What do you know about EDI? How well do you understand it? Are you aware of the many EDI myths that have been floating around? Let’s take a look at some of the most popular myths together and debunk them.
These myths might be unknowingly stopping you from switching to an EDI solution – a technology with the capability to help you alleviate the pain caused by manually keying data and dealing with chargebacks.
The myths
EDI Myth #1 – EDI is expensive
Yes. EDI is not cheap. It takes both money and time to embark on an EDI journey. It is, without a doubt, a serious investment. Therefore, it should not come as a surprise when many companies are afraid to take the leap while prefer sticking with the legacy, traditional system.
Despite the looming fear and worries, EDI’s benefits outweigh the costs. The upfront investment may seem scary at first, but in the long run, it will save you a lot of time and money. Manual data entry often leads to unwanted errors. Consequently, there will be a lot of back-and-forth fixing, and you surely will suffer from chargebacks. A single chargeback may seem minor at first, but once they accumulated, the seemingly trivial manual errors become extremely expensive.
In conclusion, yes, EDI is expensive when you first start. But in the long run, it will be a worthy, cost-efficient investment.
EDI Myth #2 – EDI is extremely complex
Yes, EDI is complicated, but not the same way it used to be.
Gone are the days when experts were needed to support the process of collecting, processing, and mapping data from different sources. That is not to mention the enormous number of hours involved to complete the process. The development of technology has allowed this process to be performed using modern tools and technologies. It is now much more accurate and faster, too.
Popular EDI standards like ANSI ASC X12 or EDIFACT are also frequently reviewed for clarity and relation to the ever-changing data management systems such as ERPs or CRMs.
Of course, you and your team can always opt to outsource EDI services and only pay for the services you need. The EDI provider will take care of the entire process for you, and you do not need to go through the headaches of budgeting and trying to figure out EDI’s hardware.
EDI Myth #3 – EDI is outdated
EDI has been around for over four decades. Therefore, it is no surprise that many think of it as an “old technology”, even obsolete.
Nonetheless, many major businesses still require companies to be EDI capable before establishing any kind of partnership or conducting any further transactions. For example, EDI is a common requirement in the medical industry, or at large businesses, like Walmart. Another important piece of evidence is its revenue forecasts, which prove EDI will continue to play an important role in many industries. GlobeNewswire forecasts Electronic Data Interchange (EDI) Software Market Size to reach USD 4.04 Billion in 2029. EDI might be one of the “older” technologies out there, but it remains a strong stance in today’s ultra-competitive market, as its market value projects steady growth.
EDI Myth #4 – EDI is not secure
B2B data transactions often have strict requirements.
When companies utilize EDI to transfer data, it can either be done directly, via a VAN (Value Added Network), or a broker. During the transmission process, there are a number of secure protocols available for the transfer. This may include the encoding of the message, identification numbers, passwords, etc. There are certain checkpoints that require validation.
Additionally, users can always demand acknowledgment receipts from their partners.
In conclusion, data transmission via EDI is fast, accurate, and most important of all, secure.
EDI Myth #5 – Implementing an EDI solution takes too long
The EDI implementation process might take more time when it comes to larger organizations with a large volume of transactions. However, when it comes to small or medium enterprises, the process does not take as long – it only takes a few weeks and the EDI solution is good to go. Of course, the process can always be much faster should businesses opt for EDI SAAS (software-as-a-service) – which only takes a few hours to integrate the new technology into the system. Companies will not need to invest in hardware or a dedicated IT team in-house.
EDI Myth #6 – One ERP system is enough, no need for a separate EDI solution
ERP (Enterprise resource planning) is the glue to connect the core computer systems of a business. This varies from finance, HR (human resource), procurement, services, and more. An ERP system is capable of many things. Some even have a “plug-in” EDI solution.
As multi-functional as an ERP system is, one should not completely rely on it and dismiss the benefits of a stand-alone EDI solution.
Oftentimes, “plug-in” EDI solutions in ERP systems are limited. ERP itself does not provide a user with enough essential EDI functions. Consequently, important business processes such as onboarding are unnecessarily prolonged, harming the business’s bottom line, even. A stand-alone EDI solution integrated into the ERP systems brings about an abundance of benefits, both during the process of managing any in-house resources or dealing with business processes that require the help of an EDI solution. Your data is centralized, workflow streamlined, and business cycles are shortened significantly.
EDI Myth #7 – EDI is difficult to keep track of, especially with a large volume of transactions
Any given business typically has a large network of trading partners. Each trading partner has its own set of standards and regulations that you and your team needs to comply with. Moreover, there are multiple transactions conducted each day – which in total accounts for a huge transaction volume. How should an organization go about managing all of them on an EDI account?
The truth is, however, that EDI has the capability to handle a large transaction volume. EDI is meant to automate the manual data transaction process from one trading partner to another. Moreover, a company might have its own set of regulations, but there are still industry standards that every company needs to comply with. EDI is also constantly evolving to meet the modern demands of data exchange – especially when it comes to modern EDI, as it is no longer solely about the data exchange between two parties.
EDI Myth #8 – EDI simply involves data transformation
As mentioned earlier, EDI is no longer purely about data transmission.
Even though data transmission is a major part of an EDI solution, EDI is more than that. Organizations have to put in work to keep track of the in-house data mapping and partner configuration. The data also must be managed once it travels outside your internal systems to ensure its security and integrity, and whether it is useful or not.
Modern EDI also takes into consideration your business’ ecosystem, making use of the clients’ available facilities, combines of internal and business-facing processes, and so on. It is also capable of working with non-EDI files. All in all, modern EDI has evolved a lot and is a lot less about coding now.
EDI is here to stay
The world we live in today is a digitalized one. The strong and fast growth of the Internet has given enterprises more freedom than ever to exchange B2B data in a matter of seconds. Despite the numerous myths surrounding EDI, it has made use of digitalization and continues to play a major role in the B2B ecosystem. As its market value is projected to continuously grow, there is no proof yet that EDI will be out of the picture anytime soon.
With that being said, instead of buying into the myths, you and your team might consider starting to embark on the EDI journey instead. If you want to take your first steps but are not sure where to start, SCS Solutions team is more than happy to guide you through it. Contact us via our website https://www.scssolutions.io/, Linkedin, or Facebook!