EDI Software Buyer's Guide
EDI Software: A Primer Before You Buy
Electronic data interchange (EDI) enables the system-to-system exchange of data found in business documents like invoices, purchase orders, and shipping notifications to name a few. Businesses have used EDI for decades to improve operating efficiency and to strengthen coordination with external trading partners.
Despite these noted benefits, just over half of the large and mid-sized corporations in North America reported using EDI around the turn of the century. But those figures are growing. Market penetration among small businesses, which was negligible twenty years ago, has gradually increased with ownership-cost reductions due, in part, to the advent of the Internet. Since 2007, more than $2.5 trillion in transactions are conducted annually through EDI.
Industries Using EDI Software
- Retail: Most major retailers now send and receive invoices and purchase orders via EDI.
- Automotive: Suppliers in this sector have used EDI longer than in most industries (30-40 years), primarily through valued-added networks (VANs).
- Logistics: Though technically an API, Amazon MWS has dramatically influenced the digitization of eCommerce operations, affecting migration toward EDI.
- Healthcare: This industry has moved reluctantly to EDI in recent years, largely due to the Health Insurance Portability and Accountability Act (HIPAA).
- Government: Governments and governing bodies all over the world have taken on eInvoicing with their suppliers using a form of EDI. The U.S. will be next.
Two Traditional EDI Models
The technology behind EDI certainly isn’t new, having been developed by the military just after World War II. That said, commercial application of EDI really didn’t gain widespread traction until the 1980s. Early systems required a lot of in-house expertise and knowledge. With these systems came standards (now including X12, EDIFACT, UBL, and others) that shaped the format in which information was sent and received.
Most EDI solutions follow two distinct models:
Point-to-point integration: Business-to-business (B2B) communication software installed within the internal corporate environment allows for flexibility to control and have full access to individual connections, yet it requires significant organizational investment in terms of time, money, and professional development.
Outsourced integration: Third parties, called interconnects, offer businesses managed services and a simplified process for EDI. Although organizations inevitably lose speed in establishing new connections and visibility into existing ones, third parties (like VANs) test and manage EDI connections on a company’s behalf, reducing infrastructure investment and overhead expense.
EDI Software vs. iPaaS: A Modern Approach
EDI software has become more nimble and (at the same time) powerful in recent years. Today, integration has moved to the cloud, connecting data flows with “any combination of on-premises and cloud-based processes, services applications and data within individual, or across multiple, organizations.” Research giant Gartner calls this class of service providers “integration platform as a service” or iPaaS.
iPaaS platforms generally assimilate into any system; integrate with any flow of information; and connect via any kind of protocol, with any kind of format, to any kind of system—whether they be installed, third-party, or cloud-based software / systems. Plus, updates never impact the configuration of your infrastructure because they are made behind the scenes and integrated directly into the platform.
Purchase Triggers: Why Buy EDI Software?
Companies with management that decide to invest in securing and implementing EDI software usually fall into one of the following three categories:
Compelled Business Case: One of the more common partnerships in EDI is the buyer-supplier relationship. In particular, large buyers (sometimes referred to as “hubs”) tend to wield disproportionate influence in a buyer-supplier partnership In fact, some estimate the ratio of spokes-to-hub (see below) in EDI to be somewhere in the neighborhood of 125:1. When suppliers have few options to reach their customers, they more often than not meet the demands of their buyers. Walmart, for example requires suppliers to transmit invoices electronically through EDI, using either a WebEDI or AS2 communications protocol. Furthermore, buyers want suppliers to do EDI well. Approximately 80% of respondents in a recent survey said their buyers run an EDI compliance program, which include penalties, and 3% have been fined over $100,000 for compliance over the past year, according to Inbound Logistics.
Replacement Business Case: As is the case with most technology, maintaining aging infrastructure (whether hardware or software) can be costly. Required upgrades, failing systems, limited features, and clunky UIs can motivate companies to look for better EDI software options. Quite often, enterprises searching for a more modern approach to EDI are looking to streamline and expand their integration activities, such as was the case for label and graphics leader Avery Dennison.
Efficiency Business Case: Corporations that are on a growth trajectory, which includes an increasing number of trading partners, value the efficiency benefits of EDI as described by Forrester in a report called The Future of EDI such as:
- Reducing the order-to-cash cycle time by 20%-plus
- Lowering transaction costs by at least 35% by eliminating expenses associated with paper, printing, reproduction, storage, filing, postage, and document retrieval
- Improving data quality by delivering at least a 30-40% reduction in transaction errors
Another reason for EDI in today’s commercial environment: Even business customers are behaving more like consumers, requiring smaller quantities of product at a faster pace. Manual processing of such requests—especially for larger suppliers—are challenging to manage with unpredictable demand.
