PACKAGED EDI SOLUTIONS VS. DIY (DO IT YOURSELF)

There are a handful of approaches to EDI which include basic web forms, packaged solutions that are designed specifically to integrate directly with your business system and EDI tool kits (i.e. EDI translators with integration capabilities) that can enable your team to build your own custom integration to your business system. Each approach has its own set of benefits and challenges with total cost of ownership, scalability and supportability being key decision factors for which approach is appropriate for your business.

If your organization is currently exchanging EDI business documents with your trading partner community (customers, vendors, carriers, 3PL’s, etc.), then you understand that EDI transactions are time sensitive and integration into your business system is essential to insure that you are gaining the maximum benefits from your investment in an EDI solution. The web forms approach provides a low cost entry point for EDI however this approach does not provide integration capabilities into your ERP system. The web forms approach requires significantly more labor to rekey transactions into your business system and within the web forms for outbound business documents (i.e. PO Acknowledgements, Invoices, ASN’s, etc.). Manually rekeying transactions requires incremental labor, it’s time consuming and there is the added risk of keying errors. If your organization anticipates transaction volumes to increase, the web forms approach does not scale effectively.

Packaged EDI solutions are designed to provide out-of-the-box capabilities for integrating EDI directly with your business system. Packed EDI solutions are offered by software vendors that have core expertise in EDI and typically have general or deep expertise in integrating with your ERP system. Packed EDI solution providers deliver a full EDI solution including communications (VAN, AS2, FTP, etc.), data translation, integration and the services & support required to onboard new business partners and maintenance for existing business partner’s compliance requirements. A packed EDI solution generally will require a greater initial investment to implement compared to web forms or a toolkit approach however when assessing the total cost of ownership, a packaged solution is typically favored. This is especially true if EDI is not a core competency for your business.

Leveraging a toolkit to build a custom EDI integration to your business system is an approach that has become less popular in recent years as the number of packed EDI solution providers has increased and their offerings have become more sophisticated and feature complete. The toolkit approach may be the right approach if your organization has sufficient resources and expertise available to build an EDI integration into your business system and if your organization prefers to design an integration based on your specific business needs. Since your organization would be responsible for building the integration using a set of tools provided with an EDI translator product, typically the initial investment is less to get started however you must factor in the costs of building and maintaining a custom integration.

If your organization is evaluating integrating EDI with your business system or your organization is faced with the decision of continuing to maintain a custom built in-house EDI solution or replacing with a commercially available packaged solution, there are a few key questions that your organization should take into consideration:

1. Will your organization have the ability to adequately support a custom built solution?

2. Does your organization have sufficient knowledge of your ERP system to build a scalable and flexible integration?

3. How quickly can your organization onboard new trading partners?

4. How scalable is a custom built solution for your organization?

5. Is EDI a core competency for your organization?

 

1. Will your organization have the ability to adequately support a custom built solution?

As your organization evolves your EDI requirements invariably will evolve also (i.e. new trading partners and existing partners will modify their EDI requirements). Given EDI is typically an essential link with your most strategic business partners, your organization will need to evaluate your ability to sustain sufficient support for your custom built EDI solution. You must consider if your organization will always have access to the initial developer of the custom solution and if you do experience turnover, will your organization be able to transition the custom solution to a new resource for ongoing maintenance.

2. Does your organization have sufficient knowledge of your ERP system to build a scalable and flexible integration?

An essential component of a complete EDI solution is the integration of EDI business documents with your business system. Most leading ERP systems offer an API for integrating data into the ERP system however the API’s typically do not accommodate for EDI formats or provide the flexibility for dealing with unique EDI business partners. If your organization is not competent in integrating business documents with your ERP system, a custom built solution may not be the right approach.

As your organization plans to upgrade to a new version of the ERP to take advantage of key new features, you may find that you are unable to do so because your custom built solution may be too challenging to move forward to a new release of the ERP. Most custom built solutions require significant retooling and testing when your organization is attempting an upgrade to a new version of the ERP. You may find that a custom built solution creates barriers for taking advantage of new best of breed features and essential technology updates.

3. How quickly can your organization onboard new trading partners?

As your organization works hard to expand your footprints into new retail locations and channels, the speed of onboarding new trading partners is a metric that should be top of mind. Any retail organization or larger distributor will likely require EDI. If your organization has invested to implement an EDI solution, it behooves your organization to migrate as much of your order volume to the EDI order channel so as to maximize the benefits of EDI. If your organization has to perform both mapping and coding changes to add a new EDI business partner, the timeline to add new trading partners can be quite extensive and often your organization needs to be live in weeks vs. months. Packaged EDI solutions providers often provide pre-built trading partner kits that are built based on trading partner compliance requirements and their teams have the expertise with retailer’s specific compliance requirements to help expedite the compliance testing cycles.

4. How scalable is a custom built solution for your organization?

If your organization is anticipating growth, scaling your business effectively is always top of mind. Growth likely will be in the form of adding new strategic EDI customers in the form of new retail accounts, Amazon and other eTailers, click-and-mortar programs (i.e. Target.com, Wal-Mart.com, etc.) where your EDI solution will need to be able to support new order types, new EDI compliance requirements and significantly higher transaction volumes. As growth opportunities surface, your organization must evaluate if your business systems can support new requirements sufficiently. With a custom built solution, you may find that your organization not only struggles to cope with new compliance requirements in a timely manner, but the cost of retooling your system and the risk of not being able to onboard new trading partner requirements are far too risky.

A packaged solution provides peace of mind in knowing that they have solved EDI compliance requirements for a wide set of EDI trading partners and companies running the same business same that your organization runs. Why not leverage a solution that has solved the challenges of many companies that have invested before you to solve the same set of challenges versus taking on the risk of figuring out how to build a complex solution for your business.

5. Is EDI a core competency for your organization?

At the end of the day, most companies are focused on running their business, gaining market share and improving their bottom line. If EDI is not a core competency for your business, you may be best suited to leverage a packaged solution that provides your organization with a complete solution and access to their expertise to deal with managing EDI compliance requirements and rapidly on-boarding your new business partners.

 

Contact an EDI Specialist
Call 1-877-805-8388