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Pros & Cons of EDI Types for Your Business

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Understanding the Types of EDI

Understanding Formats and Communication Methods

Most EDI software is custom-built, but standardized types may be a better fit—saving costs and speeding transactions. EDI enables automated exchange of documents like purchase orders, invoices, and shipping notices, with different types varying by communication method and data format to match industry and partner needs.

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EDI by Communication Method

EDI systems enable businesses to build reliable connections with partners

Here’s an overview of the most common modern EDI methods, their pros and cons, and the best scenarios for using each.

1. Direct EDI (Point-to-Point)

Direct EDI connects two trading partners directly, using secure protocols such as AS2, SFTP, or FTPS.

Example: A large retailer like Walmart exchanges purchase orders, invoices, and shipping notices directly with suppliers.

Pros:

  • Full control over data flow and security
  • Faster exchange without intermediaries
  • No VAN fees

Cons:

  • Higher IT setup and maintenance needs
  • Custom connection required for each partner
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EDI via VAN Image

2. EDI via VAN (Value-Added Network)

A VAN acts as a secure middleman between you and trading partners, routing, storing, and delivering EDI messages.

Example: A manufacturer uses a VAN to communicate with dozens of partners without direct connections.

Pros:

  • Simplifies multi-partner communication
  • Tracks and audits messages
  • Supports protocol translation

Cons:

  • Monthly or per-document costs
  • Less control over delivery speed

3. Web EDI

Web EDI uses a browser-based portal to send and receive EDI documents without full system integration.

Example: A small supplier logs into a retailer’s portal to submit invoices or confirm purchase orders.

Pros:

  • Easy setup, no software install
  • Ideal for small to mid-sized businesses
  • Accessible anywhere online

Cons:

  • Manual data entry increases error risk
  • Limited automation
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Mobile Image

4. Mobile EDI

Mobile EDI enables EDI document access and updates via mobile apps — perfect for on-the-go use.

Example: A logistics manager views and confirms EDI 856 shipping notices from the field.

Pros:

  • Access from smartphones/tablets
  • Real-time alerts and updates
  • Great for mobile teams

Cons:

  • Less functionality than desktop EDI
  • Potential device security risks

5. Cloud-Based EDI (SaaS / Hosted EDI)

Cloud EDI is a subscription service where the provider hosts the infrastructure, integrations, and compliance tools.

Example: An e-commerce brand integrates its ERP or Shopify store with a cloud EDI platform to send EDI 850 and 810 documents automatically.

Pros:

  • No in-house EDI expertise required
  • Reduced IT workload
  • Fast partner onboarding

Cons:

  • Higher long-term costs
  • Less direct process control
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Outsourcing EDI Image

6. EDI Outsourcing (Managed EDI Services)

With managed EDI, all operations — setup, mapping, onboarding, monitoring — are handled by a third-party provider.

Example: A manufacturer outsources its EDI processes to a specialist who manages X12/EDIFACT formats and retailer requirements.

Pros:

  • No in-house EDI expertise required
  • Reduced IT workload
  • Fast partner onboarding

Cons:

  • Higher long-term costs
  • Less direct process control
Type Delivery Model User Level Best For
Direct EDI Point-to-point Advanced IT teams High-volume large enterprises
EDI via VAN Through 3rd-party hub All business sizes Multi-partner environments
Web EDI Browser-based Entry-level users SMEs and suppliers
Mobile EDI App-based On-the-go professionals Logistics, field staff
Cloud-based EDI Hosted (SaaS) All levels Growing businesses & integrations
EDI Outsourcing Fully managed Non-technical businesses Companies lacking in-house support
Choosing the Right Type of EDI

Factors to Consider When Selecting Your EDI Setup

The best EDI type depends on your transaction volume, partner requirements, budget, and technical resources. Direct EDI offers control, VANs simplify multi-partner setups, Web/Mobile EDI suit smaller operations, Cloud EDI provides scalability, and Managed EDI removes technical burdens entirely.

Integration

Do you need to integrate with your ERP, CRM, or warehouse system?

