EDI technology has been around for a while. Back in the 90s, top-notch industry magazines talked about EDI as a technology that will help companies stay ahead of curve. This holds true even today. But, a question still remains: Will EDI offer enterprises a competitive advantage or will it help them gain a competitive advantage.
In this blog post, you will be able to find how EDI can prove helpful for businesses.
EDI or Electronic Data Interchange is a technology that enables organizations to exchange data across their business ecosystem. It allows companies streamline business sharing and enhance data accuracy through automation.
Though EDI integration has a lot of use cases, the logistics industry is one of the many businesses that cannot do without EDI. Processes such as delivering shipments or sending invoices as well as receivables are automated, thereby increasing their accuracy and efficiency. In addition, the information is rapidly received in real-time, hence manufacturers can respond to the changing needs of the customers without any discrepancy.
Nevertheless, EDI implementation requires companies to deploy system integrations as it enables seamless data exchange. Application-to-Application integration is the foundation of EDI integration. However, at times it presents some serious challenges that often put off EDI projects. Enterprise ecosystems would rely on EDI value-added network (VAN) for information exchange. In addition to that, they would also rely on a data storage solution that can be used for storing information before it would be forwarded to the right stakeholder or system.
While EDI’s main aim is to standardize communication across trading partner ecosystem, there are still many companies that employ their own proprietary message formats, hence the data is mostly in an unstructured format. This is the reason why EDI needs to take care of the translation process wherein, unstructured data is converted into structured data formats. One of the most commonly used standards includes EDIFACT and ANSIX12. Apart from these two, enterprises can rely on other formats such as JSON and XML.
Simply put, EDI integration offers connectivity between two or multiple systems for allowing seamless data transfer between various components of the business ecosystem.
With that being said, there are several challenges to it. Let us find what these challenges are:
EDI Integration: Challenges
EDI integration solution poses a threat to organizations. It can overburden IT, decelerating their productivity.
EDI implementation is not an easy task. Companies must embrace the fact that EDI is a strategic challenge that requires huge support from them along with a sure-sort plan for how they can deal with the change management process. This aspect of EDI needs to be handled by formulating an effective integration strategy. Organizations must adopt a modern integration approach to savor the benefits of integrating EDI into every day of the company.
One of the primary challenges of EDI integration is that companies do not only need to establish communication among the partner ecosystem on a domestic level, but also on a global level. EDI integration software that you choose must cover the following two major areas:
- One-to-many communication: EDI integration you pick needs to streamline communication with your partners and suppliers.
- Many-to-Many Communication: In many cases, the EDI integration solution must allow buyers and sellers to interact with each other.
EDI Integration: Benefits
Modern EDI integration platforms can address the major challenges posed by EDI and offer benefits such as:
- Improved data quality: Modern EDI technology reduces the frequency of data entry errors to make data more accurate. With the help of accurate data, companies can make decisions easily.
- Increased operational efficiency: With an automated approach, EDI integration solutions allow companies to save a lot of time in creating invoices and process purchase orders. By doing away with manual methods, organizations can improve the quality of operations to boot.
- Faster IT productivity and revenue: EDI integration software reduces the additional burden on the IT, encouraging them to take up the governance role instead of an operational one. In effect, companies can accelerate their revenue generation and time to value.
In short, companies that aim for streamlining their data exchange processes need to adopt a modern EDI integration approach. Using a modern method, one can not only reap dividends such as revue and productivity but also gain a competitive edge.