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Interview: EDI – is it tomorrow’s technology or a thing of the past?

Karl Cegner, Head of eCom Competence Center, GS1 Austria
Karl Cegner, Head of eCom Competence Center, GS1 Austria

Karl Cegner, an e-commerce expert at GS1 Austria, in an interview about the future potential of Electronic Data Interchange (EDI).

EDI has been available for more than 25 years. Some people consider it an outdated technology.
Karl Cegner: Electronic Data Interchange, also known as EDI, is anything but outdated. The opposite is true: since its inception it has been synonymous with innovative supply chain management and the ability to connect companies with each other, independently of the industry.
Companies in a large variety of industries, running the gamut from FMCG, fashion and hotel and restaurants to pharmaceuticals and finance, use EDI to exchange commercial and technical data between computers and applications (e.g. ERP systems). The transmission is automatic and platform-independent. EDI is actually everywhere, whether we purchase a carton of milk in the grocery store, sportswear, drugs or many other products.

Would this not be possible without EDI?
Karl Cegner: It would be possible, yes. But then, it would also be much more complex and expensive. Orders, despatch advices, invoices and all other logistics processes required for the procurement of goods – all that would have to be done manually. In addition, exchanging paper documents is expensive and there’s a lot of room for error. Electronic transactions, on the other hand, make for efficient and smooth information processing for both manufacturers and retailers.

Companies new to EDI often shy away from implementing EDI in the first place. What can you do to make them change their minds?
Karl Cegner: Companies should be more future-oriented. It is true that EDI only works if well-structured business processes are already in place. The introduction of EDI processes alone will not optimize processes. The opposite is true: problems and deficiencies will become evident. This can be a unique opportunity to address a company’s weak points and lay the groundwork for efficient and seamless processes.

When exchanging data with business partners, the long-term increase in efficiency and decrease in expenses is especially beneficial. Thanks to standardized technologies, connecting new business partners is very easy and improves every company’s overall competitiveness. It is thus not surprising that companies in the entire CEE region plan to expand their use of EDI.

While the implementation of EDI is a general improvement for any company, it also requires a financial investment. How can companies optimize the price/performance ratio?
Karl Cegner: The basic rule is: quality trumps price. As in many other industries, the EDI market is not immune to price dumping, which unfortunately  means the absence of an adequate level of reliability, professional assistance and support. This can ultimately be more expensive than getting it right the first time. It pays off to study this issue carefully and to make the right choice.

Depending on the requirements, that is, the amount of documents to be processed, different EDI solutions are available. If the data volume is high, maximum efficiency and optimization can be achieved with a high level of automation, that is, a fully integrated EDI solution. Full automation of supply chain processes, ranging from integration to the procurement of goods and invoicing, can be achieved via a direct connection to a company’s ERP system.

For companies that rely on an online EDI solution to exchange a small number of documents, locally installed web clients that can be accessed via the Internet are the best choice. It only takes a straightforward installation on the PC to implement the EDI client. There is no additional need to invest in infrastructure to keep EDI up and running at any company.

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