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The corporate world is competitive, and keeping up with technological evolution is the only way to thrive in today’s corporate world. This calls for regular updates of communication mediums and software as well. Each day, we see new software solutions and technology rolling out in the industry, making the business processes easier and more efficient. And that brings us to EDI capable (hasn’t it become the buzzword in the corporate world?). If you are still clueless about it, we have all the information you need!

EDI Capable – What Is It?

Being EDI Capable means that an organization can take on and deploy the EDI software for streamlining the business transmission and communication with business stakeholders, such as customers, partners, suppliers, and vendors. The business will be able to send out and receive electronic documents, including ENCOM, ODETTE, EDIFACT, HIPAA, VDA, and X12. While the system offers some great features and functionalities for businesses, implementing and leveraging the system’s full potential can be challenging.

EDI creates the electronic data transmission process, which results in valuable business outcomes, such as better revenues and seamless communication. The EDI systems will include a combination of visibility, governance, onboarding, and management processes. EDI has an essential role to play in the business’s supply chain since it optimizes communication. However, it’s a complicated system since an organization has to meet various transaction protocols, security rules, communication methods, and document types.

Becoming EDI Capable – How It’s Done? 

The prime purpose of EDI is to streamline the logistics and business workflow through automation and standardization. In addition, it optimizes the seamlessness of sensitive data exchange and integration. However, attaining all these factors include specialized integration and expertise. It’s needless to say that different EDI approaches are available to meet different business demands, such as automated tools for self-management or hiring third-party experts to manage the EDI.

Outsourced EDI Vs. In-House EDI 

  • Outsourced EDI 

This is commonly termed EDI-as-a-service and doesn’t require any software and hardware system. With outsourcing, service providers manages the EDI processes, including change mapping and development to focus on the core business functions. In addition, EDI integration shows the best results when experts handle it. Not to forget, it frees up the time of IT department personnel so that they can focus on other business processes.

  • In-House EDI 

With in-house EDI, there is a need for software and hardware. In addition, the businesses will need to hire an on-site team or staff while making sure they have sufficient resources and knowledge in the EDI world. It will help with onboard mapping, and the trading partners will need an update. Not to forget, businesses have to support the EDI features and check the IT resources to ensure the implementation is on point.

The Planning Checklist For EDI 

It can be challenging to tackle the project of gaining EDI capability and requires a particular tactical approach and strategic planning. In the section below, we are sharing the steps of planning EDI, including the following;

  • The business factors, such as budget, requirement, and risks, are tallied along with the goals
  • Developing the project policies and infrastructure
  • If applicable, determining the inventory of the legacy systems
  • Performing gap analysis, depending on the potential and current use cases
  • Selecting the implementation model and format capacity of EDI
  • Identifying the need for additional resources
  • Selecting the EDI hardware and software
  • Selecting staff and defining their roles
  • Training the IT teams and EDI teams
  • Selecting the modernization strategy
  • Establishing the architecture of the project
  • Establishing the project schedule

Now that you have decided to become EDI capable, it’s important to develop a visual presentation of the entire processing system. Some of the components of this processing include;

  • The manufacturing, retail, or wholesale partner initiates the EDI process by sending the purchase order
  • The cloud system checks the orders for accuracy and is converted into the internal format, depending on the organization
  • The internal format is ingested into the ERP system with the help of API connections
  • In the case of the outgoing documents, the process is reversed

Benefits Of Being EDI Capable 

It doesn’t matter if you are running a startup or a large-scale enterprise, being EDI capable will help standardize the document transmission and communication of freight receipts, purchase orders, inventory inquiries, remittance suggestions, and payment orders. In addition to this, we are sharing more benefits of being EDI capable, such as;

  • Cost-Effectiveness 

According to research, being EDI capable will reduce the transaction and communication costs by 35%. This is because it provides the data insights that streamline the supply chain processes. As a result, the business workflows will be controllable and foreseeable (it’s a good thing for businesses as well as customers). Not to forget, standardize documents results in reducing fines due to performance gaps, payment delays, and SLAs.

  • Efficiency & Speed 

With the implementation of the EDI system, the processing times reduces by 50% to 60%. This is because it automates document transmission, promising speedy and more efficient business processes. To illustrate, the employees don’t have to manually input the data, freeing up their time to focus on other business tasks while the transmission will be done without any errors and delays.

  • Accuracy 

EDI software can reduce business errors by 40%. It’s needless to say that manual data entry into order systems and ERP will be error-free, and automation will resolve the majority of issues. To illustrate, EDI capability will reduce errors by 40%. As a result, the accessible data and communicable data are accurate. In addition, it will eliminate the chances of incorrect costs, refunds, and delayed orders.

  • Security 

EDI software systems design, promises secure functionality since it’s only accessible by authorized users. Moreover, there are tracking trails and audit trails available to monitor the flow of information. On top of everything, the data transmission is compliant with security standards and communication regulations, promising transparency and compliance.

Wrapping It Up 

Given the said benefits for businesses, EDI capability has become one of the business’s top priorities. Surprisingly, more than 200,000 businesses have started deploying it across different industries, so what are you waiting for?

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