Barriers to Implementing EDI
Notwithstanding a growing market movement toward EDI, some lingering hesitancy to digitize B2B transactions persists in the corporate psyche today. For example, nearly a third of companies surveyed reveal that their trading partners are more prepared for EDI integration than they are, according to a Supply Chain Quarterly article. Here’s why some companies have historically shied away from traditional EDI software:
- On-boarding New Partners Takes Forever: When businesses seek to establish a mutually beneficial relationship, the months required to typically create and test a connection can seem like an eternity. Delays in on-boarding are typically related to under-communicating among a web of stakeholders that include the initiator, partner, and EDI service provider. Sometimes organizations eager to realize the benefits of EDI find changes will be required to internal systems, which tends to make corresponding IT teams nervous and hesitant to pull the trigger on implementation.
- IT Resources Have to Be Diverted: The “IT bottleneck” commonly found in most businesses today can make companies think twice about allocating precious technical resources to EDI software implementation. Not only does it cost money to use internal teams (which are overworked and pulled in several directions), an implementation requiring several partner connections may require outside resources to complete. Most large enterprises have enough experience outsourcing IT-related projects to know such a major undertaking could end badly.
- Regulations Create Disruption: It’s always easier to alter a paper system than a digital one (see HIPAA, tax, or customs regulations). At least that’s how the thinking goes. Uncertainty in the regulatory landscape can cause businesses to place more weight on the risk of increased complexity in the short-term above that of the long-term efficiency gains the organization might achieve. In short, they get cold feet.
- Partner Customizations Destroy Value: Business partners often have varying needs, including different formats and transmission protocols. In fact, something as seemingly simple as a purchase order can be vastly different from one partner to the next. Customizing EDI software to meet wide-ranging needs is costly. It’s even more irksome to pay service providers to make regularly occurring minor changes.
- Constant Upgrading: Like it or not, commercial software changes—regardless of whether it’s for commerce, data warehousing, shipping logistics, sales and marketing, or enterprise resource planning. Integrating dozens (if not, hundreds) of these systems is daunting, even before realizing the latest update could cause compatibility issues with your EDI software.
- No Visibility: A good deal of traditional EDI software resembles a black box, especially systems managed by third parties. Quite often a lack of knowledge about how to access transmitted data exists. Corporations are often reluctant to give up control of their own and confidential partner information. With some EDI service providers it may take days to not only track down errors but also create a solution to fix them.
Key EDI Software Features to Consider
Many of the businesses that have pushed through their own obstacles to implement EDI have found remarkable efficiency gains. For example, a leading auto-parts supplier was able to reduce e-commerce-related operating costs by as much as 60%, which eventually led to tripling the number of customers the company could integrate with. Another financial tech company found that implementing the right EDI software solution allowed them to close more sales because they could on-board clients more quickly without sacrificing compliance.
These companies (and others) identified and put in place EDI software with four features critical to B2B integration success:
- Agility: Today’s evolving business integration landscape requires flexibility to handle a variety of formats and transfer methods. EDI software shouldn’t restrict the type of partner and system connections, nor the data format. Having an agile system that can accommodate many different formats and protocols could be critical, as suppliers to the UK government’s payments office can attest: In June 2017, the department closed down its EDI-based channel in favor of another format and transfer technology.
- Up-to-date: Because software connected to the corporate integration environment is constantly updating, an EDI software solution needs to keep pace. This may mean favoring a cloud-based solution over an installed one. Aside from ongoing compatibility challenges, installed products also tend to become more fragile and volatile over time and may even eventually lose technical support. An ancillary benefit of an iPaaS platform is anytime, anywhere access.
- Transparency: Superior platforms provide real-time information about the status of electronic exchanges, including when messages are sent, received, as well as their current stage. Modern systems should confirm when partners receive documents and communicate when transmission errors occur and how to address them.
- Control: EDI Solutions that improve access and workflows among the partner integration team will also help remove IT bottlenecks. These best-in-class products should be simple enough for the business user to manage and maintain all B2B integration activities in-house. Another benefit of having an easy-to-use platform is confidence to grant a trading partner permission to access and manage their exchange communications on it as well.
