Electronic data interchange (EDI) enables you to optimize your supply chain as it automates business transactions and provide you with more insight into your data. There are a lot of different EDI systems to choose from, and all have different functionalities. How do you choose the right EDI system for your situation?
When you’re looking for an EDI system, there’s no universal “best” solution. Every organization has different goals, different business partners or a different supply chain and all EDI systems have pros and cons. In this blog, we explain the differences between EDI systems so you can decide which type is the best choice for your organization.
In our view, the areas you need to consider when looking for EDI system are:
- The costs of an EDI system
- Services and support provided by the vendor
- The size of your ecosystem
- Amount of business transactions
The costs of an EDI system
EDI solutions can be divided into three categories: supplier only, technology partner, and strategic partner. Solutions offered by strategic partners have more functionalities and are usually more expensive. However, which category is best for you and how much you need to invest in an EDI system depends on your business and your business goals.
Supplier only: In most cases, these are simple EDI solutions with basic EDI functionalities. These solutions don’t allow process alterations and offer little to no support, ideal if your supply chain is limited to a few partners with low complexity.
Technology partner: Organizations who opt for EDI solutions in this category are dealing with bigger or more complex ecosystems. These solutions offer a unified view of the business for deeper insight of your data.
Strategic partner: These are EDI solutions where service providers are not only delivering software but also operate as a trusted partner as they use their knowledge and expertise to improve your business.
Services and support provided by the vendor
When looking for an EDI system, we advise comparing vendors based on your resources’ time, skills and expertise versus the resources of an EDI service provider. Most companies have a structured approach to implement a new technology. However, they often forget an equalled structured approach to improve the skills of their employees and simply leave the technical part to the service provider, resulting in higher and sometimes, unnecessary costs.
Furthermore, check if the EDI-system is actively supported. EDI suppliers mostly don’t offer support and often don’t automatically update their software according to changes in data standards or laws. For example, when there are changes in laws and legislation or changes in the data standard you are using, you want an EDI system that is automatically updated based on those changes.
Size of your ecosystem
The choice for an EDI system also depends on the size of your ecosystem. In other words, the number of business partners and complex processes you are dealing with. Suppliers with cheaper solutions often cover the basic features and are great when you are working in a small ecosystem with low complexity.
However, when you work with a large number of business partners, you probably want more functionalities to optimize as many complex processes as possible and gain more insight into your data. When this is the case, mid-tier solutions and services are your best choice.
Amount of business transactions
Besides the support, services, and size of your supply chain, you’ll need to take the number of business transactions into account. Make sure that you select a solution that can handle the amount of transactions you send out to your business partners.
Want to know more about EDI?
Want to know more about EDI? Read our free guide and and learn how to get the most out of your EDI solution.