Electronic Data Interchange (EDI) is a computer-to-computer communication method used by businesses to exchange electronic documents in a standardized format. EDI allows businesses to automate the exchange of information, such as purchase orders, invoices, and shipment notices, without the need for manual data entry or paper-based documents.

EDI uses a standardized format for electronic documents, which enables different computer systems to communicate with each other seamlessly. This format typically includes a set of data elements and codes that represent specific pieces of information, such as product codes, shipping addresses, and order quantities.

EDI can help businesses to streamline their operations and reduce costs by eliminating manual data entry and reducing errors. It also enables faster processing times and increased accuracy, which can help businesses to improve their supply chain management and customer service.

EDI is commonly used in industries such as manufacturing, retail, and healthcare, where the exchange of electronic documents is critical to business operations. While EDI was traditionally transmitted over private networks, it can now be transmitted over the internet using secure protocols and encryption.