Today, a majority of the data in commercial paper documents is generated from existing computer applications. These paper documents are printed and copied before the information they contain is finally communicated by mail or fax. The business partner in turn, re-keys all this information into another computer application for further processing. An increasing number of companies have found the above process extremely slow, costly and unreliable. The need for a faster, cheaper and more accurate solution for exchanging commercial data has become a significant priority for many companies and organizations.

EDI or Electronic Data Interchange can be conceptualized as paperless trading. A common and useful definition for EDI is:

"the transfer of structured data, by agreed message standards, from one computer application to another by electronic means and with a minimum of human intervention. "

The structuring of data by agreed message standards implies that the data or information to be exchanged is recognizable, both in content, meaning, and format, allowing it to be processed automatically and unambiguously by computers. Two companies deciding to implement EDI are by deEmition agreeing on the type of data they will exchange, and how the data will be presented. The implementation of EDI demands a much greater degree of cooperation, collaboration and a sharing of information between business partners, effectively building trading partner relationships.

EDI provides trading partners with an efficient business tool for the automatic transmission of commercial data from one computer application directly to another. Companies do not E; need to worry about different incompatible computer systems. Through the use of EDI E message standards like EANCOM, data may be communicated quickly, efficiently and I accurately irrespective of users' internal hardware and software types.