Electronic Data Interchange (EDI) is the electronic swapping of business information using a uniform and consistent format; a method which allows one company to send information or data to another company electronically rather than using paper.
Although, many business documents can be exchanged using EDI, yet the two most common ones are Purchase Orders and Invoices. For a starter, EDI substitutes the mail preparation and handling linked with old-style business communication and dealings. However, the real strength of EDI lies in the standardization of communicated information in business documents, which makes it a “paperless” exchange replacing faxing and mailing of documents.
With this development in the tech world, many companies are looking to implement Electronic Data Interchange in order to comply with requirements from retails and customers. But there is more than just implementation of EDI.
The key to success here is to find an EDI solution that is compatible with your business system. This move may prove to be beneficial as a strategic investment for your business and make you more competitive along with yielding ROI in the coming years.
The integration of EDI with your system may be helpful in eliminating manual data entry procedures and thereby reduce the occurrence of frequent errors. Along with this, it can also do the following:
- Eliminate Paperwork
- Save time & labor
- Ease the onboarding of EDI partner
For integrating the EDI system with your existing application, data is required to be mapped. For converting your requirement into reality, you must have a fully knowledgeable staff to carry out the integration. Here are the steps which you can follow to integrate the EDI with your existing system:
Form a Structure
- Arrange for an IT coordinator who has a working knowledge of EDI. Whether the person is available in-house or hired externally, he must have in-depth experience in delivering EDI.
- Form a committee to hear the implementation process and include the heads of all the departments affected by the implementation.
- Take the consent of the senior management before proceeding. Authorize some team members for the required tasks and hold them responsible for the implementation.
Analyze the effectiveness of EDI in your business and organization. Check whether the system will be able to perform what it intends to in the given scenario.
- Cost-benefit analysis is also a necessity when implementing EDI as it will give you the real-time picture of where you are and how EDI can bring in improvements, after integration.
- Choose the network carefully before integrating EDI and see how the network focuses on your requirements. EDI can be executed either through VAN – Value Added Network or over the internet. VAN is more secure and will typically require an account that simply acts as an electronic mailbox to both send and receives electronic documents. Include the pricing, basics, and added functionalities are some of the critical factors to keep in mind while choosing the network. However, both networks provide similar functionalities, yet the main point to remember here is that both parties should agree to use the same network for EDI to work.
- You can also use prototyping methodology to see how EDI integrates with your existing applications before implementing it in real-time. This will also make it clear how much mapping is required and whether any further customization is needed or not.
Type of EDI Solution
- EDI software, web-based EDI and EDI service bureaus are three types of solutions available in the market.
- EDI software is installed directly on the company-owned computer. This solution is best suited as it offers the highest level of flexibility and control. Back office processes can be integrated with EDI software to improve the business efficiency. Documents are exchanged directly between your EDI software and your business partner’s EDI software. This ‘point to point’ method of communication allows for nominal delays and minimum errors.
- Another option is web-based EDI which uses the internet as the medium of exchanging documents. Web-based EDI is a shared process and requires manual entry of the EDI information. There is little opportunity for integration and lessens the control over the day to day operations.
- EDI contractors can be hired as EDI service bureaus to perform your EDI operations at a charge. This method may not allow you to have full control over the operations but this method can give you maximum customization according to your requirements. This may involve expertise in EDI delivering services and you do not have worry about the integration process.
Integrate Data Across Business
- Invest in data analysis and decide the end point of data. Look into data requirements, systems, document formats and standards used in the industry may prove useful in this case.
- Once the analysis is over, data mapping is required to be completed by the coordinator. The map defines how the data in the EDI transaction relates to the data in the internal system. Mapping should follow a format and eliminate the need for custom interfaces.
- Run a pilot project with some of your business partners to see how it performs. Take one application at a time like purchase orders and keep it simple. Check for accuracy with partners and ask them to test it from their end by sending similar documents.
Paper transactions are not removed altogether until both business partners are fully satisfied that the EDI system is performing well.
WebBee Global provides integration and implementation services for your EDI software. This will save you time and effort in engaging your staff for the same. Companies which do not have expertise in EDI solutions or the manpower to handle the integration and implementation process can rely on WebBee for its impeccable service quality.
WebBee’s managed services for EDI will look after your requirements in a comprehensive manner. This will range from developing maps to link documents together and to recruiting partners for forming trading communities. Experts at WebBee will make sure the deployment is perfect and exchange of documents is secure from both ends.