Is it time for you to upgrade your EDI system?
EDI as a competitive advantage
While EDI improves the quality of procurement of goods processes and collaboration with clients and business partners, it also saves substantial amounts of money.
How can you tell that an existing EDI system needs an upgrade?
Does the term “legacy system” sound familiar to you? In information technology, this term describes an old, well-established system in a company’s software environment that is still in use, but that is generally not up to par with the latest developments. This also happens in Electronic Data Interchange (EDI) and mostly affects small- and medium-sized businesses that find themselves caught in a legacy system cycle with their old EDI system for decades. This happens even though there is widespread awareness of the fact that digital expertise and correct data handling are increasingly turning into a competitive advantage for any company. To benefit from the opportunities inherent to the digital transformation, we need a more intuitive approach to all things IT, some willingness to innovate and a certain degree of risk tolerance. SMEs tend to shy away from introducing a new EDI system. This is rooted in a certain “status quo” mentality, paired with a lack of strategy. However, large-scale data integration requires a well-defined strategy.
When are you “EDI ready”?
SMEs are especially skeptical when it comes to technical and organizational requirements and their costs. This is mostly because existing ERP systems are not (yet) “EDI ready.” Oftentimes, all it takes is an expert consultation with the ERP provider and proactive support in collaboration with an EDI partner to swiftly and easily solve these “technical teething problems.” Before setting up a fully functional and advanced EDI system, any company should perform an in-depth analysis of its own business requirements and consider all possible options. This is a challenge, albeit one that comes with optimization potential.
The basis for the digital era
The primary goal of the new “EDI generation” is still to reach the highest possible degree of process automation via integrated data exchange and ultimately to avoid manual and paper-based business transactions. Among others, EDI is used for exchanging order information between retailers and manufacturers as well as for invoicing purposes (just think e-invoicing). Many additional business processes can also be handled via EDI, including master data management and sending electronic orders. A sophisticated EDI system creates a solid basis for managing complex merchandise flows, increasing productivity, meeting specific customer requests and ultimately puts companies in a position to face challenges of the digital era.
How to tell if your EDI is obsolete:
- No integration into your ERP system exists.
- To send outgoing invoices, data must be entered manually into the system.
- To use EDI, the communication process must be opened manually and users have to wait for data to come in and be processed.
- Mistakes in manually entered data cause merchandise returns and compliance-related fees.
- You are afraid of updating the PC on which your EDI runs because you are not sure if a backup exists and if you would be able to continue working on that system.
- You are using an RDT modem.
- EDI is a full-time job for one or several employees.
Symbolic image: copyright iStock, adventtr
Graphic: copyright EDITEL Austria GmbH