EDI, or electronic data interchange, is the electronic business document exchange between two parties that comply with certain pre-determined format standards. The process of data exchange is automatic and eliminates the repetitive manual data entry processes that are often error-prone.
In today’s cutthroat digitalized world, technology is no longer a simple supportive tool, but a strategic means that help businesses survive. Therefore, it is important that businesses are EDI capable and EDI compliant. However, let’s trace back to the beginning a little bit: how should company owners even start with their EDI journey?
There are a few choices for you in the market, and if you decided to go for outsourcing your EDI software or service, this article is for you. This is a comprehensive guide on how to choose an EDI provider that best suits you and your business needs.
What does it mean to outsource your EDI provider?
Two ways for your business to become EDI capable are by having on-premises EDI or using an EDI provider.
On-premises EDI software
On-premises EDI, or in-house EDI, is operated internally. The business owns every aspect of on-premises EDI. The server is physically in the company’s facility and connected to the ERP system. The business has full control over the software, from access, security, to data. In order to operate in-house EDI, the business needs a dedicated IT team with not only extensive EDI knowledge but also an EDI license and an established network.
The costs and complications of implementing and operating in-house EDI software sometimes can simply be too much for a business to handle. After all, on-premises EDI is a serious investment, so it is no surprise that a lot of companies opt for a third-party EDI provider.
EDI provider and its strong points
What is an EDI provider?
An EDI provider refers to a company that sells EDI software or EDI services, or both. Your business essentially rents the solution and has the EDI provider’s staff operate it for you. The notable features of EDI providers include the following:
- Most EDI providers focus on a particular target audience on the market. Some have target market segments. Some focus on certain company types, for example, SMBs – small and medium businesses, or specific vertical markets.
- EDI providers take care of the entire data transaction process – from the list of EDI transaction codes, EDI communication protocols, to partners, e-commerce platforms, or customers’ demands.
- EDI transaction is more than sending and receiving standardized data. There are other services revolving around the technology as well, including data mapping, testing, and so on. If customers use EDI services, they only pay for the ones they use and for the volume of transactions they have.
- EDI is more than the exchange of data. It is also about providing a business with greater benefits, namely real-time visibility, speedy and effective document processing, and transparency.
Why should you consider an EDI provider?
Other than the aforementioned benefits, an EDI provider also helps your business:
- Obtain considerable financial opportunities. Many major businesses are not willing to conduct business with non-EDI compliant companies. Should your business be EDI compliant and deliver outstanding products and services, it is clear that your partner will prefer your business over your competitors. As your number of sales goes up, so does your reputation.
- Save time and money. EDI software and services take care of the important but repetitive processes for you. Not only does the innovative tool eliminate the many man hours it takes to enter data, but it also saves you money spent on labor, printing, document storage, and shipping.
- Build strong relationships with your clients and partners. Effective communication is key to any healthy and long-lasting relationship. With EDI, the time you take to respond to your customer’s demands, adjustments, or any other messages is cut down significantly – you are easier to reach and the complications of traditional communication means are no longer a concern. Customers and partners will deem you as a trustworthy business that can handle important business deals.
Now that the basic concepts around EDI providers are thoroughly explained, it is time to figure out how to choose an EDI provider that best suits you.
What to look for in an EDI provider in 2022
But first, you need to understand your business
Before you start outsourcing any type of service or software, you first need to understand your business needs in order to choose the most fitting EDI provider. Try to answer the list of the following questions first.
Identify the important questions
Identify your whys and whats thoroughly and carefully. Why is your business looking for an EDI provider in the first place? Is it only to save costs? Or are you aiming to do business with major partners that require you to be EDI-capable?
In addition to the above questions, ask yourself further questions to truly understand your future EDI needs and expectations:
- What type of dashboard do you wish for?
- What does the implementation process look like?
- What EDI services are absolutely crucial for the company? etc.
Which processes are you considering automating?
Take a moment to go through the processes you wish to automate. Are you going to use the full range of EDI services offered or only a selection of services? If you wish to keep some processes in-house, who will be in charge of operating them?
