Electronic Data Interchange (EDI): Resurgence on the Horizon?
A much maligned often overlooked technology is Electronic Data Interchange or EDI as it’s often commonly referred to. During the 1970’s and 1980’s it was seen as the solution to all business to business communication although high costs and many interpretations of so called standards lead to its stagnation. When all’s said and done though, EDI can drive tremendous savings and efficiency improvements throughout a supply chain and/or trading community.
If you’re new to this three letter acronym, please find the following description from Wikipedia – Electronic Data Interchange (EDI) is the structured transmission of data between organizations by electronic means. It is used to transfer electronic documents from one computer system to another, i.e. from one trading partner to another trading partner. It is more than mere E-mail; for instance, organizations might replace bills of lading and even Cheques with appropriate EDI messages. It also refers specifically to a family of standards, including the X12 series. However, EDI also exhibits its pre-Internet roots, and the standards tend to focus on ASCII (American Standard Code for Information Interchange)-formatted single messages rather than the whole sequence of conditions and exchanges that make up an inter-organization business process.
Whilst the mere description of EDI may fill you with dread, there really isn’t anything to fear. Long gone are the days where you had to employ teams of technical people and invest in expensive technology. Electronic trading relationships with customers, suppliers or partners can now be setup within hours and the business benefits reaped within days.
If someone offered you a cost effective way to reduce your average days of debt, streamline the accounts departments, improve cash flow and decrease operating expenditure would you be interested? Well EDI can help you achieve this, including sending all of your invoices electronically, properly matched and guaranteed to reach your customers computer systems within seconds.
Whilst EDI has been effectively used across the retailing for many years there are still many industries that have yet to experience its benefit. Let’s take chemicals and pharmaceuticals for example, a vertical market awash with paper documents, data and information that need to be exchanged on a regular basis. What’s more, because of regulatory and compliance issues, a lot of this data needs to be stored for retrieval as and when the moment comes.
Should the Pharmaceutical business embrace EDI though and electronically exchange structured messages in real-time with its partners, customers and suppliers, much of the cost and complexity of doing business would be eradicated.
In summary, we often look back at previous ways of doing things because we realize they had intrinsic value and with more modern thinking and advancements in technology they could be given a whole new lease of life. EDI is one such example and it’s therefore with great interest that I have been following a small secretive group of vendors who have been quietly addressing the pitfalls that blighted it’s uptake a decade ago. Dare I say it “resurgence is just around the corner”.
Are you being asked to trade with customers using Electronic Data Interchange (EDI) , then visit www.perceptant.com to find the simplest and most cost effective way via SaaS to achieve this.
