EDI in SAP: A Complete Overview

SAP EDI is one of the great ways to exchange business information and records in a standard electronic manner. It does not require any special functionality, or arrangement, or business partner can able to share technical and product details efficiently. EDI includes mostly the items that are fed up using paper-based correspondence, such as placing orders and carrying out financial transactions with suppliers.

EDI in SAP

What is EDI in SAP?

SAP EDI stands for Electronic data interchange. SAP EDI is an one of the best electronic technology which is mainly used for business transactions of data or any other things within different applications of a system with a secure connection. It is considered as an one of the best industry recognized standard method which represents documents in electronic form. It is highly functionable only if multiple corporations are associated with a single parent company. In order to make the entire process automated SAP aids EDI operations through IDocs (Integrated Documents). The fundamental principle of EDI is to convert the data from one format to another format. In SAP we can able to transmit documents by utilizing EDI between SAP systems and other explicit systems. Here explicit system will be any vendor or an stakeholder.

SAP EDI Working

There are some steps which makes the process of exchanging of information between a sender and receiver. It is also important to have end to end applications at both the sender and receiver. It transform and process information electronically.

• First, the sender, which is either a business partner or any entity, will send the message and the receiver who is another entity or person will be able to deliver the message.
• It is important that both sender and receiver should have application programs in order to receive electronic information like SAP for creating and processing information directly.
• Here the system should be in a standard format which can be comprehended at transmitter and receiver which use application programs. It can able to achieve by ANSI.
• After that sender will send the message by extracting the information and transports the message through translator system.
• If the message is in a standard format then it is transferred to any destination translator through communication medium like WAN, VPN.
• Network then link the business communications which should be reliable and secure.
• On the receiver end, it will translates the standard EDIFACT message into the system in an understandable format which is standardized and it is easier for application program to understand.
• At the receiver end, the translated message is then transferred and the incoming documents are processed by conducting posting in ERP system.
• In this manner, the generated message sent by the application program is received at the receiver end and gets interpreted by receivers application programs.

Inbound and Outbound Processes in SAP

Processes in SAP are in various forms but there are two important forms in SAP which is mentioned below:

Inbound processes in SAP –

SAP users use this kind of process for to receive important information from any external source or vendor. It includes production EDI documents receipts and then transformed into standard documents. Then the EDI formatted document is then transformed into application document that the SAP systems processes after receiving it.

1. Inbound Data Processing:
   • Data Reception: Inbound processes involve receiving data from external sources, such as suppliers, customers, or other systems.
   • Data Validation: The received data is validated to ensure it complies with the defined data formats, structures, and business rules.
2. IDoc (Intermediate Document) Processing:
   • IDoc Creation: Inbound processes often involve the creation of IDocs, which are standardized SAP documents used for data exchange between systems.
   • IDoc Inbound Processing: Once an IDoc is created, it goes through inbound processing, where the data is parsed, and relevant information is updated in the SAP system.
3. Inbound Integration with SAP Modules:
   • Integration with SAP Modules: Inbound data is integrated into various SAP modules based on its nature (e.g., Materials Management, Sales and Distribution, Finance).
   • Business Logic Execution: SAP executes specific business logic to process the inbound data and update the relevant modules.
4. Inbound Communication:
   • Communication Methods: Inbound processes may involve various communication methods such as SAP RFC (Remote Function Call), SAP BAPI (Business Application Programming Interface), or web services.
   • Integration with External Systems: SAP systems receive data from external systems through these communication methods.

Outbound processes in SAP –

In Outbound process systems SAP users use this process to send information or messages from SAP system to any external system or an user, vendor. It includes production of application format documents then it is transformed into standard record. It also includes conversion of IDocs into EDI standard document format then it is transferred to any of the recipient. Recipient responds back with a transmission to the sending system.

1. Outbound Data Processing:
   • Data Extraction: Outbound processes involve extracting data from SAP modules or databases for transmission to external systems or partners.
   • Data Transformation: The extracted data may undergo transformation to meet the required format or standards for outbound communication.
2. IDoc Processing for Outbound Data:
   • IDoc Generation: In the case of outbound processes, SAP generates IDocs that contain the relevant data for outbound transmission.
   • IDoc Outbound Processing: The generated IDocs are processed for outbound communication, and the data is transmitted to the target systems.
3. Outbound Communication:
   • Communication Methods: Outbound processes use communication methods like SAP RFC, SAP BAPI, or other protocols to transmit data to external systems.
   • Integration with External Partners: SAP systems send data to external systems, customers, or vendors through these communication methods.
4. Integration with External Systems:
   • Integration with Non-SAP Systems: Outbound processes are crucial for integrating SAP with non-SAP systems, ensuring seamless communication and data exchange.
   • Data Synchronization: The outbound data may include updates, changes, or new information that needs to be synchronized with external systems.

SAP EDI Architecture

SAP EDI architecture consists of three main aspects as mentioned below. These includes:

1. EDI Enabled applications – It automates communications and transactions between systems for EDI order processing.
2. IDocs – It is an open interface having IDoc types. It has some functional modules which is capable enough to structure the app interface.
3. EDI subsystem – EDI subsystem is responsible for to convert IDoc types into EDI messages formats and vice versa.

EDI Architechture in SAP

Advantages of SAP EDI

1. SAP EDI is recognized as reducing lot of paperwork and expense of processing and storing of data. Nowadays we are representing data in an electronic formats.
2. It provides more reliable processing of cycle time.
3. EDI works are automated that means no continuous human interventions is needed and it helps to complete all the business tasks more efficiently.
4. EDI also reduces errors in the data entry part. It is also helpful for understanding inventory control by reducing errors and transaction costs etc.
5. It is perfect technology because it does faster actions in delivery of data with real time transferring of documents.

Conclusion

SAP EDI (Electronic Data Interchange) stands as a transformative solution that has revolutionized the way businesses exchange information and conduct transactions. As organizations continue to navigate the complex landscape of modern commerce, SAP EDI provides a robust framework for seamless, automated communication between trading partners. Its ability to enhance efficiency, reduce errors, and accelerate business processes positions it as a vital tool for companies striving to stay competitive in today’s dynamic market.