EDI - Electronic Data Interchange.
EDI uses defined published standards to transfer information from one computer system to another. By using standards, each company knows the format of the data being exchanged. Knowing the format companies can create generic maps and interface programs to import the trading partners data into their enterprise system.
For outbound data, each trading partner extracts their information from their enterprise system and transforms the data to the published standard for transmission to their trading partners.
For inbound data, you will receive your trading partners data in the published standard format and transform it for importing into your enterprise system.
There are several different secure methods for exchanging data with your trading partners. Some are point to point where you handle the communications with each trading partner or you can use a 3rd partner vendor (VAN - Value Added Network) to limit your communications to one point and your trading partners communicate with the vendor.