Cloud-based EDI Direct EDI Managed EDI
Budget

Do you prefer low upfront cost or long-term control over recurring fees?

Web EDI Direct EDI
Volume

How many EDI transactions do you handle per day/week/month?

Direct EDI Cloud-based EDI
Partner Network

Do you work with a few or many trading partners with varied tech capabilities?

Cloud-based EDI Managed EDI
Flexibility

Do you need EDI access from any location, or mobile responsiveness?

Web EDI Mobile EDI Cloud-based EDI
Security & Compliance

Do you need secure, encrypted data transmission with audit logs?

Direct EDI Cloud-based EDI VAN
How We Can Help?

EDI Generator is a cloud-based EDI service that enables the EDI file processing and exchange of EDI documents with trading partners using AS2.

We provide a web-based platform to translate, validate and transfer EDI files via AS2, and support for any EDI definition and any EDI partner over X12. You can read received EDIs like purchase orders and load tenders in human-friendly formats, as well as generate EDIs like PO acknowledgements, shipment notices, invoices, shipment statuses and send them over AS2.

Pre-built EDI definitions
Simple, feature-rich web user interface
Any definition, any partner over X12
No software to install or maintain
Access any where from web browser
Optimize cost. Pay for what you use
No need of extensive EDI knowledge
30-day trial without conditions or billing
Hassle free and simple set up
How it works

A complete solution for EDI file creation to file transfer via AS2

We offer comprehensive suite of AS2 EDI products; the MFT Gateway, which handles EDI transmissions over AS2 and SFTP protocols, and the EDI Generator, which handles EDI content.

MFT Gateway can transmit literally anything (even a video clip or a regulatory submission), and EDI Generator can process virtually any EDI document (as long as the specification or schema is available)—even including generic documents that are originating or being exchanged outside of MFT Gateway. But of course, the real power comes when the two platforms operate in unison.

Purchase Order list
PO print view
PO Ack generation
PO Ack list
ASN print view
Invoice generation

Frequently Asked Questions

The most common types of EDI are Direct EDI (Point-to-Point) – direct, secure partner connections, EDI via VAN – uses a third-party Value-Added Network, Web EDI – browser-based EDI portals, Mobile EDI – EDI via mobile apps, Cloud-Based EDI – hosted SaaS platforms, EDI Outsourcing – fully managed by an external provider

The right EDI type depends on Transaction volume – large volumes may require direct or cloud EDI, Partner requirements – some trading partners mandate specific protocols like AS2, Budget and resources – small businesses may prefer Web or Mobile EDI, while enterprises benefit from managed or cloud EDI

Direct EDI connects you straight to your partner with secure protocols (e.g., AS2, SFTP), giving more control but requiring setup for each connection, EDI via VAN routes documents through a provider, simplifying multi-partner communication but adding ongoing fees.

Popular EDI document standards include ANSI X12 – widely used in North America, EDIFACT – global standard, common in Europe and Asia, TRADACOMS – used in UK retail, UBL (Universal Business Language) – XML-based, used in e-commerce The format you use depends on your industry and trading partners.

Yes. Modern cloud-based EDI and managed EDI services often integrate directly with ERP systems (e.g., SAP, Oracle, NetSuite), WMS, and accounting software, automating order-to-cash or procure-to-pay workflows.

Web EDI is secure if the provider uses encrypted connections (HTTPS) and proper authentication. However, since it involves manual data entry, the risk of human error remains higher compared to automated EDI integrations.
Cloud EDI Made Simple

Unlock the Benefits of our AS2 EDI Solutions to streamline your entire file exchange process

EDI Generator simplifies your workflow by managing EDI file processing and AS2 transmission—all without multiple software installations. Request a demo and we ll walk you through how it can empower your business to take full control of your EDI.

Live walkthrough of all platform features for smooth EDI integration.
Overview of supported EDI formats and communication protocols.
Real-time demonstration of EDI file processing and secure partner communication.
Direct Q&A session to address your needs and explore customization options for your workflows.
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