. It can replace phone communication, saving time and money. It can also replace email-based quote processes—which may not be standardized or efficient.

3. Quote response (X12 843 / EDIFACT QUOTES)

When a supplier responds to a quote request, they’ll use this EDI transaction. It provides all the information the customer needs to decide whether to accept the quote.

4. Purchase order (EDI 850 / EDIFACT ORDERS)

The name says it all. A buyer uses this EDI transaction to place a purchase order with a supplier. Doing so electronically reduces errors associated with human data entry. It also speeds up the process, eliminating the transit time associated with paper documents in the mail.

5. PO acknowledgment (EDI 855 / EDIFACT ORDRSP)

A supplier sends a PO acknowledgment to let a buyer know that they got the order. This EDI transaction eliminates waste and delay due to paper-based processes.

6. PO change request (EDI 860 / EDIFACT ORDCHG)

Sometimes, you don’t get an order right the first time—or your needs may change after the fact. This EDI transaction allows a trading partner to request a change to an existing purchase order through electronic means, eliminating back-and-forth mailings and phone tag.

Learn more: EDI Service Providers – What’s Working and What Isn’t

7. PO change request acknowledgment (EDI 865 / EDIFACT ORDRSP)

This EDI document allows a supplier to acknowledge that they’ve received a change request. Note that in EDIFACT, this document (ORDRSP) is the same as a purchase order acknowledgment.

8. Planning schedule with release (EDI 830 / EDIFACT DELFOR)

This is a powerful document for organizations that follow the Just-in-Time inventory methodology. It allows a buyer (often a manufacturer) to send a list of required materials, specified by time period, to their suppliers. This gives suppliers advance warning of their opportunity to sell materials to the buyer that will fulfill a tight processing schedule.

9. Advance shipment notice or ASN (EDI 856 / EDIFACT DESADV)

This critical EDI transaction notifies a trading partner that a shipment is coming their way. It’s especially important when the product in question has specific handling requirements—like refrigeration—or when the receiving warehouse needs time to make room for the inventory. Learn more here: EDI 856: Getting Your Advance Shipment Notices Right.

Common HIPAA EDI transactions

HIPAA has its own common EDI transactions that follow the ANSI X12 format. Here are the ones that our clients in the healthcare industry use most often.  

1. Benefit enrollment and maintenance (X12 834)

This document is used to enroll people in a healthcare plan. The transaction covers new or updated enrollments, changes to benefits, and removal from enrollment.

2. Eligibility/benefit inquiry (X12 270)

Is a patient eligible for a specific benefit under their plan? This EDI transaction allows hospitals and medical practices to get answers from health insurance providers so they can inform the patient and bill appropriately.

3. Eligibility/benefit response (X12 271)

This EDI document allows a health insurance provider to answer the questions contained in an EDI 270. It gives the hospital or healthcare practitioner a clear picture of what’s covered and what isn’t.

4. Healthcare claim submission (X12 837)

This EDI transaction allows practitioners to submit insurance claims to HMOs, PPOs, Medicaid, and Medicare. It simplifies and standardizes the claims submission process, reducing waste and manual data entry.

5. Claim status request (X12 276)

We all know it can take some time to hear back from an insurance company. This EDI document allows a practitioner to inquire about the status of an insurance claim that they’ve submitted.

6. Claim status notification (X12 277)

When an insurance provider responds to a claim status request, they’ll use an EDI 277. This document updates the practitioner on the status of the claim.

Challenges with EDI transactions

EDI transactions come with lots of complexity. Between document mapping, integration to backend systems, and continually changing requirements from trading partners, it’s easy to get derailed if you’re trying to manage EDI in-house.

Here are some common challenges surrounding EDI transactions—and how to solve them.

1. Not planning today for the EDI transactions you’ll need tomorrow. Perhaps it’s clear what document types you need to support today. But where are you headed in the future? What opportunities do you have to work with lucrative trading partners? What will it take to get you there?

It’s tough to answer these questions if you don’t have career EDI experts on staff. That’s why companies see greater success when they engage a partner to help them win with EDI. Which leads us to our next challenge…

2. Not working with an EDI expert to cover all your required documents. Perhaps it’s clear to internal stakeholders which EDI transactions you need to support. However, it’s critical to get an outside perspective. When it comes to EDI documents, some things aren’t obvious. It’s good to validate your internal perspective—or have it modified—by working with an expert EDI provider (like Corsica).

3. Not accounting for the ongoing support of your EDI transactions. This is the biggest pitfall we see. EDI is not a set-it-and-forget-it technology. Even if your required document types will never change, your integrations and data mapping will change as software systems evolve and trading partners change their requirements. This is the #1 reason you need a robust partner for EDI support services. Bonus points if that partner covers new fields, data mapping, and new trading partners for one predictable monthly price. That’s what we offer here at Corsica.

Of course, these are just a few high-level challenges related to EDI transactions. There’s more to know before you dive into EDI (or improve your current EDI solution). Learn more here: 7 Pitfalls to Avoid on Your EDI Journey

EDI transactions - How to nail them - Corsica Technologies

How to nail your EDI transactions

Why do companies fail with EDI transactions? Because they don’t prepare themselves for success. Luckily, success isn’t as hard as it sounds. Here’s what it takes to nail your EDI transactions.

A) Choose a service partner who knows EDI inside and out

Not all EDI service providers are created equal. EDI is a career, not a skill. You want a partner who eats, breathes, and sleeps EDI.

Here at Corsica, our dedicated EDI team works hand-in-glove with our specialists in IT and cybersecurity. This provides a holistic approach for companies that need technology help in multiple areas.

B) Be wary of EDI product companies when it comes to services

You absolutely need an EDI solution—and the market is full of great EDI software that can meet your needs.

The challenge, though, is to think carefully about the services component.

Not all EDI providers are created equal.

Some companies focus on extracting revenue, not acting like a true partner.

Learn more: EDI Service Providers – What’s Working and What Isn’t

Many EDI product companies focus primarily on the implementation. Their goal is to sell their product, stand it up, and move on to the next sale. Their services business primarily focuses on their biggest customers—because that’s where the money is.

Unfortunately, this isn’t great for the rest of us.

Midmarket companies often do better with a dedicated service provider. Here at Corsica, we bring deep career expertise in EDI to every client—and that expertise is backed by the robust service delivery capabilities of a world-class MSP (managed IT services provider). It’s tough to find this level of EDI service elsewhere at a price point that works for the midmarket.

C) Demand unlimited services for one predictable monthly price

Some EDI service providers take a nickel-and-dime approach to billing.

Need to update some mapping? That’ll be an SOW.

Need to add a trading partner? That’s another SOW.

For really complex projects, this is unavoidable. But for run-of-the-mill EDI updates and support, you shouldn’t have to pay for every little thing. It’s much simpler to find a partner who offers unlimited services for one predictable monthly price. That’s our approach here at Corsica.

D) Look for a partner with an approachable, “can-do” attitude

No one wants to work with difficult people. If you need help with your EDI transactions, your service provider should have a “can-do” attitude.

E) Plan for the big picture (and account for your larger EDI opportunity)

Yes, you have certain EDI requirements today, which means you need to support certain transactions. But how big is your real EDI opportunity? Are there ideal-fit trading partners that you don’t even know about? What would it look like to build what you need today—while also planning for the future?

Corsica provides great insight here. With deep expertise in EDI, we often spot opportunities that weren’t on a client’s radar. We can also help you cover the transactions you need right now while laying the groundwork for future growth. It’s a smart way to maximize the value of your EDI investment.

Moving forward: Getting reliable EDI transactions

No one wants an EDI solution that goes down at peak processing time. Get the expert help and reliability you need with a proven EDI service provider. Here at Corsica Technologies, we combine C-level EDI consulting with hands-on support and management from career experts. Whether you already use EDI or you’re just getting started, let’s make your transactions work for you—day in and day out.

Learn more: EDI 101: Your Guide to EDI Payments, Documents, Integrations and More

Ready to move forward with EDI?

Reach out to schedule a consultation with our EDI specialists.

George Anderson
George Anderson is a blogger and trade journalist in IT and technology. Covering topics from IT to ecommerce to digital transformation, his work has appeared in numerous outlets around the internet. He loves writing on complex subjects in plain language to help companies succeed with technology.

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