What Is an EDI Ordering System?

Historically, EDI software has been designed to improve the lives of large retailers that acquire stock through B2B transactions. EDI ordering systems give power back to the supplier with a centralized hub for processing EDI-based transactions that helps automate beyond just trade with retail partners. 

How Does an EDI Order Management System Work?

An EDI order management system automates the exchange of critical documents like purchase orders (EDI 850), invoices (EDI 810), and shipping notices (EDI 856) between trading partners using standardized formats.

Here’s how it works in practice:

1. Retailer Sends an EDI Order
   The buyer’s system (such as a retailer or distributor) generates an EDI 850 file and transmits it to the supplier.
2. Order Intake and Validation
   The EDI system receives the file, parses it into structured data, and validates fields like SKUs, ship-to addresses, and pricing.
3. ERP and Inventory Sync
   The data is automatically pushed into the supplier’s ERP or order management platform, triggering inventory allocation and fulfillment workflows.
4. Status Updates and Confirmations
   The system can generate EDI 855 (Order Acknowledgement), EDI 856 (Advanced Shipping Notice), and EDI 810 (Invoice) responses—all without manual data entry.

The result? Orders are processed faster, errors are eliminated, and your team doesn’t need to babysit spreadsheets or PDFs.

Why Legacy EDI Ordering Systems Don’t Work For Modern B2B

EDI itself dates back to the 1980s and is widely acknowledged as being somewhat dated. It’s a set of structured documents for transactions like purchase orders, invoices, and shipping notices. This requires meticulous input for every line item and is extremely prone to error, especially at scale. The best solution is typically to implement software to automate these processes. 

For suppliers and manufacturers trading with large retailers, it’s all too common that automating this process is simply inaccessible. Large retailers often enforce EDI in order to trade with them, stating their legacy software is the only way. These systems are outdated, come with enterprise pricing, and can take years to launch. 

Businesses wanting to trade with retailers are left with three scenarios:

1 - They manually manage EDI transactions, having to hire a new employee for every 1-2 new partners. This drastically increases overhead costs and results in endless errors. 

2 - They purchase the EDI software. Each connection is 1000s, if not 10s of thousands of dollars, and can take 6-12 months for every new partner. Meanwhile, their competitors are out-selling them on their e-commerce marketplace, or they adopt both strategies and constantly face stockouts and risk trading relationships. 

3 - They decide to abandon trading with large retailers, focusing only on independent stores and DTC. This leaves them vulnerable to a competitive marketplace and requires massive marketing investments to bring people to their sites. 

Needless to say, EDI systems have not improved the lives of suppliers. Fortunately, there are more modern systems that are trying to shake up the EDI world. 

How Modern Order Management Systems are Enabling EDI 

For businesses considering EDI systems and trading with retail partners, it’s ultimately because they want to sell more product at scale. EDI software doesn’t let you do that. It works in a silo, only automating transactions with specific trading partners.

A modern OMS challenges that by considering your entire order ecosystem.

Order Management Systems are designed to automate end-to-end workflows from wherever orders happen. Instead of piecing together integration tools on top of expensive EDI software, an OMS handles every step. 

A common workflow could look like this:

A few transactions are placed:

1. At 10:01 am, your California-based distributor orders 100 shovels off your native ordering portal 
2. At 10:05 am, 1 shovel is ordered from your Shopify site
3. Rona realizes they’re out of the shovels you supply to them and places an order via EDI at 11:55 am

Without an OMS, your team would have to log into each portal, check inventory in your ERP, and log back into the portals to submit, only to then send through another fulfillment portal. 

It’s tedious, and it’s prone to error and stockout. 

Instead, an OMS manages the flow from channel to ERP to fulfillment, meaning you never have to log into portals to manage day-to-day orders.

Modern EDI Order Management System vs Traditional OMS: Key Differences

Not Every OMS Is The Same

If you do a quick search for order management systems, you’ll probably notice that there are a lot of tools that aren’t really an OMS. 

There’s a handful of OMS-adjacent technologies like ERPs, inventory, and fulfillment software, but these are the tools your OMS should integrate, not replace. 

Alternatively, if you’re working with a consultant, they may have a handful of enterprise solutions that are MACH-compliant and highly reputable among billion-dollar, well-known brands. But if your feeling hindered by EDI software costs and need to optimize for B2B, these systems are going to consume your budget and leave you needing additional workarounds.

How to Know if You Need an EDI Order Management System

Still unsure whether an EDI OMS is right for your business? If any of the following sound familiar, it’s probably time to upgrade your order infrastructure:

1. You receive purchase orders by email, fax, or PDF

2. You're manually entering retailer or marketplace orders into your ERP

3. You struggle to track order status across systems or teams

4. You’re juggling multiple sales channels with disconnected workflows

5. You're required to send or receive EDI documents like 810, 850, 855, or 997

6. Your team spends hours each week managing or cleaning up order data

Choosing the Right EDI Order Management System: What to Look For

Not all EDI solutions are created equal. If you’re evaluating systems, here’s what to prioritize:

• Direct ERP Integration
  Ensure the EDI system connects directly to your ERP, not through middleware. Look for API-based solutions that maintain data integrity.

• Support for All EDI Documents You Need
  Most suppliers start with 850s and 810s—but will you also need 856s, 855s, or 820s? Your EDI OMS should scale with your trading partner requirements.

• Catalog and Pricing Management
  Some platforms go beyond EDI by standardizing SKUs, price lists, and product metadata. That’s essential for multi-channel order accuracy.

• Exception Handling and Visibility
  Choose a system that alerts you when orders fail, SKUs don’t match, or inventory runs short—instead of burying the issue in code.

• Vendor and Retailer Compliance
  Can it support Walmart, Amazon Vendor, Home Depot, LCBO, or independent distributors? Verify partner connectivity upfront.

Modular OMS for EDI and B2B Ordering

A modular OMS is a system that empowers you to scale at your own pace. You’re not stuck waiting 12 months to trade with 1 retail partner, and you’re not forced into a massive suite of tools. 

If you want to optimize for EDI this year and move to automating ecommerce workflows next, a modular system grows with you, not against you. 

OrderEase stands apart from other OMS by providing a modular approach specifically designed for B2B brands. Our system is built to handle the complexities of B2B workflows, including:

1. EDI Software that takes the endless documents and transactions off your team’s plate
2. Multichannel Order Management to automate orders from marketplaces and e-commerce sites
3. A B2B portal with customization for wholesale ordering
4. Automation for orders sent through email attachments like PDFs and CSV file
    

Our team offers a consultative approach to empower your business to adopt only the highest opportunities to automate. We understand that for growing businesses, what matters is a system that helps you automate more EDI transactions without draining your budget or your team. 

For a personalized demo of how EDI order management systems work and how OrderEase can help scale your business, get in touch.