EDI (Electronic Data Interchange) has become a critical capability for organizations of all sizes striving to trade efficiently with partners across an increasingly global and digital supply chain.
But when it comes to implementing EDI, one of the first decisions is foundational: should your EDI system be deployed on-premises, in the cloud, or use a mix of both?
Let’s explore the key differences between deployment models and unpack the most important factors CIOs and IT leaders should consider when evaluating their options.
Understanding EDI deployment models
Before diving into which model may suit your organization, let’s quickly define the deployment types:
1. On-premises EDI
In an on-premises setup, EDI software is installed and managed internally on your company’s servers. All related infrastructure and data live securely behind your corporate firewall, giving you complete control over your system.
Advantages of on-premises EDI:
- Full control over security, data, and system configuration
- Easier customization for complex or proprietary processes
- Ideal for regulated industries with strict compliance needs
Challenges of on-premises EDI:
- Requires dedicated IT staff with EDI expertise
- Higher upfront costs for software, hardware, and maintenance
- Scalability and partner onboarding can be slower and more resource-intensive
2. Cloud-based EDI
Cloud-based EDI is hosted off-site by a third-party provider. Your data and integrations live in the provider’s cloud infrastructure, and you access EDI capabilities over the internet via a subscription model.
Advantages of cloud-based EDI:
- Faster implementation and onboarding
- Lower upfront costs and predictable subscription pricing
- Greater scalability and business agility
- Provider-managed maintenance, compliance, and updates
Challenges of cloud-based EDI:
- Less granular control over system configuration
- Ongoing reliance on provider performance and uptime
- Data sovereignty and security concerns in some industries
3. Hybrid EDI
A hybrid EDI model allows you to manage critical trading partners and sensitive data on-premises, while leveraging cloud-based solutions for the rest of your partner community.
This approach is ideal for enterprises that have already invested in in-house infrastructure and skilled EDI teams but now face increasing demands for scalability, flexibility, or modernization. It offers a way to maintain control where it’s needed most while embracing the efficiency and agility of cloud services.
Hybrid EDI is also a smart choice when on-premises systems are aging, key staff are retiring, or internal expertise is becoming scarce. It allows businesses to gradually transition workloads to the cloud without disrupting core operations.
By segmenting partner management based on volume, complexity, or strategic importance, organizations can optimize costs, reduce risk, and ensure continuity while positioning themselves for long-term growth and digital transformation.
5 key factors to consider when choosing an EDI deployment model
OpenText has helped thousands of organizations evaluate and implement the right EDI strategy. Based on our experience, here are five critical areas to assess:
1. EDI volume and trading partner complexity
If you work with a fixed set of partners and predictable EDI volumes, an on-premises solution may suit your needs. But for companies entering new markets, onboarding new trading communities, or facing unpredictable spikes in demand, a cloud-based model offers the speed and scalability to adapt quickly.
2. Cost and budget flexibility
Cloud solutions shift you from capital expenditure (CapEx) to operational expenditure (OpEx). While you avoid infrastructure investments, subscription costs grow with usage. It’s important to evaluate both your current needs and projected growth scenarios. On-premises investments may have higher initial costs but could provide long-term value for stable environments.
3. Scalability and business agility
Cloud-based EDI services offer near-limitless scalability, making them ideal for businesses with fluctuating or fast-growing demand. Providers often include support for global compliance requirements, which is particularly beneficial if you’re expanding into new geographies or industries.
4. Compliance and regulatory requirements
Both deployment models can support compliance, but a cloud provider’s ability to stay current with evolving mandates, such as GDPR or global e-invoicing regulations, can be a significant advantage. Look for providers with proven expertise in your industry and geographies of operation.
5. Data security and governance
Security is always a top concern. Some organizations, particularly in regulated sectors like finance or healthcare, require full control over their data, making on-premises a preferred option. However, leading cloud providers offer enterprise-grade security, including encryption and SLAs. Better yet, they operate data centers across continents to ensure failover protection and regional data residency. This setup helps companies stay compliant with local mandates while safeguarding business continuity.
Which EDI deployment model is right for you?
There’s no universal answer. Your ideal EDI deployment model depends on your company’s:
- Size and technical maturity
- Growth trajectory and agility requirements
- Regulatory obligations
- Resource availability and internal expertise
Choosing between on-premises, cloud-based, or hybrid EDI is a strategic decision with long-term impact.
Consider not only where your business is today, but where it’s going tomorrow. With OpenText Business Network, you have the flexibility to evolve your deployment model over time while benefiting from the world’s largest B2B integration ecosystem.
Contact our EDI experts today to explore the EDI implementation model that aligns best with your business needs and growth goals.
