Why do I need an EDI service provider?
EDI (Electronic Data Interchange) is the system-to-system exchange of business documents in standardized electronic formats between business partners. EDI replaces other methods of sending business documents, such as paper documents and emails, with electronic messages. Further, EDI enables transfer of the documents directly between computer systems without any manual labor.
There are many reasons why you should use EDI. In this article we will try to answer why you should use an EDI service provider to help you.
The demand for EDI is increasing
The use of EDI for communication between business partners is becoming increasingly relevant as more businesses realize the many benefits it entails.
EDI allows businesses to exchange trade information quickly and efficiently - directly from their internal systems. This further reduces the need for manual processing of documents and ensures a significant improvement in data quality. The use of EDI also helps businesses reduce costs by streamlining processes and eliminating the need for paper documents.
With faster response times and fewer errors in the dialogue between the parties, this digitalization will often also lead to improved business relationships.
The fact that more and more companies prefer this way of communication also leads to a self-reinforcing effect, as the value of communicating through EDI increases as the number of business partners using EDI grows. Once a company has established EDI, it will often demand that its business partners (typically suppliers) also communicate through EDI.
If you want to take part in the digitalization of supply chains, optimize and streamline your business processes, and ensure high quality in the communication between you and your business partners, then EDI is the solution for you.
An EDI provider is a specialist
A full-service EDI provider will have the necessary expertise to handle the complexity of EDI and will be specialized in all aspects of the EDI process. The provider will offer services that are difficult and expensive to establish on your own, as it would require both software, specialized competencies, dedicated employees, and project management to efficiently set up communication between you and your business partners.
Think of the EDI service provider as a highway for delivering documents to- and from your business partners. On your side, you can define how you want to send and receive the documents, and the service provider will manage the technical mappings required to satisfy the needs of your business partners. The EDI provider also has access to local, regional, and global networks through network access points and interoperability agreements with other providers. This will ensure that communication flows as it should, without unnecessary obstacles.
You can also rest assured that the EDI provider will help you when your trading partners change formats, new standards are established, or new regulatory requirements for document exchange or security are introduced. The provider can further arrange the onboarding of your trading partners and manage the technical dialogue around exchange formats and setup of EDI.
By using an EDI service provider, you get access to the expertise and resources you need to be able to trade professionally and electronically with other businesses.
An EDI provider will cover your current and future needs
An EDI provider should not only meet the needs you have today, but also be a good partner for you and your business over time. It is therefore significant that you thoroughly evaluate and coordinate your company’s overall need for EDI before entering a collaboration with an EDI provider. A professional EDI provider will be able to advice you both ahead of an agreement and in the years that follow.
By choosing a single provider to cover several (or all) the EDI needs in your company, this supplier can build and aggregate expertise in your business over time. Therefore, you should look for a provider that can cover all the business processes where you may want to use EDI, even though you initially only consider support for some of the processes.
For example, you may look for an EDI provider to help you receive electronic invoices right now. In this case, you should also ensure that the provider you choose can support your purchasing process in the future. This way, you get the most out of your investment and collaboration with the provider.
How do I choose an EDI provider?
Once you understand the needs in your business, you can narrow down the list of potential EDI service providers. The providers often have different industry focuses, services, and business models, and some of the providers may be more suitable than others to meet the needs of your business.
An assessment of EDI providers may include criteria such as:
- Quality of customer support
This list can be extended, and you know best what is important to your specific business. However, by taking some time to assess your current and future needs, and then find an EDI provider who can help you, you will be able to maximize the benefits of EDI and streamline your business processes.
Would you like some more specific guidelines on how you can evaluate potential EDI providers? Download our checklist for free here: