A company that is growing rapidly needs to understand the technology needed to make it effective and competitive. It is not enough to simply know what tools you need and buy them; you must break them down to the finest details. Price, implementation, compatibility, regional regulation, and even partner compatibility must be considered for successful integration.
When it comes to one of the most important e-commerce tools, the rules are no different. Understanding EDI implementation is crucial for successful and beneficial integration.
EDI stands for electronic data exchange, and it is the cornerstone of business data transactions, especially procurement. It facilitates the transmission of buyer and supplier data in the form of standardized formats, and without human intervention. It also eliminated burdensome paperwork while saving money and time.
Although all this sounds amazing, you first need to have EDI up and running to enjoy the benefits we are talking about. This post will show you just how to do that.
What is EDI Implementation?
Electronic Data Interchange (EDI) implementation is the process of implementing or deploying an EDI solution or service to enable a firm to transmit and receive EDI transmissions with its trade partners.
EDI deployment can also refer to the process of trading partners adopting EDI for the first time, or trading partners becoming EDI-compliant with each other. Numerous testing, screening, and accessing stages must be conducted at the trade partner level.
The process is often broken down into ten distinct steps:
Create an Organizational Framework.
Your first step should be to guarantee that you have the necessary skills on your team to operate the EDI. Identify and train EDI coordinators and teams to help your organization implement the program.
Conduct a Strategic Review.
The areas of your business most in need of EDI will depend on the kind of company you have. Strategic evaluations highlight the areas of your business where EDI is most required, and where it has the most potential.
Conduct In-Depth Research
When deploying EDI, it is critical to conduct an accurate cost-benefit analysis. How much can you expect to earn in terms of savings or revenue with EDI? How much will your budget allow you to spend on EDI software? What software is best for your field of expertise?
Create Practical, Business-Oriented EDI Solutions.
Choosing the best EDI solution for your company needs a thorough grasp of both technical and commercial challenges that focus on the effect on partners. One of the main reasons people get EDI is to connect better with trading partners, so it is necessary to begin collaborations as early as you can.
Choose the best EDI network provider (VAN)
Using an EDI provider makes the most commercial and financial sense for the majority of enterprises. It is critical to choose the right service for your company.
Integrate EDI into the Business
Incorporate EDI documents into the centralized software system of your business. This step is simpler than it sounds because all you need to do is connect it to the ERP system.
Integrate Company Data to the EDI
Configure the rest of your business application such that the data they generate can easily be transmitted to the EDI interface. This unification of systems will allow any relevant data access to the EDI and free up time for your employees.
Perform Data Mapping
Documents must be mapped to facilitate effective data transfer. Doing this ensures the seamless flow of information between internal applications and business partners.
Perform a Pilot Project
Before going live with your EDI system throughout your entire trading community, it is important to choose a small number of partners to test the system in simulated "live" settings.
Distribute EDI to Trading Partners
The final step is to roll out EDI to all of your trading partners. Do this in gradual stages to match your present company priorities.
Challenges of EDI Implementation
Implementing an EDI solution on-premises with all of your buyers and suppliers is bound to be riddled with challenges. Over and above the long, detailed procedures of the process, businesses will severely underestimate the time and expense required for successful EDI implementation.
As a result, how you deal with these obstacles will be the difference between effective EDI incorporation and EDI frustration. Here are some of the most often encountered EDI implementation challenges you are bound to experience:
Choosing the Wrong EDI Standard and Software Provider
EDI is regulated according to different standards, all of which are only compatible with each other. The EDI standard you use also needs to be compatible with the other software in your company for easy ERP integration. Therefore, buyers and suppliers often need to use compatible EDI standards for business to flow easily. If not collaborative EDI portals must be used.
You also need to choose the right EDI software provider. You must find one that is a good fit for your company’s unique needs and goals. This process can be strenuous and you may still get it wrong. Many providers are notorious for false marketing gimmicks that mislead clients and without your knowledge, you could be on the receiving end of a raw deal.
Unexpected Complexity
As we have seen, EDI implementation is not a five-minute operation. Unlike EDI operation which is done in three steps, presentation, translation, and EDI transmission; EDI implementation is done in ten steps.
Many companies planning on implementing EDI do not properly gauge the time and expenses required to complete the process. They are also ill-informed of the sheer complexity of EDI implementation and feel overwhelmed.
Compatibility With Trading Partners
Before implementing EDI, you need to understand the best way to collaborate with your long-time suppliers. They may or may not have EDI-compliant software, so you run the risk of locking them out of your supply chain if you do not collaborate with them. The good thing about this issue is that although most suppliers may not have any EDI-compliant technology, they will be capable of using collaborative supplier portals.
Poor Data Security Measures
Many people who are new to EDI software may take the security they offer for granted. However, even with the in-built capabilities EDI offers, managers must take all necessary steps to secure the data being sent and received. There is no such thing as too much security. All available methods of extra encryption and cyber security should be used to the fullest.
Key Takeaways
- EDI implementation refers to the process of incorporating EDI into a company’s e-commerce system.
- Implementation involves a ten-step process that requires adequate time and planning to complete.
- EDI deployment has several challenges that can be avoided through proper preparation, collaboration with suppliers, and adequate time allocation.
Summary
As with any novel technology that is introduced to a company, EDI has its set of challenges and joys. Proper preparation and tempered expectations will make any EDI implementation a pleasant experience. Although the process may seem lengthy, the amount of time and money saved through EDI implementation will be much more.
