The information doesn't have to be converted from one file type to another or retyped manually. EDI systems are often used to connect a single large company to numerous suppliers and customers. These systems are usually designed to the specifications of the large company, and often meet specific, proprietary requirements. This means that companies sharing an EDI system have to use the same software or have custom modules written to let their preferred ERP software communicate with the EDI system. With no expensive proprietary software to pay for, almost any company can join in an XML-based online exchange.
Users log into an information exchange and submit orders or inventory notes in XML format.
Relying on standardized XML DTDs and schema, information can be read by any user of the exchange. Once a buyer and seller are brought together, negotiations to complete the deal can be conducted over a secure connection. EDI relies on third-party networks to bring together companies' communications. The process can take from several hours to several days. XML gets rid of the EDI middleman.