Electronic Data Interchange (EDI) was introduced in the 1960’s to allow businesses to communicate key business transactions such as purchase orders, advanced shipping notices, and invoices electronically instead of via paper providing fewer errors and more efficiencies. The concept was and still is great, it’s the execution that has failed. As supply chains continue to evolve and become more complex, the need for efficient and reliable data exchange becomes even more important. EDI provides a solid foundation for this exchange, however, the future of EDI must modernize the connectivity between companies in order to realize its full benefits.
A Quick History of EDI
In the early 90’s EDI became widely adopted as “the way” for businesses to exchange data. With adoption came standards and technology to assist companies in moving to this new way of doing business. Standards such as X12 and EDIFACT were introduced to help define the specifics of each type of document companies might want to exchange (ie Purchase Orders, Shipping Notices, Invoices, etc). These standards help define the data for each document and the way in which the documents need to be communicated. Technology companies arose to solve the complexities of mapping the data from your systems to this new required format and to transport the data from inside your company to your trading partner. However, as companies added more and more trading partners challenges started to become apparent.
The Challenges with EDI
One of the main challenges that every company faces with EDI is the time and resources it takes to onboard new trading partners. The average time to onboard and go live with a new partner is about 12 weeks and typically involves IT specialists, software developers, and EDI experts. This means that companies tend to invest heavily upfront in infrastructure and staff months before they can begin to monetize the relationship.
Most EDI solutions are one off point to point custom solutions, making it difficult to add new trading partners or adapt to changing business needs without repeating the same painful process over and over. Additionally, once an EDI implementation has been built, companies spend weeks to months testing and validating their solutions before going live. The current testing process is very manual and time-consuming as it involves passing files back and forth, reviewing them manually, fixing tedious issues then doing it over and over until everyone agrees.
To address these issues, it is important to adopt a more modern and agile approach to EDI. This should include the use of cloud-based solutions and API-driven architectures, which allow for real-time problem solving resulting in faster onboarding.
The Future of EDI: EDI Done Right
The future of EDI for supply chains is bright, and it requires a more modern and agile approach to implementation. Modern EDI Platforms like Orderful are on a mission to make trading with a new EDI partner as easy as flipping a light switch. To make this work the future of EDI is a pre-connected SaaS solution.
Companies that integrate with Orderful gain access to the network of pre-connected partners. The Orderful Network is a library of trading partner requirements and pre-built communication channels to anyone in your supply chain. This allows Orderful to automatically convert customer data into the proper EDI format of a trading partner, validate the data in real-time against each partner’s unique requirements, and communicate transactions immediately through pre-built plumbing. Using an API-centric approach for integration, Orderful customers are now onboarding and trading with new partners in days not months.
Orderful’s Modern EDI Platform gives companies full visibility and control of trading partner activity and provides easy-to-use web-based tools to manage and correct issues quickly. Orderful’s unique approach to modernizing EDI allows today’s company to unlock the full potential of EDI to get to market faster with a lot less overhead. Orderful is EDI Done Right.
Watch the podcast episode where we take a full dive into the future of EDI with Erik. Click here!
About the Author
Erik is the founder and CEO at Orderful, the Modern EDI platform bringing supply chains together. Prior to Orderful, Erik worked on the ground building custom EDI environments as a consultant. He went on to build his own EDI consulting firm where he realized there had to be a better way to serve his customers. This hands-on experience led Erik to create Orderful which strives to make the way companies integrate and trade data as easy as flipping a light switch.