Electronic Data Interchange (EDI) is a business-to-business communication system that enables the exchange of electronic documents between companies. It has become an integral part of modern business, as it improves communication, reduces errors, and streamlines processes. It can be an effective tool for businesses of all sizes. However, EDI implementation can be a daunting task, especially for those who are unfamiliar with the technology. In this blog, we will guide you through the essential questions that you need to ask yourself or your business before implementing EDI. By asking these questions, you will gain a deeper understanding of what EDI entails. You’ll also learn what benefits it can bring to your organisation, and how to prepare for a successful implementation.
EDI implementation: key questions to ask
1. Who do you want to trade with via EDI? Suppliers or customers?
EDI is a two-way communication system that enables the exchange of electronic documents between trading partners. Therefore, it’s important to determine whether you want to trade with your suppliers or customers via EDI, or both. Knowing this will help you determine the type of EDI transactions needed for EDI implementation. As well as the specific standards you need to follow, and the level of EDI integration you require with your trading partners. This information will be crucial in selecting the appropriate EDI software, mapping and translation tools, and communication protocols. These are all needed to ensure seamless and secure EDI transactions with your trading partners.
2. What document types do you or your trading partners want to trade? For example, purchase orders, invoices, advance shipping notices.
EDI is designed to replace paper-based transactions with electronic ones, and it can handle a wide range of business documents, including purchase orders, invoices, advance shipping notices, and many others.
Knowing which document types you and your trading partners want to trade via EDI is crucial because it will determine the specific EDI standards and protocols that you need to follow. Different industries and businesses have different document types that they need to exchange, and each document type may have its own unique EDI standard.
3. What system do you use? Can you get data in and out of the system?
EDI requires the exchange of electronic documents between different computer systems. Not all systems are capable of supporting EDI transactions or exchanging data in the necessary formats.
Identifying the system you use is essential because it will determine the level of EDI integration you require with your system. If your current system cannot support EDI, you may need to invest in new software or hardware to enable EDI transactions. On the other hand, if your system can support EDI, you need to ensure that you can get data in and out of the system in the appropriate format for EDI transactions.
4. How do you want to send or receive your data? For example, SFTP, AS2, HTTPs or API?
EDI requires a secure and reliable means of transmitting electronic documents between trading partners, and there are several communication protocols available to facilitate this process. For example, SFTP, AS2, HTTPS, and API.
Choosing the appropriate communication protocol for your EDI transactions depends on your specific business needs and the requirements of your trading partners. Each communication protocol has its advantages and disadvantages. Selecting the right one can therefore make a significant difference in the speed, security, and efficiency of your EDI transactions. Getting this right will make EDI implementation a smoother process for your organisation.
5. What formats can your system support?
Different EDI formats are designed for different purposes and industries, and each has its own unique data requirements and structure. Therefore, identifying the formats that your system can support is crucial in selecting the appropriate EDI standards and mapping and translation tools needed to convert your electronic documents into the appropriate format for your trading partners.
6. Do you need to receive documents from your trading partners? If so, do you need the data validated prior to inserting into your system? Should the data be incorrect when it’s loaded it may take longer to fix, overriding the value of EDI.
If the data exchanged through EDI is incorrect or incomplete, it can lead to delays in processing orders, invoices, or other transactions. It may also result in costly errors or disputes with your trading partners. Therefore, it is essential to validate the data received from your trading partners before inserting it into your system. This is to ensure that it is accurate, complete, and meets your business requirements.
Data validation can be performed using various techniques. Examples include pre-processing and mapping of EDI documents, data integrity checks, and error handling routines. These techniques ensure that the data is in the correct format and that it meets your business requirements before implementation, reducing the risk of errors and delays in processing EDI transactions.
You can download these questions for free to share with your business here or contact us to discuss how you can implement an accounts payable solution.
About B2BE
B2BE delivers electronic supply chain solutions globally, helping organisations to better manage their supply chain processes, providing greater levels of visibility, auditability and control. We’re driven by a passion for what we do, inspired by innovation, and underpinned by a wealth of knowledge. With over 20+ years of experience, the B2BE teams operate worldwide.
For more information, visit www.b2be.com.