After over 20 years in the integration industry, we at VL see the same set of questions being asked of us time and time again. This speaks to a general need for more information for inquisitivie minds, and we at VL are always happy to answer any questions you may have about integration.
We’ve broken down the top 6 frequently asked questions VL receives into two blog posts. In this first blog post, we will be tackling these three questions:
- What are the benefits of integrated EDI?
- My trading partner recommended x solution. Will this be the best solution for my company? And,
- I bought my EDI system years ago. Why should I consider upgrading?
Keep reading to see our answers to these questions, below!
Q: What are the benefits of Integrated EDI?
Many businesses have been forced into doing EDI by their trading partners in order to retain business. Many of these businesses have opted for the easy solution in complying, choosing web-based EDI solutions. The web portal solution is cheap, and doesn’t require any buy-in from the IT department as there is no infrastructure purchase or software setup. Usually all that is needed is a web browser and a credit card.
But these web-based solutions do not necessarily mean that the business now does EDI. Yes, the web-based portal means that the business is compliant with their trading partner’s request to do EDI, but the business itself is not deriving any benefit from the EDI. An EDI scenario like the web-based solution is not integrated, and the business is only wasting money being compliant. It is only one half of the coin, and the business’ trading partner is reaping all the benefit while the business itself is not.
With fully integrated EDI, a business can be compliant with their trading partners while also reaping time and money savings for themselves. With a non-integrated EDI solution, which we explain in more detail in this blog post, where your retail partner requires a full PO, invoice, and ASN cycle, costs can run you $53 USD per order. If you do 150 orders per month, this adds up to a total cost of $95,400 USD per year, and this does not even factor in the cost of the EDI web portal solution. Properly integrating your EDI helps you reduce these costs significantly while also freeing up time that would be otherwise occupied in managing these systems.
Q: My trading partner recommended solution X or their testing partner says I have to use their solution. Will this be the best solution for my company?
Your trading partner’s recommended solution for both EDI is not the best bet in most cases. A trading partner will push a preferred solution because it serves their purposes, and not necessarily yours. The testing partner will push their solution because they have you as a captive audience. So the selected solution supplier will also push hard for you to adopt their solution because it is an easy way to enlarge market sale – the pressure sale around meeting a trading partner’s deadline.
Your trading partner’s objective is getting their supplier base transmitting electronically. Why? It saves them money! They don’t care how the data is entered at your end, they just care that they get a compliant electronic feed. But beware of charge backs. So they partner with company X to promote their e-commerce program and get you compliant.
So what is the issue?
Well put simply no one has your interests at heart. Your trading partner wants to get you live and the compliance partner wants to make some money making you compliant and hopefully convince you to be a client using your trading partner’s requirements as the stick to force you to buy their solution.
The stupidity of this approach is that it gives everyone in the industry a bad name. The high pressure sales person who preys on the supplier’s ignorance and coerces them into buying the solution, the trading partner for forcing a paid compliance testing program which in many cases has limited value because business sceanrios are not tested, and ultimately the industry itself for allowing these games to go on. All get tarnished.
You need to make sure your interests are accounted for in the solution you ultimately adopt; this means asking yourself some tough questions as opposed to blindly accepting your trading partner’s recommended solution:
- Is the solution right for me, or am I being pressured to buy something I don’t need? Can I use my existing system?
- If I am adding more than one partner to an existing solution, is it time to look at integration?
It is always worth-while to do your research in these circumstances! Don’t rush into any decisions you are not well-informed on.
Q: I bought my EDI system years ago. Why should I consider upgrading?
Some companies have literally invested in their EDI solution in the last century. While the system might still work – where ‘work’ is on spectrum of functionality – just because it isn’t broken, doesn’t mean you shouldn’t be looking into fixing it or upgrading to something better.
Often the old EDI system sits on an old PC churning away in the corner of the IT or customer service department. No thought was put into any strategy around how the EDI data was going to be used internally when the solution was implemented; the EDI system simply replaced the order taker. The truly ancient EDI systems were essentially glorified faxes, or ‘rip and read’ EDI systems.
Over the years as the PC died or the software wouldn’t run on newer PCs, people went looking for a replacement and ended up using a web portal or web based EDI system. Not much more sophisticated than the old standalone system, the new web-based EDI system became even more out of sight and out of mind, except for that pesky invoice that arrived every month for the service. At least the old software running on the old PC didn’t really cost anything – or so it seemed. Best of all, IT no longer need to be involved because it was a web site and didn’t require a PC.
The EDI system that started as an afterthought is now almost completely forgotten, even as the system itself often became an increasingly important part of the business as the business grew. Much like the selected accounting system, the poor selection of an EDI provider and EDI solution leaves your business vulnerable, and as time marches forward your business only becomes increasingly vulnerable. Eventually, the old system will fail. It is always better to proactively start the transition to a better system on your own terms then to wait for catastrophe.
If you’re considering integration and it’s benefits for your company, these are great questions to familiarize yourself with before going to the table with any potential integration partner or solution provider. If you want to read in more detail about the questions we answered above, you can check out this blog post, this blog post, and this blog post.
In part 2 of our FAQ blog post, we’ll be tackling three more great commonly asked questions:
- How do I know if my EDI system sucks?
- What are APIs?
- How do APIs work?
If you have your own questions to ask VL, submit your comment below or ask us through our Social Media properties! Stay tuned by subscribing to our blog!