Are you being asked to implement Electronic Data Interchange (EDI)? Find out what it is and how it works.
Is a customer or supplier asking your company to do business with them electronically? If you don’t know what EDI is or don’t have in-house expertise, read on, this is what you need to know. Let’s start at the beginning, what is EDI?
What is EDI and how does it work?
Electronic data interchange (EDI) is the exchange of business documents from computer-to-computer, eliminating the need for paper transactions and the need to fax documents. Although this sounds simple, EDI documents use specific computer record formats that are based on widely accepted standards. This means that businesses can easily connect electronically to share data. However, each company is able to benefit from the flexibility allowed by EDI standards to suit their individual business needs.
Why do I need to use EDI?
EDI is now widely used across a variety of industries. In fact, over 160,000 companies in the United States have integrated EDI into their business model in order to improve business efficiencies. In choosing this path, companies that implement EDI also likely require their business partners use EDI as well in order to keep their processing succinct.
The Benefits of EDI
Implementing the EDI process into your business has the potential to provide many benefits to your business. These benefits include:
- Processing paper documents his extremely more costly than processing computer-to-computer data exchange (manually processing a paper order can cost at least $70 or more. Processing an EDI order can cost less than one dollar)
- Employee processing time is drastically reduced by implementing EDI (EDI orders can be processed in as little as one business day)
- Processing orders and data electronically yields less errors simply based on the process being completed by a computer
- Business transactions are processed faster, increasing productivity and thus reducing inventory levels, providing better usage of storage space, better inventory planning and thus fewer emergency expedited orders with excessive associated costs
The Drawbacks of EDI
Although there are very few drawbacks to the EDI process, one that must be mentioned to the business’ ability to ensure that they have the resources in place to make an EDI program work.
Because EDI processing must follow strict regulations for processing, many companies choose to outsource the EDI process over keeping the process in-house to be managed on site.
Deciding to Process EDI In-house or Outsource
At this point you are realizing that you need to implement EDI into your business. You are likely weighing your options on outsourcing EDI or implementing EDI in-house? For many small businesses outsourcing EDI is an easy, affordable and more time saving option.
Outsourcing EDI to a US-Based Expert for Small Businesses
Hiring a specialized EDI outsourcing firm is the best long-term solution for many small businesses. Why? As experts, an EDI outsourcing company already has the equipment and information your business will need to succeed, including the following:
- Software for communications, mail boxing of EDI transactions, mapping and translation
- VAN, ASYNC, BISYNC and Internet communications as required by various partners
- Hardware including a server or PC, communication devices and peripherals
- Secured office space and monitored security
- Data backups and redundant connections for guaranteed reliability
- Additional software needed if an integration of EDI transactions should be made with office systems
- Use of a VAN, which will need to be contracted for ongoing EDI transmissions
- Training of employees – Personnel must be trained in how to use the software and communication devices
- Maps will need to be developed for each EDI document type to be exchanged with each partner. These maps translate the encoded EDI record into a useable format for your business and its partners
Choosing an EDI Outsourcing Company
Integration, Inc. provides everything you need to be EDI compliant and capable in one all-inclusive outsourced package. It’s as easy as an Internet connection and an email account. That’s all Integration, Inc. needs to make your EDI processing a success.
Your business will never need to worry about software installation, software upgrades, document format translation, mapping of hundreds of field names, purchase of an additional server space, transaction communication requirements for each partner, EDI VAN fees, yearly contracts, staff training or even staff turnover.
“Integration works well with all of our major customers. The EDI (Electronic Data Interchange) set-up process is very simple on our end and we always have someone to contact if we have any questions.” – Hayden Valley Foods, Inc.
Integration, Inc. does it all for you seamlessly! Integration, Inc. specialize in resolving information technology issues confronting small to medium sized organizations. By allowing Integration, Inc. to complete your business outsourcing needs, we can enable your company to become more efficient and cost effective, thus increasing your business productivity and overall revenue. To learn more, contact www.integrationinc.com.