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More than EDI software, Babelway is a pioneering Integration Platform as a Service (iPaaS) that automates business-to-business data and document exchange. Babelway not only allows you to easily build and manage your EDI and eInvoicing connections but also seamlessly integrates unrelated information sources, databases, and applications with trading partners that use a variety of technologies and protocols to send and receive data. With Babelway, you can: • Empower business users with intuitive tools: No coding or programming is required to configure Babelway. You can set up new connections by simply pointing and clicking. • Remove barriers to tighter partner integration: With Babelway, you can digitize structured documents sent by lower volume partners without their direct involvement. • Exchange data using any format or protocol: Send and receive all of your partner data in XML, JSON, CSV, X12, and other formats through a variety of gateways, including AS2, HTTP, SAP, and others.
ProEDI Offers an on-premise EDI Software Solution that gives your organization Unlimited EDI Translation capabilities in an Automated fashion. The EDI Maps are created from the ground up to align with whatever type of backend system your organization utilizes. This can be an ERP System, SQL Database, Accounting Package, or Custom In-House Software. You can elect to write your own EDI maps with our full version, or have our team create them for you as needed with the ‘Light Edition’. Either way, you will also benefit from our old-fashioned US-based Support that has been serving small businesses with EDI solutions for 25 years.
EDIConnect facilitates computer-to-computer exchange of business documents in a standard format between trade partners. With capabilities for incoming file translation, acknowledgment generation, outgoing transaction construction, trade partner management, process orchestration and scheduling, EDIConnect can fulfill the most demanding EDI needs.The transaction builder features a drag-and-drop interface to build complex, hierarchical transactions. With instant preview, users can identify and resolve mapping errors in real time. The data is then validated against an EDI format and sent to the partner. EDI standards like ASC X12 and HIPAA are supported. Users can also build custom transaction sets according to partner requirements.
EDI2XML is a cloud integration service, to empower companies of all sizes to integrate systems and data with their business partners, including EDI with all its standards and formats (X12, EDIFACT, RosettaNet, customized format…)Customers of all sizes entrust us with their EDI and data integration projects and appreciate our 20+ years of expertise in the EDI space.To see the advantages of our cloud-based service, you can click hereLooking for an on-premises EDI solution? We are here? EDI2XML can be deployed on-premises
AFFORDABLE MyB2B makes EDI as easy as email. Turnkey solution cures EDI headaches. Connects with ANY EDI customer. Includes all document types and ready-to-print barcode labels. Cloud based for no software worries. Web forms are fast, even with 100's of documents. Optional integration with almost any system or 3PL. Service you can count on. No long-term contract. No hidden fees. Join 1,000's of satisfied clients enjoying exceptional service and better pricing. Get a fast free quote today.
EDI Advantage is the market leading EDI integration solution and the reason for that is no secret: EDI Advantage gives you the most tools to reduce your document processing time while automating procedures that dramatically lower your overhead costs. Completely integrated with Sage 100, EDI Advantage lives right in your module folders. Select the modules you need and they display like they were built-in all along. We built the industry’s most robust translator right into EDI Advantage. There is no need to fumble around with 3rd party translators or pay extra fees for these services. EDI Advantage is compatible not only with VAN communication services, but also with AS2 and direct FTP connections. So when your trading partners offer the option to use AS2 or direct FTP (as many do), you can bypass the VAN, and the VAN fees.
EDI Engine™ was developed after many years of experience implementing EDI solutions in the field. It was carefully designed with the specific purposes of making EDI easy with a full featured and scalable engine. The software is versatile enough to work in both stand-alone mode and also in scenarios where a more sophisticated integrated operation is required. EDI Engine™ has a tremendous growth path for small businesses and large companies that run thousands of transactions per day with numerous trading partners.
We know that your EDI operation is unique and requires customizable features to help manage day-to-day business within your organization and trading partners. Unlike most EDI software solutions, EDI/HQ™ is intuitive, integrates with most back-office systems, and provides enhanced visibility into transaction management.
AccellosOne EDI for Dynamics GP is the only EDI solution built exclusively for Microsoft Dynamics GP. Embedded within Microsoft Dynamics GP, AccellosOne EDI for GP allows you to process EDI transactions within the GP Sales Order and Purchase Order Processing modules. Our solution streamlines your EDI workflows so that your employees can process transactions efficiently and with greater accuracy without having to be EDI experts.
Axway 5 Suite gives you the power to integrate, secure, manage and measure all of the data flows that drive your business interactions, so you can get closer to your customers and work smarter with your partners. By breaking down barriers between applications, departments, locations and user communities, you can move from the chaos of point-to-point connections to a proactive and predictive environment where you control and optimize the flows of data that impact your business.
