The acronym EDI stands for Electronic Data Interchange. It refers to the electronic communication of business documents, such as purchase orders and invoices, between organizations in a standardized format. EDI streamlines the transaction process by reducing paperwork and manual entry errors, facilitating faster processing and improved accuracy in data exchange. It allows businesses to automate their supply chain and improve collaboration with trading partners, ultimately enhancing efficiency and reducing costs associated with traditional paper-based methods. EDI is widely used across various industries for efficient business communication.