Different Types of Electronic Data Interchange (EDI) Explained

Electronic Data Interchange (EDI) is an indispensable technology for modern businesses looking to automate and streamline the exchange of business documents. By replacing manual workflows with digital communication, EDI enables the seamless transmission of invoices, purchase orders, advance shipping notices (ASN), and other standard format documents between trading partners and other business partners, across an unlimited number of industries. This not only reduces errors and operational delays but also ensures compliance, improves supply chain visibility, and provides organizations with a competitive advantage.

However, not all businesses are the same—and neither are their EDI needs. Some organizations require full automation with minimal internal oversight, while others prefer more control and flexibility. Fortunately, there are several types of EDI solutions designed to match different business processes, technical capacities, and levels of desired involvement.

In this blog, we’ll explore four main categories of EDI solutions—Self-Managed, Fully Managed, Partially Managed, and Pseudo-EDI—and help you determine which one aligns best with your business.

Table of Contents

• Types of EDI Solutions
• Self-Managed EDI (On-Premise or Cloud Based)
• Fully Managed EDI Solutions
• Partially Managed EDI
• Pseudo-EDI (Manual Processes)
• Common EDI Communication Methods
• Why Choosing the Right EDI Type Matters

Types of EDI Solutions

The EDI landscape offers a spectrum of solutions based on the level of automation, integration, and internal responsibility. The four main types are:

• Self-Managed EDI

• Fully Managed EDI

• Partially Managed EDI

• Pseudo-EDI

Each of these solutions provides distinct benefits and trade-offs. And understanding how they differ is key to selecting the right path for your EDI journey.

Self-Managed EDI (On-Premise or Cloud Based)

Self-managed EDI is a hands-on approach in which the business owns and operates its EDI infrastructure. This includes managing system integration, EDI mapping of transaction sets, configuration, monitoring, and maintenance. And these solutions may be deployed on-premises or hosted in the cloud, but the common thread is that your internal team handles all aspects of setup, maintenance and ongoing operation.

Pros:

• Full Control: You have complete authority over your data, integrations, and workflows.

• Customization: Tailor the EDI system to match specific business needs or legacy applications.

Cons:

• Resource-Intensive: Requires significant IT knowledge, staff, and infrastructure investment.

• High Maintenance: Businesses are responsible for updates, partner onboarding, compliance changes, and system troubleshooting.

Communication Methods:

Self-managed EDI solutions typically use communication protocols such as AS2 (point-to-point), FTP, or SFTP, depending on partner requirements and security considerations.

This solution is best suited for large enterprises or companies with robust IT departments and a high volume of transactions requiring tight integration with internal systems.

💡 GraceBlood also offers Professional Services to support self managed EDI environments, ensuring smooth operations, best practices for ongoing success, and staff augmentation in times of high demand.

Fully Managed EDI Solutions

Fully managed EDI offers a hands-off experience, where a third-party provider like GraceBlood handles everything—from initial setup to ongoing support and monitoring. Moreover, businesses don’t need to worry about infrastructure, partner onboarding, compliance changes, or exception handling; the provider ensures the EDI process runs smoothly at all times.

Pros:

• Minimal Effort: The service provider handles all aspects of EDI, reducing internal workload.

• Scalable: Easily add new trading partners or expand into new markets without increasing technical burden.

• Expert Support: Continuous monitoring and rapid resolution of issues by experienced professionals.

Cons:

• Less Control: As this is outsourcing a critical part of your business, your must rely on the provider to make changes or troubleshoot issues.

• Monthly Costs: Managed services are often priced based on data volume or number of trading partners.

Communication Methods:

Fully managed services support various protocols including AS2, FTP, SFTP, VAN, and API, depending on partner capabilities and security needs.

💡 Explore GraceBlood’s Fully Managed EDI Services to automate your operations without the complexity.

This is ideal for businesses that lack the in-house expertise or resources to manage EDI but still require a robust, scalable, and secure solution.

Partially Managed EDI

Partially managed EDI is a hybrid approach where a provider helps with initial setup, access and integration (if that functionality is offered), but the business takes on responsibility for daily operations such as monitoring, exception management, and partner communication. Moreover, it strikes a balance between control and support. Many EDI providers today claim to be fully-managed when in fact they are really Partially Managed.

Pros:

• Shared Responsibility: You get expert help during implementation while retaining operational control.

