Part 2 of 2: What You “Need-to-Know” about Electronic Data Interchange (EDI)

Mark Canes

Last week, we wrote about the basics of EDI, and the advantages it can provide your company. As promised, we’re back for Part 2 with an overview of the opportunities EDI can provide, as well as some advice from Robin Smith of Virtual Logistics about picking a solution.

Like we said in Part 1 of this series, EDI represents a set of standards, outlining formats for how information should be electronically communicated between two parties. Oftentimes, large companies require their suppliers to follow these standards. If your company uses EDI, it opens up the door to be able to do business with these larger distributors or retailers. Furthermore, the automation associated with EDI works to reduce errors and operate more efficiently. This will allow your company to focus more energy on other parts of the business. Your team will now be able to think more strategically about growing the business or developing relationships with customers and partners, instead of getting bogged down with administrative tasks.  We also spoke a little bit about the importance of choosing an ERP system that will integrate with EDI. When everything from purchase to billing at your company must meet EDI standards, make sure you are using an ERP system that has the capability to facilitate integration with EDI translation services!

Shopping for an EDI solution can be a difficult task, so we’ve recruited Robin Smith to give you some advice. Here are some things you should know before purchasing a solution:

  • Pick the best solution for YOU. When choosing an EDI vendor, your trading partner might recommend going with the solution that they use, to ensure smooth integration. However, this recommended solution is not the best bet in most cases – be careful not to succumb to the pressure from your trading partner or a pushy salesperson.
  • Be sure to compare apples to apples! Cost is not an indicator of quality, reliability, value or suitability. Not all solutions work the same way, so make sure you are comparing the same things when you look at quotes.
  • Keep company growth in mind. Make sure you really understand your real needs when picking a solution, and avoid just responding to your current trading partner’s demands. In 2 or 3 months, you may have more requests, so don’t lock yourself into something you will regret in a year.
  • Avoid long-term contracts. You may find yourself committed to a three or four year contract with an EDI or VAN supplier, only to find that your partners want to switch to another solution six months after they signed. No one wants to be paying for something they cannot use, so be careful about contract timeframes.
  • Make sure you understand the technology and the implications on your organization. Pick a solution that will fit into your corporate culture – the change should not be have to be forced.