When it comes to EDI service providers, less is more
How to optimize your EDI software implementation
I’ve seen it many times: often business expansion and acquisition leads to organizations with multiple business units on multiple continents. Each has its own EDI service provider or – even worse – portfolio of EDI service providers. Alternatively, organizations often gain new EDI systems as they extend the business with new customers and suppliers – implementing new EDI software solutions as trading requirements dictate.
We recently experienced a situation like this when a large enterprise approached OpenText™ to help consolidate its EDI capabilities. The company had over 200 separate EDI Value Added Network (VAN) providers. Each EDI contract had its own capability, costs, performance and terms. The company had created EDI data silos throughout its business where very little information sharing or interoperability was possible. It felt like they’d reached that point through a process of osmosis rather than planning.
Move away from building inefficiency and regain visibility
However, cost and complexity are not the greatest dangers of a fragmented EDI software system. This also affects your ability to conduct business, which will ultimately lead to lower customer satisfaction.
This is exactly where leading workwear company Carhartt was headed when working with multiple EDI suppliers. Mark Hurt, who was the manager of Enterprise Integration at the time, admitted, “Our EDI process was not streamlined. We had multiple tools to manage EDI transactions, which didn’t allow communications and direct connectivity functionalities … we had delays in our process, which sometimes delayed shipment dates”.
After careful consideration, Carhartt selected OpenText™ BizManager™, an on-premises EDI platform, to improve information exchange with its trading partners. Hurt commented: “The biggest value that we’ve seen is the speed and improvement of processes. We now have EDI set up with our vendor community and our retail/wholesale community – our suppliers as well as our customers … when you increase speed to market, you’re increasing your value-add to partners”.
A major challenge when using multiple EDI software solutions is the lack of visibility across your supply chain. You are working with a number of different business documents in a number of different formats exchanged using a number of different communications methods. In effect, you’re building inefficiency into your supply chain.
This is certainly what Carhartt has found as it now has real-time visibility of into the status of every transaction, which Hurt described as “one of the hidden gems of the solution”.
Streamline EDI payments and improve customer service
OpenText has been working with a large UK retailer, Dixons Carphone (since renamed Currys), that required a lean and cost-effective means to trade with its suppliers. As a traditional ‘bricks and mortar’ retailer, the company faced stiff price competition from online rivals and realized that it needed to work very closely with suppliers to deliver excellent customer service if it was to remain competitive.
The company chose OpenText Trading Grid™ Messaging Service as a central cloud EDI software solution for key suppliers but soon saw that it enabled them to quickly on-board its entire supplier community. Today, the company has nearly 100% of its suppliers connected and trading digitally – reducing on-boarding time from weeks to under three days – enabling it to have far greater stock visibility and improve customer response times.
Carhartt has also been able to respond much faster to its internal customers through working with a single EDI service provider. Whereas business users may have had to wait months previously for requested changes to be made to the EDI software systems, it can now be accomplished in days. This means that the business can react much more effectively to market conditions.
Single source of the truth and compliance with a single EDI company
As businesses become more globalized, working with multiple EDI service providers can quickly make compliance a costly logistical and administrative nightmare. New local and regional regulatory changes have to be accommodated within your business processes, which means making changes to different systems often from EDI service providers that may or may not include the capability within their product or don’t have the capacity to keep pace with regulatory changes on a worldwide basis.
More than 50 countries worldwide have their own distinct regulations for electronic invoicing (e‑Invoicing) – from archiving to digital signatures to value added tax (VAT). This is an increasingly dizzying amount of new and changing regulation that every business faces. Few companies can keep on top of global compliance requirements. A single global EDI service provider like OpenText offers compliance expertise in all regions to enable appropriate changes to be made quickly to your EDI software solution to ensure you remain compliant.
For more information, learn how to optimize and future-proof your existing EDI VAN implementation.