Typing information into the computer takes time. The more manual entry, the greater the potential for input errors. Manual entry of information may be required when starting with a paper-based process, but double- (or triple-) entry of information makes little business sense.
In this day and age of technology, business adoption of EDI is more important than ever. Manual data entry is being eliminated and EDI is the foundation.
EDI stands for Electronic Data Interchange. EDI is the use of computer and telecommunication technology to move data between or within organizations. EDI is represented by structured information that can be transferred from one program to another without manual intervention.
Why would anyone ever need EDI?
If you have ever thought about doing business with a big box retailer (Walmart, Home Depot, Costco, Bed Bath and Beyond, etc.), then you probably need EDI. If you have ever ‘googled’ EDI, you get about 137,000,000 results. Welcome to the world where people speak in a completely different language, with lots of numbers…810, 850, 856 and about a thousand more. EDI can be complex and you need to understand what it is, why you need it, what it will do for you and how much it will cost.
In its basic form, EDI allows you to receive purchase orders from a customer electronically and have those purchase orders come into your system as a sales order automatically. When you prepare the shipment, it will send an advanced ship notice to the customer that tells them to expect the merchandise. Finally, it allows you to send the invoice to the customer electronically, to hopefully get paid faster. It sounds pretty simple, but each retailer has their own set of compliance rules and can charge back actual $$$ when their rules are not adhered to.
One of the most important subsets of electronic commerce today, EDI is the technology that helps two parties exchange information around a commercial transaction. The main goal of EDI is automation of business processes, which is among the first fundamental steps in business transformation.
Solving problems inherent to paper-based processes, EDI enables reengineering of business processes and information flows
Delays in activity performance and access to information are often due to paper-based processes, where transportation, storage and retrieval of documents costs valuable time. Labor costs are also higher with paper-based processes, unnecessarily increasing overhead costs for document processing and handling. Non-EDI systems also tend to be more error-prone because information is keyed multiple times, and because documents are transported, stored and retrieved by humans.
Cutting costs is among the most notable benefits of implementing EDI, centering on doing away with the use of paper while automating key business transactions, saving both time and money.
Using EDI helps to structure information and workflows, increasing efficiency and performance in a variety of areas. EDI permits access to a potentially vast amount of detailed transaction data that can be used for automated processing and analysis. More data and better insight can help the business respond more quickly to changing market conditions and customer demands.
Aside from cost-cutting, what are the main benefits to the business that implements a quality EDI solution?
- Improved service: Processing time can be reduced to seconds, and greater efficiency and responsiveness makes for happy customers
- Increased productivity: By reducing or eliminator paper processes and embracing electronic transaction processing, businesses can handle more operational activities with the same (or fewer) human resources
- Minimized errors: Mistakes in data entry or order taking can be significantly reduced (if not eliminated), and structured data removes the need for “interpretation” of the information
- Better status information: Replacing paper with electronic documents makes it far easier to keep track of activities, which is why EDI solutions ensure traceability of transactions that paper tracking does not readily provide.
An integrated EDI solution enables more efficient, seamless communications between all participants in the supply chain. Removing the need to re-key data and reducing the need to rely on human manual processes, EDI systems connect orders and invoices and shipping and returns… and all the trading partners along the way.
Mendelson Consulting works with B2B Gateway, providing clients with the EDI and electronic order management systems that propel the business to the next level. Contact us today to learn how we can help your business do more in less time with transformative solutions like B2B Gateway.
If you are looking at moving to EDI or are currently using EDI and are not maximizing its value, give us a call to discuss how to best implement, modify and use this essential business tool.
The sooner you get started, the sooner you stop wasting time and resources and begin to see the benefit!
