In our last blog: “What is Electronic Data Interchange (EDI)?” we looked at why most companies today have deployed EDI systems to trade with customers and suppliers and what are the key benefits of EDI technology for your business. In this blog, we’ll discuss the key features and capabilities you should look for when you’re selecting your EDI solution.
What is EDI?
Let’s start with a quick recap. EDI, or Electronic Data Interchange, is the transfer of structured data, by agreed message standards, from one computer system to another without the need for human interaction. Human intervention should only be required in the case of dealing with errors, for quality review, and for special situations. It provides savings in terms of man-hours, management of paper documents and storage, as well as reduction in errors and improved speed for transactions. Since its widespread adoption in the 1980s and 1990s, EDI technology has been a corporate IT stalwart and has become the standard system for large enterprises transferring electronic documents with each other – EDI payments, EDI invoices, EDI shipping documents and much more – and improving key business and supply chain processes.
Features of EDI
That electronic data interchange definition gives little idea of the major features of an EDI system. So what are the capabilities that you’ll find in the best EDI tools? Some of the features you need for your EDI systems include:
- Widespread support for EDI standards
Over the preceding 50 years, there are a number of key EDI standards that have developed including the Tradacoms, ANSI X.12 or EDIFACT standards. In addition, industry EDI document formats have appeared to meet the needs of specific industries like RosettaNet in High Tech and PEPPOL in the European public sector. The EDI system that you choose should be able to accommodate all of these different EDI standards and the variations that appear within each individual standard.
- Widespread support for EDI document types
While EDI technology developed initially to make exchanges of EDI invoices and EDI payments more effective, it quickly addressed the business documents that underpin other key business processes. Today, EDI document types include orders, invoices, purchase orders, shipping notices, acknowledgements, remittance advice, financial statements, quotation requests, product and sales catalogs and much, much more. The best EDI solutions offer support for all major EDI documents. There are hundreds of EDI documents to choose from.
- Widespread support for communications protocols
There are a number of communications protocols that support EDI transactions and the exchange of EDI documents. AS2, ebMS, FTP, OFTP, HTTP are just a few EDI messaging protocols. To enable any-to-any EDI communications, your EDI tools will need to support all the important protocols so that you can connect with all your trading partners. The development of AS2 was important in this regard as it allowed EDI transactions to take place over the Internet – paving the way for simple web forms that opened EDI to smaller companies.
- EDI translation and mapping
The EDI system you select must include EDI tools for effective document mapping and translation. EDI mapping and translation tools will take EDI data from one format and place it into another to enable the end-to-end automated flow of EDI data from the enterprise applications of the sender (usually the buyer) and the receiver (usually the supplier).
- Easy onboarding of new trading partners.
Growing companies need to onboard new EDI trading partners quickly and smoothly. Your EDI solution, whether you choose EDI software or EDI services from a provider – especially when working with EDI providers like OpenText™ – should allow you to use predefined templates that place your information into EDI formats that can quickly connect with all your trading partners. While free Electronic Data Interchange software has basic features, the lack of EDI mapping and translation or trading partner onboarding can render these EDI solutions of limited use for most organizations.
- Scalability to meet EDI demand
The scale of your EDI commitment is likely to have an effect on the type of EDI system you decide to implement. Some Web EDI systems operate on a ‘per transaction’ basis, which can be economical on a smaller scale, say 500 transactions or less per month, but can quickly get out of hand at larger volumes. For a larger scale operation, you’ll want to look at all-in EDI solutions. An EDI network that incorporates all the EDI document standards you require becomes increasingly attractive.
- Enterprise application integration
EDI is among the highest-value integrations in your accounting system, supply chain systems and ERP environments because it eliminates time-consuming, error-prone manual effort that would otherwise be necessary to get orders, invoices and other EDI data in and out of other enterprise applications. The more trading partners you have, the more operational costs you’ll save through EDI integration.
- Value-added services
Quite often, electronic data exchange software only delivers the simple exchange of set EDI documents. However, the best EDI systems also have a range of value added services that extend what you can achieve from your EDI investment. A common service from EDI tools is secure file transfer that allows you to protect content and data containing vital corporate intellectual property. As digital transformation progresses, standard business documents are becoming larger and more varied. Managed File Transfer (MFT) allows for the secure and fast exchange of large files such as CAD or PLM files or video and rich media files.