• More Flexibility: Easier to customize or pivot without going through a provider for every change.

Cons:

• Ongoing Effort Required: Your team must actively monitor transactions, resolve errors, and ensure system updates.

• Inconsistent Results: Without dedicated oversight, issues can be missed or delayed in resolution.

Communication Methods:

Common connectivity methods include AS2, FTP, or VAN, depending on the provider and your business’s infrastructure.

This model is suitable for mid-sized businesses with some internal IT capacity but not enough to build and maintain a fully self-managed solution.

💡 GraceBlood also offers Professional Services to support partially managed EDI environments, ensuring a smooth handoff and best practices for ongoing success.

Pseudo-EDI (Manual Processes)

Pseudo-EDI refers to non-automated processes that mimic EDI by manually managing document types like purchase orders or invoices—often through spreadsheets or simple web portals. These documents may then be emailed or uploaded to trading partner systems, sometimes by the provider acting as an intermediary. Honestly, this approach is smoke and mirrors hiding the fact that you’re still using paper based documents. You’re merely using EDI to meet a mandate and not realizing any benefits of EDI. For example, web EDI would fall into this category.

Pros:

• Low Cost: No need for EDI software, infrastructure, or technical staff.

• Simple Setup: Little to no onboarding time required.

Cons:

• Not True EDI: Lack of automation, integration of business documents, and compliance with EDI standards.

• Often Not Integrated: Most web-based portals require data entry and simply translate EDI format into human readable. The data is not imported to your ERP or back-end business system.

• Scalability Issues: Not suitable for growing businesses or high business transaction volumes.

Communication Methods:

Often uses email, manual uploads, or basic web portals for file exchange.

Pseudo-EDI is typically used by very small businesses or those with infrequent transactions, often as a temporary solution before transitioning to true EDI integration. This biggest stumbling block we see is that quickly growing organizations typically do not have an ERP system capable of EDI integration. Therefore, this should be your first priority when thinking about implementing EDI with a fully integrated solution.

Common EDI Communication Methods

Regardless of which EDI model a business chooses, several communication methods are used to transmit EDI documents securely and reliably:

AS2 (Applicability Statement 2)

A widely used, secure internet-based protocol sometimes referred to as direct EDI, offering real-time document delivery and encryption. Ideal for high-security industries like healthcare (HIPAA), retail, and e-commerce.

FTP/SFTP

Traditional file transfer protocols. While both are direct connections, FTP is basic and unencrypted, while SFTP uses SSH for secure, encrypted communication. Common in batch EDI transactions.

VAN (Value-Added Network)

A third-party EDI network that routes electronic documents through secure mailboxes, providing additional features like document validation, logging, and delivery status. Best for organizations working with multiple trading partners and usually mandated by those trading partners.

💡 GraceBlood’s EDI VAN offers secure, scalable EDI message exchange for businesses working with multiple trading partners.

API (Application Programming Interface)

Enables real-time data exchange between systems and is often used in modern e-commerce platforms or ERP integration scenarios.

Why Choosing the Right EDI Type Matters

Selecting the appropriate EDI solution can have a direct impact on your operational efficiency, customer satisfaction, and ROI. Each model—from self-managed to pseudo-EDI—has unique advantages and limitations that must be weighed against your organization’s:

• Size and resources

• Technical expertise

• Transaction volume

• Partner requirements

• Integration needs

Let’s recap:

GraceBlood supports businesses at every point along this spectrum, offering tailored EDI Implementation, transparent pricing and integration strategies that grow with your organization. Whether you’re looking to fully outsource EDI operations or want help launching a hybrid solution, we have the expertise and tools to make it happen.

Understanding Your Options

Electronic Data Interchange (EDI) continues to transform how businesses interact with their trading partners by improving accuracy, speed, and compliance. But not every EDI solution fits every business. The right approach depends on your current infrastructure, technical capabilities, and long-term goals.

From low-cost pseudo-EDI options to fully automated managed services, companies have more choices than ever. Understanding these options—and choosing the one that aligns with your needs—can help you maximize your EDI investment and scale with confidence.

💡 Learn More About Seamless Data Integration with GraceBlood’s VelociLink™

GraceBlood’s VelociLink™ platform and fully managed services offer a seamless, secure way to integrate EDI with your internal systems and trading partners—backed by decades of industry experience.

👉 Learn More About Seamless EDI Data Integration with GraceBlood’s VelociLink™