DiWeb offers an advanced, cost-effective, hosted solution, to instantly become EDI compliant with your trading partner community. Transactions are completed, validated, and transmitted effortlessly. Real-time visibility of all documents throughout the entire supply chain are built into the web application at no additional cost. Seamless integration is available to/from any backend application such as your accounting package.
When landing an account with a hub or retailer that mandates you do EDI with them, it can be a little intimidating. eBridge Connections is experienced in helping businesses become compliant with a trading partners' request in a fast and efficient manner.
We connect you to your greatest opportunities. Like thousands of our customers, you’ve achieved great success by winning new business. The HighJump platform will help you maintain and grow your largest relationships by optimizing your supply chain processes. Our customers increase order processing efficiencies, and reduce operating costs by utilizing our affordable, easy-to-use and trusted solution.
CovalentWorks provides EDI services for small companies that need to do business with their large-company customers. With the MyB2B small business EDI solution, your company can easily implement EDI and become compliant with any customer.
RedTail EDI provides the benefits of world-class trade compliance without buying EDI software or hardware or adding staff. RedTail takes responsibility for your EDI success – every transaction, with every trading partner, every day – beginning with setup and testing of your trading relationships.
Our easy-to-use interface helps our clients work with major retailers including Amazon, Macy’s, Safeway, and Nordstrom. Foundation 3000™ is proud to be listed as a suggested EDI provider of Nordstrom and offers electronic data interchange compliance with.
The formula for business integration success with SEEBURGER is derived from a simple concept: “Single source – complete control”. SEEBURGER Business Integration Suite provides an open platform that is designed to easily integrate into existing infrastructures. And it’s open interfaces enable the platform to be supplemented and/or expanded using components from other manufacturers.
Leverage a complete EDI and XML processing platform that enables you to achieve EDI integration and compliance in an efficient and cost-effective manner. Our solution-oriented approach takes the risk and expense out of EDI integration and compliance efforts.
EDI LINK provides the bridge between EDI and the accounting system. EDI LINK generates sales orders from your received purchase orders. EDI LINK automatically converts your invoice into an electronic document that is available for transmission back to your trading partner. Manual entry of EDI information is eliminated along with possible errors and wasted labor.
SkySignature is an online Digital Signature application. Fast, Easy and straight forward. Free for personal use. Very flexible and intuitive. It is fully loaded with many helpful features and PDF editing tools such as "type anywhere" capability available exclusively only on SkySignature.com. More features such as Sign-Here tags that can be dragged and dropped onto the document. Allows to create a new PDF document out of the individual pages from existing PDF Documents. SkySignature uses a custom, unique advanced encryption algorithm to ensure security. Visit www.skysignature.com to sign up for free and discover how easy it is to sign a document online.
Data-Files containing list of procedure codes and a corresponding list of supporting (and in a few cases, non-supporting) diagnosis codes - based off of CMS' National Coverage Determinations, and Medicare Administrative Contractors (MAC)'s Local Coverage Determinations.
Gain ERP offers enterprise class Accounting, Billing, Inventory and SaaS model services for the SMB market. The team leverages open source technologies and Google Cloud Technologies to lower project costs and strengthen the customers business.
VL OMNI provides agile and scalable SaaS data integration (including EDI). Accelerate Growth with VL OMNI: Your trusted integration platform for real-time accurate customer order data, shipment details, inventory, and prices.VL OMNI is an agile point to multi-channel data integration service. Over 200 businesses trust VL OMNI to move data seamlessly through their infrastructure as they grow, expand and accelerate their business.
EDIAdmin provides end-to-end, fully managed and automated EDI and ERP iPaaS cloud solutions that empower business users and IT stakeholders to efficiently respond to EDI data challenges in real time. Synchronization of the EDIAdmin CHIP platform and world-class service, developed through over 20 years of B2B experience, allows EDIAdmin to deliver solutions that reduce risk and resource dependence while maximizing the client bottom line.
Vantage Point EDI provides a complete EDI and XML processing platform that delivers broad and deep document integration to organizations that use supported ERP solutions in which we are experts. In addition to integration we provide ongoing partner compliance in a highly cost-effective manner.Vantage Point is certified for Microsoft Dynamics 365, AX, GP and NAV as well as Macola ERP. Our solution-oriented approach takes the risk and expense out of EDI integration since it is a setup process without ERP customization.
When was the last time you re-evaluated your EDI integration strategy? Ensure you're leveraging the latest technologies with the Liaison ALLOY™ Platform, which offers flexible cloud implementation options, fully secures your data at rest or in transit, and provides real-time visibility into data flow.
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