Let’s face it, we know the need for EDI integration isn’t going away anytime soon.
Whether you’ve been self-managing your own integrations, find yourself in need of a new solution, or are totally new to the world of EDI, the question of in-house vs outsourced (or a mixture of both!) is a long-term, high-impact decision.
There are many advantages to using an EDI technology workflow, such as:
Eliminated manual data entry errors
Far faster document processing, exchange and conversion
Reduced costs, as a result of far less manual work and less work correcting errors
Better relationships with business partners and customers
Many vertical industries use EDI to streamline their business operations, such as healthcare, technology companies, government agencies and insurance. We have extensive experience with helping the top healthcare technology companies with integrating their EDI files. Read more about how we help healthcare claims processing companies.
This is how you can easily integrate EDI data into your business systems and worfkows. In this video, you will see how we are helping enterprise-size businesses eliminate all manual EDI data entry and automate these processes.
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EDI integration is the process of developing an entire EDI workflow between data trading partners. The main aspects of EDI integration are:
Who? Determine the trading partners with which you are going to be transferring business data.
What? Know exactly which EDI documents or files are you going to be exchanging with your trading partner.
How? Settle on which protocols and technologies are going to be used to send messages.
Where? Know the endpoints (or IT systems) needed to transfer and process EDI data. For example, which data integration software, ERP, or sales system will be used?
Which? Determine which EDI standards and formats (X12, ANSI, XML, EDIFACT) the files need to be in.
Once the main aspects are decided, data files are converted and normalized into a file standard determined by both companies (as the diagram above shows).
Once a business gets files from their partners and the files have been converted via EDI technology, the business can now use those files as they are in a native, standard format. EDI integration can be performed in-house, or it can be outsourced with a specialist or company who performs software as a service.
Here are just a few of the ways that EDI integration is being used by companies in every industry:
We have experience in integrating EDI in many companies' data workflow, and there are basically three flavors of integrating this solution:
As a result, this form of integration ends up with a business managing every individual connection that a partner has, eventually resulting in thousands of connections. This can be a very complex undertaking without using a standardized protocol.
As this type can handle a very large amount of connections, direct EDI integration is a good choice for a scenario that involves a great number of integrations with lots of data being moved back and forth.
The first step in this version of EDI integration begins when the message and / or specific files are transferred from their ERP system to the VAN or broker.
Then, the broker receives the message, converts the message or files into the various formats preferred by their suppliers or customers. Finally, the broker sends the message and files to the end customers or suppliers.
Meanwhile, they can use a VAN to handle EDI transfers the rest of their customers. This method of integration needs a business to be flexible as they need in-house resources, knowledge, and solutions to pull it off successfully.
Leveraging EDI and EDI integration for B2B transactions gives many advantages over other modes of exchanging data. Whether an organization is on the enterprise level or on the smaller side, these advantages can be reaped by many types of businesses:
Our integrating EDI methods with top healthcare technology companies has resulted in much quicker revenue and business cycles. Through EDI transactions that are completed in minutes, workflows can be shortened by many days.
Significant time and money can be kept in-house by automating processes that were complicated and relied on paper processes with manual work. Even if a business moving from one EDI partner to a more capable partner can see noticeable improvements and quick ROI with electronic documents.
Automating the workflow greatly reduces the overall amount of manual data entry and paperwork needed. From exchanging files with business partners, to converting and integrating data into business systems, leveraging EDI integration simplifies the process and prevents many manual errors.
How are your EDI partners improving or hurting your business? Quick integration of electronic data really enhances reporting and traceability.
With vast and errorless data that's easily available in your business information systems, you can see how your EDI partners are affecting your business without much time or work. That leaves more time for focusing on your internal operations.
Customer Satisfaction
Automating EDI increases customer experiences and satisfaction through giving a new innovative way to make transactions much faster with no manual errors. This strengthens supplier relationships, makes products more reliable and improves service delivery.
The first step in making the decision is to take a good, hard look at whether you truly need EDI at all.
Maybe there any EDI alternatives, such as these:
Maybe an existing partner has a new integration capability
The trick here is to not add unnecessary complexity while identifying new opportunities.
The second consideration is the business value of the proposed integration. Because EDI integration isn’t just a purely technical necessity, take time to analyze the impact of the proposed integration to the core mission of the business. Successful integration is more about strategy than choosing a solution.
A third consideration is your organization’s appetite to outsourcing. Do you outsource more or bring more of this type of work in-house? Your organization's culture plays a strong role in the decision.
There will be onboarding fees, data mapping fees, and transaction fees at the partner or document level.
Finally, how critical is the EDI integration to increasing your competitive advantage and maintaining important strategic partnerships? Mission-critical integration is something you’ll probably want to bring in house EDI integrations.
EDI is a decades-old technology. However, it is still alive and well in B2B data processing. While APIs are becoming available, most supply chain third-party transactions still involve EDI. And if EDI is a new requirement for your organization, it’s probably at the request of a valued business partner, or the organization’s demand to expand B2B offerings.
Some even require EDI OCR (optical character recognition) abilities.
EDI data such as purchase orders, invoices, and master data is exchanged in multiple formats including, PDF, ASC X12, XML / ebXML, ISO 8583, and RosettaNet. EDI provides efficient communication between B2B organizations.
B2B data integration touches core business processes and strategy. Success hinges upon subject matter experts (SME) who are intimately acquainted with your partner relationships and the business-wide impact of accurate and timely data integration.
If you don’t have the technical resources to sustain the integration infrastructure while owning and delivering the needed business outcomes, EDI outsourcing providers may be an attractive choice.
If your organization controls the EDI data formats and the majority of your partners share the same formats, an outsourced integration solution is likely a good fit.
One bit of good news if you are looking to build EDI integrations yourself is the growing B2B gateway, and enterprise integration platform as a service software markets:
B2B gateway software – middleware supporting integration within your ecosystem of trading partners, software applications, and endpoints; and centralizing data and process interoperability
Enterprise integration platform as a service – connecting multiple endpoints including application data, APIs, and both cloud and local services integration
While these aren’t EDI integration delivery tools, they are technical building blocks for creating your own integration solution.
There will be emerging data technologies for the foreseeable future, so there will be possible threats to replace or to force EDI integration to evolve for a very long time.
So here are two factors that could certainly push EDI solutions to improve for years to come:
Future EDI could leverage blockchain to add more visibility or a shared version of truth among trading partners to prevent chargeback confusion. It won't replace current EDI software but will most likely be used as a component to boost them and other B2B technologies. But, as everything with blockchain goes, believe it when you see it.
The need for quality IT department talent is only going to increase. As more organizations utilize EDI integration and more B2B software, this demand will only grow. But will the supply of quality help domestically keep pace with the demand?
The lack of cloud and IT skills costs organizations $258 million every year, according to the London School of Economics. There are only so many options to tackle this problem, and one of them is outsourcing those IT services. This will address the problems of short staffing, but will also bring the benefits of decreased overhead costs and the possibility of 'round-the-clock help.