By Sylwia Mierzejewska, Comarch
Electronic data interchange has been a common in B2B communications for so many years that you might wonder if it should still be in use – particularly as a great many modern technologies have appeared on the market. Is EDI effective enough to compete with them? Let’s take a closer look at what makes it a first-choice solution when it comes to data exchange and information management.
Business and EDI love one another
The facts are clear: thousands of companies around the world have developed their systems around EDI standards. Why? The answer to that question is actually simple: EDI makes business life easier thanks to automated, seamless data exchange. It allows reliable business information to be shared in real time, meaning that sending orders, informing about and confirming deliveries, booking transport, sending invoices and carrying out many more business transactions can be handled easily with EDI software. It eliminates all the things that consume time, such as human interactions, making telephone calls, sending emails and faxes, and posting paper documents. Apart from time, it also saves effort for all business partners involved in the process.
EDI speeds up the entire business cycle significantly, by automating processes that would otherwise have to be done manually and, therefore, with a high risk of human error. EDI transactions are carried out in seconds (minutes, in worst cases), compared to paper processes which may take days or even weeks to complete. Speaking of which, electronic data interchange solutions also allow companies to save money by reducing the amount of paper (in printing, copying, archiving and postage) and number of illegible or lost documents. A Matson Logistics study1 shows that using EDI can lower transaction costs by 35%.
EDI evolves with its users
At first, the only method to communicate with the use of this tool was direct EDI (in other words, point-to-point EDI) based on specific on-premises solutions. Nowadays, communication methods are constantly changing, so today’s businesses can choose from a wide range of electronic data interchange solutions such as AS2, FTP, web EDI, EDI service vendors, cloud-based solutions, or even mobile version of EDI. It’s all about finding the best answers to specific business needs. Whether you need simple EDI mapping installed on-premises, no local software at all, or a legacy system with advanced functionalities, every solution is at the disposal of any company.
EDI standards are also updated regularly in accordance local and global regulations. Modern EDI systems offer users practical functionalities which will optimize their processes today and remain relevant for many years to come. The reason for that is the adoption of innovative tools such as those supported by AI (validation, mapping, routing, and the creation of notifications and workflows). EDI business software would not have survived in global for so long without constant development.
Is there anything that EDI doesn’t do?
Electronic data interchange covers most common transaction types in various industries. It would require in-depth research to identify a business transaction that can’t be done with the use of EDI. For example, EANCOM (one of the EDI standards) covers around 60 different messages, while X12 covers over 80 – and that’s just in the scope of a supply chain management. For EDI, it doesn’t matter what industry you operate in or how many documents you exchange with other parties. Once implemented, an electronic data interchange system is easy to use, inexpensive and reliable.
Conclusions: what does the future hold for EDI systems?
It seems that EDI is here to stay as a communication method that companies are not ready to give up. EDI allows them to automate data exchange and focus on much more important, creative tasks. EDI helps improve processes across the supply chain and reduces overall paper usage. Once implemented, it measurably reduces the amount of administrative work, cuts costs, and improves relations with business partners. Setting up new communication channels, onboarding customers, creating mappings and implementing new formats of standards are things you no longer have to worry about thanks to EDI implementation. The future looks bright – for EDI and for the companies using it for doing everyday business.