But if EDI is so standardized… then why does it cause so many headaches!?
That’s the question we set out to answer in this article. Read on as we delve into the pain points and provide some tips on how to make EDI easy to operate and manage.
The Promise of EDI
EDI–Electronic Data Interchange–is a means of sharing documents between businesses in a structured digital format. It lets trading partners integrate their processes and systems and share data electronically, automatically, and instantaneously. Lines of communication always stay open, keeping trading partners in sync.
EDI helps eliminate errors. It flags and notifies users of any incomplete information or miscommunications, averting delays and strengthening relationships. By automating document exchange with EDI, companies save on postage, couriers, and physical storage costs while eliminating manual errors.
The Key Benefits of EDI
Here’s why EDI is the industry standard for exchanging documents in many industries:
1. Speed and Efficiency
EDI replaces slow, manual, error-prone processes with fast, automated, accurate ones. Users can create, send, and receive multiple documents in seconds, spending less time on the menial parts of their roles and more time on strategic or revenue-generating activities.
2. Improved Accuracy
EDI eliminates error-prone, manual processes, ensuring documents exchanged are accurate. Any inconsistencies are flagged immediately and easily rectified. Fewer mistakes improve customer and employee satisfaction, contributing to more robust, longer-lasting relationships.
3. Lower Costs
EDI lets companies cut back on paper-related expenses, such as printing, stamps, and physical storage. Improved accuracy means fewer fines, refund requests, and chargebacks.
4. Enhanced Security
Creating and exchanging documents manually and storing them physically is not secure. EDI uses encryption, authentication, tamper-proof electronic signatures, and strict access controls to protect your precious data.
5. Better Data Visibility
EDI stores data in a digital format that's accessible for analysis. It enables companies to run reports to identify weaknesses, opportunities, trends, and patterns, allowing them to make faster, better strategic decisions.
6. Integration and Automation
Robust EDI solutions integrate seamlessly with ERP and other back-office systems. They facilitate cross-functional workflows and create a single source of truth that breaks down silos and keeps all your people, processes, and systems in sync.
EDI: A Love-Hate Relationship We Can't Escape
EDI is a powerful and transformative technology. That's why it's the backbone of vast chunks of the world's economy. However, navigating the intricacies of EDI can often feel complicated, mysterious, and strangely outdated.
One reason for this could be EDI’s age. It’s been around since the '60s, and as it spread through various industries over the past 60 years, new standards that don't always play well together popped up.
Another reason for EDI's complexity is the scale of the challenge it’s designed to solve. It's supposed to connect businesses of every shape and size. But every company does things differently, and keeping everyone on the same page is no easy feat!
Fundamental Causes of EDI Complexity
Different Businesses; Different Ways of Doing Things
In today's dynamic global economy, countless enterprises engage in the exchange of products and services. Many use different business systems, and even those using the same systems implement unique configurations.
This heterogeneity makes adopting a single, unified EDI format impossible, necessitating a tailored setup process for each trading partner. And because an incorrect setup can have disastrous consequences, humans must still be involved to provide guidance and ensure accuracy.
But humans are fallible, legacy business systems are unreliable, and the ever-changing commerce landscape presents new challenges every day. These struggles lead to intermittent errors in EDI systems that disrupt the seamless flow of business and impede the promise of automation.
A Relic of the Past
EDI is an opaque system with limited high-quality developer resources. This makes it challenging to comprehend and adapt and has insulated it from the revolutionary advancements shaping the broader technological landscape.
This stagnation means companies using EDI for decades still wrestle with issues they first encountered back in the 90s. Rather than update their systems, they hire additional EDI specialists and are left questioning the excessive costs and time involved in transmitting seemingly simple business documents.
The Standards Are Not Standard!
From x12 to EDIFACT, OAGIS, and xCBL, one of the main problems with EDI is the sheer number of standards. Instead of sticking with one, companies with many diverse partners must manage multiple standards simultaneously, creating thousands of maps that compound the complexity.
Another paradox of standards is that they’re constantly changing, with new versions released yearly. But migrating, remapping, and retesting are expensive and time-consuming, so most companies still use EDI standards that are 20 years old.
The Frustration of Integration
You need to integrate your EDI solution with other core back-office systems to derive maximum efficiency gain and automate workflows.
But EDI integration isn’t always easy, especially not with legacy systems. Typically it requires specialized knowledge of data formats, standards, and communication protocols. Hiring qualified staff to manage the process can be a struggle, and outsourcing has its only issues (see below.)
The Anxiety of Outsourcing
For many companies, entrusting EDI management to their EDI vendor or other third party is better than hiring expensive staff or bogging down overstretched IT resources.
But outsourcing any aspect of operations, particularly one as essential and potentially sensitive as EDI, always induces anxiety. Worries include concerns over relinquishing control, the risk of vendor lock-in, potential over-dependence, and, of course, considerations regarding data security.
EDI doesn’t have to be stressful. With the right partner on your side, you can rise above the complexity, experiencing greater speed, accuracy, and automation without the downside.
Leave Your EDI Woes Behind with 1 EDI Source
With a solution like 1 EDI Source, you can experience the following advantages:
1. Seamless Trading Partner Integrations
The experts at 1 EDI Source can help get you up and running fast with new trading partners, whatever systems, standards, and communication protocols are required. From Amazon to Walmart, Target, and CVS, we have thousands of the biggest businesses in the United States in our Trading Partner Network. They’re all pre-mapped and ready to go.
2. Automatic Upgrades and Updates
1 EDI source brings your EDI system up-to-date and ensures it never falls behind again. Automatic delivery of upgrades, enhancements, security patches, and improvements keeps you at the cutting edge of the EDI industry
3. Complete Flexibility and No Tie-In
With 1 EDI Source, you get total flexibility. You can implement an on-premise or cloud-based solution. And you can manage it in-house or let our experienced EDI experts take care of everything for you. Whatever you decide, you can take all your maps and data with you when you leave–there’s no tie-in.
4. Seamless Integration
1 EDI Source is designed with integration in mind. We can integrate seamlessly with almost any current back-office system, providing greater visibility, productivity, and responsiveness.
5. Ironclad Security
Data security lies at the heart of everything we do at 1 EDI Source. It’s been the cornerstone of our business for over 30 years. With our secure encrypted protocols, you can meet and surpass the most stringent regulatory and business partner requirements.
