EDI Is Not A “Checkbox” – Especially When It’s Integrated With Your ERP System
When I say, “EDI is not a checkbox,” I mean that choosing an EDI vendor – especially one that integrates its EDI solution with your ERP system – is not simply a matter of choosing a commodity product on the basis of initial cost and perhaps feature sets, in order to meet a retailer’s EDI mandate.
Many suppliers implement EDI simply to conform to their partners’ requirements. In this scenario, EDI becomes a cost of doing business that offers little value-added to the supplier. However, EDI will be the gateway through which you transact business with your biggest customers. Companies that start transacting EDI with one retailer may quickly end up selling to three, four or many more EDI trading partners. This is why EDI deployment is actually a strategic investment that requires due diligence.
In fact, using EDI simply to comply with a customer mandate can mean duplication of effort in your order processing. For example, after you receive a purchase order from a trading partner in your EDI system, you would then need to manually enter the data into your ERP or accounting system before you could do anything with it. Likewise, invoices you create in your ERP system would need to be re-entered into the EDI system before you could transmit them to customers.
Efficient EDI services are vital to your important trading partner relationships. Problems with EDI can result in negative impacts on your supplier score and even your brand image. Some suppliers have lost the business of large retailers or found that they were unable to work with new customers because their EDI solution made their order processing so inefficient.
EDI integration with your ERP system changes all that. It enables you to enjoy the same productivity and supply chain visibility benefits as the big retailers. Order processing becomes more efficient because there’s less manual data entry and fewer errors, which saves time and money – reducing your operating costs. EDI integration with your business system can also save you money by helping to eliminate “chargeback” penalties that trading partners can impose for problems related to EDI documents such as keying errors, missing data or failure to meet time limits on supply chain tasks. The more EDI trading partners you have, the more these productivity benefits multiply.
Criteria for an Integrated EDI Solution
If you’re looking to integrate EDI with your business system, here are some key criteria that your EDI vendor evaluations should include:
How is the product supported?
Does the EDI vendor develop, maintain and support the integration under one roof? Or is a third party involved? Often, EDI providers develop only their EDI translator software themselves. They then partner with third-party systems integrators to provide integrations with ERP systems.
This scenario can result in your business dealing with multiple support teams and multiple vendors. It also increases the risk that partnerships dissolving or a small integration company going out of business will lead to support problems – possibly resulting in the need to seek a new EDI solution.
Does the EDI vendor have a solid track record of success integrating with your ERP system?
Any EDI vendor you’re seriously considering should have multiple satisfied long-term customers that are using integrated EDI with the same ERP system you have. To verify this, ask for references and call them. Check the vendor’s website for recent case studies too.
What is the EDI vendor’s relationship with your ERP vendor?
Do they have a long-term, strategic partnership? Or is their EDI integration simply “certified” to work with your ERP software?
This is important because a vendor’s ability to integrate with your ERP solution today doesn’t guarantee that the two systems will remain compatible as they evolve. You don’t want to be locked out of upgrading your ERP package for fear of breaking your EDI link to your key customers. An EDI provider with a strong and longstanding relationship with your business system provider is much more likely to offer compatible integrations across the multiple versions of your ERP provider’s product that will appear in the future.
What is the total cost of ownership (TCO) of the integrated solution?
Some suppliers new to EDI choose a vendor primarily on the basis of initial cost. To determine TCO, look at such factors as the cost of software upgrades, and the cost of support and professional services post-implementation. For example, is there a cost associated with updating your trading partners’ mapping specifications? Retailers can make multiple updates per year, so if you have multiple partners these costs can quickly add up.
At TrueCommerce EDI Solutions, our mission is to help make your EDI implementation a productivity tool that empowers you to grow your business not just today, but well into the future. We are committed to offering EDI that integrates smoothly with your ERP system from deployment on through the lifecycle of the solution.
To get a deeper understanding of the value of an integrated TrueCommerce EDI solution for a business like yours, view a success story on our website.