Traditional EDI and Cloud-based EDI
Traditional EDI
Traditional EDI (electronic data interchange) often refers to on-premise EDI that uses the standard formats of electronic data exchange. These formats are established by organizations such as UN/EDIFACT (the United Nations rules for Electronic Data Interchange for Administration, Commerce, and Transport) or the ANSI X12 (American National Standards Institute X12).
Cloud-based EDI
The modernized, cloud-based EDI no longer revolves solely around the electronic message exchange between two parties. It now takes into consideration the integration into the business’ internal workflows, which include the processes of onboarding, data transformation processes, and governance that enable the traditional EDI. With better visibility, cloud-based EDI shows the business ecosystem and the end-to-end processes.
The biggest difference between traditional EDI and modernized EDI is flexibility. Again, modern EDI no longer focuses strictly on the formats, transaction codes, and communication protocols of the data exchange, but is constantly updating to keep up with business ecosystems. It is the ability to integrate with the different platforms that is highlighted.
Traditional EDI challenges
The traditional, sometimes rigid EDI can pose a number of challenges to a business. Below are a few commonly encountered issues when it comes to traditional EDI.
Costly
Maintaining in-house EDI software is certainly costly. EDI software in itself is already a big investment, but if your business sticks with outdated EDI software, even more stress is put on your finance. You would need to cover the cost of EDI software implementation, an EDI license, consultancy, and staff training. Furthermore, if your EDI crashes or encounters any other issues, it will take you time a lot of time and money to fix it.
Flexibility
One of EDI’s key features is its standardization. However, that does not mean there is only one standard for every industry and company – different industries have different standards, protocols, and demands, and may even have a different workflow. Outdated EDI software will have trouble keeping up with the numerous regulations across different businesses. This problem is even more pronounced once your business expands – the system cannot support your data exchanging process. The inability to do so hinders your business growth and ecosystem rather than supporting it.
Integration
As mentioned earlier, the inability to fully integrate with your internal business systems or applications means that a lot of the supposed automation is removed. This defeats the very purpose of implementing EDI software in the first place – to automate as many of the repetitive processes as possible and eliminate human errors. Some companies deal with this problem by throwing in labor and handling the tasks the traditional way – but this is only a temporary solution. Once the business grows and the transaction volume goes up, the time lost and human errors are almost inevitable.
Accuracy
With outdated EDI software, not only is the manual data entry process extremely error-prone, but the trading partner’s complex regulations may also cause your team significant difficulties. It is important to keep in mind that EDI documents are made for machines, not for humans, to read and understand. Therefore, if you encounter any error during the transaction process, it can be extremely painstaking to seek that one error and try to fix it. On top of that, there are numerous demands from trading partners that you must deal with. By this point, the outdated EDI software is more of a hindrance than a tool to help your business transactions flow.
Reasons businesses prefer cloud-based EDI
As previously described, what sets traditional and modern EDI apart is the integration. It is one of the strongest reasons, but surely, not the only one.
Cloud-based EDI boosts B2B e-commerce
The boom of e-commerce sites has called for businesses’ clear and effective flow of products and information. An enhanced supply chain end-to-end visibility is absolutely crucial as well, as this will allow businesses to monitor the flow of the inventory level, gain consumers; trust and comply with the client’s requirements. The automation and integration of modern EDI support all the above tasks.
Cloud-based EDI enables automation
Technology has rapidly evolved over the past decade; thus, posing unprecedented challenges to businesses. It is therefore clear that businesses need to adopt new EDI methods to survive in today’s ultra-competitive market.
Modern EDI makes customizing, updating integrations and the onboarding process easy. It is also much more user-friendly due to using techniques like visual modeling or templates instead of coding. Additionally, there are essential updates to accommodate the trading partner’s regulations, applications, or services. Along with it, business users are provided with end-to-end visibility via analytics, secure dashboards, and notifications. All these mentioned features make modern EDI much more attractive.
Cloud-based EDI is scalable and flexible
Modern EDI allows for seamless integration. Through a variety of connectivity methods like web portals, the integration allows for your business transaction to carry on as smoothly as possible. It does not matter whether your business partner is low-tech, high-tech, or uses APIs.
The transaction volume is not a problem, either, as cloud-based EDI is flexible and can scale up per your business demands.
Cloud-based EDI fosters collaboration
Boosted B2B e-commerce, automation, scalability, and flexibility allow for a smoother collaboration. Having most of the biggest challenges removed means that you can focus on building a strong, long-lasting, and healthy relationship with your business partners. Gone are the days you struggle for hours, even days trying to onboard a new business partner – now, you can do it easily even without extensive EDI knowledge thanks to the cloud-based EDI.
The EDI solution for your business
Investing in in-house EDI solutions is a huge investment, both time-wise and financially wise. That’s why more and more businesses are moving toward cloud-based EDI. To keep up with the dynamic growth in the digitalized landscape, cloud-based EDI is the obvious solution – especially as it is cheaper, more flexible, more accurate, and more user-friendly.If you are seeking such could-based EDI software, look no further. SCS Solutions is ready to help you embark on your modern EDI journey. Let us know how we can help! Contact us via our website https://www.scssolutions.io/, Linkedin, or Facebook.