Data can be packaged into different formats. Some formats are standardized so they can be used in applications written by different software vendors. Other formats are proprietary, only to be used by applications from a single vendor. Each business application stores data in its own proprietary format. Step 2 of the process is to convert the data from the proprietary format of the source application into an industry standard.
There are many different standards, but EDI and XML are the two most popular for B2B integration. Industry standards provide a common language that enables all business partners within a particular sector to communicate easily. Have you ever emailed a digital photo to a friend or family member? If so, chances are they were able to view the photograph on their computer without any problem. Reason being, the formats used for digital photographs—GIF, JPEG and TIFF (just to name a few)—are highly standardized. But not all types of data are as standardized as photos.