EDI (Electronic Data Interchange) has been around since the 1970s and companies across the world still rely on EDI for their B2B transactions and data exchanges. It is considered as a go-to option for businesses to automate and standardize their communication with partners and other parties within the ecosystem, such as customers, vendors, suppliers, etc. The technology enhances the efficiency of the processes while facilitating smoother and faster transmission within the business partners. There is no denying that EDI has become an integral part of business continuity despite many predicting its demise for many years.
If truth be told, then it is not the EDI facing a decline in popularity but traditional EDI software, to be precise, that is being replaced currently. To sustain their EDI applications in this competitive and modern age, enterprises are working to improve the agility and flexibility of their IT systems, hence making a switch from traditional to cloud-based EDI solutions. Of course, the former software and methods have been a great help for the past many years, becoming a trusted solution for companies to share their data but with updated and modern EDI, organizations can conduct businesses and data exchange effectively using value-driven tools. As companies have to deal with numerous partners and clients, their data requirements, protocols, data resources, and whatnot, EDI service providers recommend cloud platforms for more flexibility and benefits over the traditional one.
Before going through the reasons to choose a cloud-based EDI system than traditional EDI, let’s discuss the challenges faced in the latter one:
Problems Faced With Traditional EDI
Traditional EDI tools and methods, such as on premise hardware, point-to-point connections, EDI VAN, etc.) are restrictive and inflexible, making B2B transactions and data exchange inefficient. Such a software slows down deployment and onboarding time, leads to revenue loss, higher, increases data processing time, and more. Therefore, companies are migrating to a cloud-based system that offers a perfect combination of enhanced business processes and improved technology required to meet business needs. Moreover, outdated EDI faces issues while managing connections and modifications with higher maintenance costs, licensing fees, training costs. In the case of Value Added Network (VAN), businesses can transfer the data securely but it lacks capabilities required to process EDI transactions integrated with a cloud platform.
Talking about point-to-point EDI integration which is an alternative to EDI VAN. It is a single connection but gets too complicated when businesses have to connect with more than three applications or systems. The exchange gets even more difficult while using different communication protocols and messaging formats as the whole process is time-consuming and resource-intensive. Also, it is neither sustainable nor scalable for your ecosystem and is an expensive solution for the B2B network.
Modern EDI integration services streamline automation and offer data transformation capabilities, enabling organizations to deal with any integration issue or challenge without making any changes in the software or hardware. It is a centralized platform that capitalizes on an EDI translator, accepting and transforming EDI and other data formats and moving data to other systems, be it internal or external.
Apart from this, there are various other reasons to migrate to cloud-based EDI now and we have listed a few of them below:
To Improve Performance and Agility
Although traditional and purchased EDI software provides customization for its functionality, there is no guarantee that it will address all your business requirements as it works more on the “one-size-fits-all” approach. Also, on premise EDI would require you to train your staff or hire employees who are well-versed in EDI. Moreover, you have to deal with technical glitches and risks whenever any new updates are introduced to the system, disrupting the entire business operations. However, with cloud EDI, the software is tailored accurately according to your specifications and regular updates are applied without demanding any additional efforts from you. All the details are considered meticulously, such as partners, protocols, document types, business expansion plans, etc. The modern system eliminates all the risks related to security and is perfect to manage high traffic loads.
To Reduce Costs
Let’s accept the fact that EDI implementation is an expensive affair but traditional software makes it even costlier, straining your budget. Hosting on-premise EDI requires a well-trained staff, resources, technology, etc., along with huge hardware and software investment. You also need to employ skilled staff to take care of changes and upgrades to cater to your changing business needs. Don’t forget the maintenance cost and long hours of business downtime during any technical issue. The cloud-based EDI system solves all these problems effectively by replacing traditional hosting. There is no need to invest a huge amount in hardware or software and you can eliminate expenses related to deployment and other operational tasks.
To Automate Business Processes
Despite various updates and advancements, traditional EDI systems can still not integrate seamlessly with all the other business systems and applications. It still requires manual intervention to establish connections and communicate with trading partners which also leads to errors. It is also quite rigid and restricted to perform a certain set of tasks. To overcome the problem of un-scalability, inefficiency, and time-ineffectiveness, companies are seeking EDI migration services to move to a cloud-based platform that can easily integrate with all the business systems, such as ERP or CRM for end-to-end processing. Using ready to build connectors, it can connect with partners’ applications without any hassle and supports automated workflows.
To Remove Scalability Restrictions
EDI consists of a standardized data format but as each member and partner has a separate version of the EDI transaction set, it must be able to support them. With thousands of trading partners, varying from industry to industry, the EDI standardization requirement will also vary. It must be able to accommodate all the fields and business transactions with each partner. However, traditional EDI is not so proficient or scalable to cater to these customized needs and support all the data requirements as the business grows. Modern EDI gets over all these hurdles and adds to business continuity. Enterprises can increase or decrease data storage size easily and simply need to pay for what they use.
To Focus on Core Tasks
As we said, EDI management demands specialized knowledge and insight into the technology. So, you either have to divert your IT team to look after the system or may have to hire a skilled team to ensure optimal operation. In both cases, you will have to pay a significant amount for trained employees. It will also compromise on the total time that IT experts spend on the key tasks, which are more strategic and core to your business. With Cloud-based EDI software, you get access to an already trained and experienced team. Rather than paying to hire competent staff, you just pay for the services you avail. Also, your team can invest its valuable time and knowledge on the key projects.
Conclusion
Empower your business and respond to ever-changing trends by migrating to the cloud-based EDI solution. Although it is a positive and beneficial change, we can understand that it is a big step that involves many aspects. But do not hold yourself back and switch to the cloud platform now. Rest assured that the benefits and improvements that your business will witness are worth the investment and efforts.
Author’s Bio: Scarlett is associated with the editorial team at A3logics, an enterprise software development company. She loves to explore new technologies and is often found busy with documenting the details of the technology used in different development processes. She has a keen interest in the latest technologies and when not busy with her technical writing work, she is found enjoying her coffee at the nearest café with a book in her hand.