Another important note to keep in mind is that your EDI provider will not take care of and maintain the business’ data. Make sure you have someone in charge of storing the data safely.
Can you manage EDI alone or do you need support?
EDI is a serious investment, but it does not end there. EDI is undoubtedly complex, so even businesses that consider themselves to be EDI capable need support from the vendor when they are seeking an EDI provider.
EDI providers typically provide you with two types of services:
- Fully managed EDI service. The EDI provider takes care of everything for you: the integration, the transactions, the system maintenance, and even specific requirements from the customer.
- Non-managed EDI service. The EDI provider only hands your business all the tools needed for EDI management and does not involve any follow-up process, which will be taken care of by your internal team.
Choosing between the two types of EDI providers depends on your company’s budget, expertise, and other kinds of resources. Some companies may prefer having control over the EDI processes, while others need support with it.
However, it seems that the fully managed EDI service is preferred over its counterpart due to its smooth onboarding experience and its adaptability. Moreover, the lack of in-house expertise or outdated handling process may harm the benefits an EDI is supposed to bring to the company.
Now that you have taken a careful look into your own business wants and needs, it is now time to move on to the next section: what should you be searching for in an EDI provider in 2022?
What should you seek in an EDI provider in 2022?
Relevant industry knowledge
An EDI provider with relevant industry benefits your business by:
- Having knowledge of the business processes and bringing you the most suitable EDI solutions that provide you with suggestions during the different stages of your project or whenever a problem arises.
- Having existing connections and understanding the formats specific to your industry.
- During different phases of your business growth, they assure optimal solutions based on the previous experience of serving clients in the same industries
Supports your needed document standards/ formats
A modern EDI software or service must have the ability to manage any data format. Whether the document is a non-EDI format like CSV, XML, or JSON; the EDI file format that complies with the format of the ANSI ASC X12 (ANSI stands for American National Standards, and ASC stands for Accredited Standards Committee) or EDIFACT, the EDI provider should have the ability to handle all of them. This is to ensure that there are no communication barriers between you and your partner.
Easy and smooth onboarding process
Having the ability to rapidly connect and exchange data on a variety of information platforms is crucial. Therefore, companies cannot afford to delay the onboarding process. Modern EDI providers make the process of onboarding new trading partners, suppliers, and distributors reliable, easy, and fast.
Adequate technical skills
Make sure your EDI provider has adequate technical skills that meet the proper SLA (Service Level Agreement) standards. Once EDI is integrated into your internal system, any errors can cause serious harm to your business processes and relationships. The EDI support team needs to be responsive, reliable, and accessible.
Flexible and user-friendly
No matter how big or small your business is, your EDI provider should be able to meet your needs. It should also be scalable to accommodate the growth of your company.
Another thing, the integration system of the EDI system or service with your internal ERP should be easy and fast. Also, the software or solution should be easy to use and navigate even without much training.
Minimize fines, chargebacks and manage downtime
As mentioned earlier, errors in the EDI system can cause serious harm to your productivity and business relationships, even resulting in sales losses.
Once again, you need to ensure your EDI support team meets the SLA standards. Do be clear with your support team about the maximum downtime, and check if there are any kinds of backups during such situations. This is especially important when you are operating internationally. Ensure your business continuity carefully to avoid expensive chargebacks as much as possible.
Customer references
Happy and satisfied customers are always the best proof of a good product or service. Since EDI is a serious investment, do not hesitate to refer to professional inputs or ask for your EDI provider’s customer testimonials or case studies.
Why you should choose SCS Solutions as your EDI provider
SCS Solutions is a credible EDI provider that is more than willing to listen and figure out the business demands with you. From there, SCS Solutions will build scalable, economical, and customizable EDI software for your company.We are aware of what makes an excellent EDI provider – and we believe we have what it takes to make valuable contributions to the growth of your company. Contact SCS Solutions via our website https://www.scssolutions.io/, Linkedin, or Facebook! We are always happy to hear from you.