More importantly, the move from paper to digital processes offers the potential for a much greater analysis of the data you manage. EDI documents contain some of the most important data regarding supply chain performance and the financial health of your business. The deployment of a central EDI network – with EDI integration services from reputable EDI providers – allows you to apply analytics for EDI tracking of all elements of your supply chain operations as well as identifying customer and industry trends within the data to improve customer experience, enhance new product development and increase business agility.
Types of EDI
There are many types of EDI and approaches to enabling EDI across a trading community. Whether looking at EDI for the first time or expanding an existing EDI infrastructure to support business partners across the globe, there is a method of utilizing EDI that will suit your business needs, technical capabilities and budget. These include:
- Direct EDI/Point-to-point
Brought to prominence by Walmart, direct EDI, sometimes called point-to-point EDI, establishes a single connection between two business partners. In this approach, you connect with each business partner individually. It offers control for the business partners and is most commonly used between larger customers and suppliers with a lot of daily EDI transactions.
- EDI Network/Point-to-multipoint
An EDI network is also known as a Value Added Networks (VAN). It is a private network – normally delivered via a third party EDI provider – where electronic business documents are exchanged between partners. The EDI provider manages the network and provides companies with mailboxes where they can send and receive EDI documents.
- Web EDI
Web EDI conducts EDI using a standard Internet browser. Organizations use different online forms to exchange information with business partners. Web EDI makes EDI easy and affordable for small and medium-sized organizations and companies that have only occasional need to exchange EDI documents and data with trading partners.
- Mobile EDI
Users have commonly accessed EDI either by a private network such as value added network or the Internet in order to send and receive EDI-related business documents. As mobile becomes the device of choice, EDI transactions will increasingly become mobile. There is a growing industry for developing software applications or ‘apps’ for downloading onto mobile devices and it will be only be a matter of time before you will be able to download supply chain and EDI related apps from private or corporate app stores.
- Full B2B integration
While EDI really only covers the exchange of electronic documents, it is the basis for B2B integration. This can be defined as the integration, automation and optimization of key business processes that extend outside the four walls of the enterprise. In addition to data exchange, B2B integration is based around a central digital B2B backbone and includes a whole series of value-added features such as partner onboarding, community management, Managed File Transfer (MFT) and secure file transfer.
Many larger companies adopt hybrid solutions – combining different types of EDI – to ensure they can connect to their entire trading partner communities, regardless of their size, geographic location, technical capabilities of frequency of their EDI transactions.
Why choose OpenText for EDI?
EDI providers don’t come much more experienced than OpenText. Our EDI experts are at the forefront of the development of EDI with a suite of services to help organizations, whatever their size, improve their existing processes and adopt new ones. With our software and services you can exchange a wide variety of EDI transactions with your business partners, including POs, ASNs, invoices and payment instructions.
Our flexible EDI solutions incorporates a range of key components which can be adapted according to your organization’s electronic trading requirements, including:
- EDI software and services
The OpenText B2B integration services products allow you to create, send, receive, print and manage EDI documents, as well as integrate to accounting and other back-office systems. Our EDI translators and EDI mapping tools convert messages from the data structures of your enterprise applications into the Tradacoms, ANSI X.12 or EDIFACT standards. OpenText range of products and services include everything from on-premises B2B integration software, to value-added network options, to B2B managed services.
- Industry leading B2B integration platform
EDI is the core component of OpenText Trading Grid™, the leading B2B integration network. Built on the strength of the OpenText Cloud, it connects more than 600,000 businesses worldwide that execute in excess of 16 billion transactions per year with a value in excess of $8 trillion. The network handles all major EDI document types, data formats and communications protocols as well as delivering a range of integrated value-added features.
- B2B enablers
Our low-cost, easy-to-use alternative to connecting your smaller trading partners who still send you manual transactions via phone, fax or email, OpenText Web EDI uses a simple web “forms” application where your partners can view or create common EDI documents such as electronic purchase orders, ship notices and invoices. There is no EDI software to license or install. All that is required is an Internet connection and a browser. The Web EDI forms look like the paper equivalents so there is no training required to Web EDI.
Download this EDI basics eBook to learn more about EDI and the options you have to optimize your business transactions.