By Boomi
As it has been for decades, Electronic Data Interchange (EDI) continues to be an essential ecommerce technology for business around the world. In 2021, EDI services processed 76.5% of all B2B digital sales, according the 2022 B2B Ecommerce Market Report. That’s not bad for a technology whose demise has been predicted many times. As these and other robust numbers show, EDI is still going strong. Getting EDI right is going to be an important part of IT’s job in retail, logistics, healthcare, and other industries for many years to come.
Not that there aren’t any challenges with EDI in today’s cloud-based IT environments. Legacy EDI systems, running on-premises and built for a much slower pace of business, are forcing many high-speed businesses into low gear. Problems include:
- Long, complex onboarding processes that stretch from weeks to months.
- Expensive on-premises hardware and software with burdensome mandatory upgrades that add no value.
- Lack of support for new technologies such as APIs, forcing IT organizations to manage two different communications silos: EDI and everything else.
- Lack of integration with ERP platforms and new cloud services, reducing operational efficiency and creating technical debt.
- Lack of visibility into transactions, leaving business analysts and other non-EDI developers out of the loop on business transactions.
To address these problems, it’s time for organizations to modernize their EDI platforms and services, bringing this important B2B communications technology into the age of cloud computing, remote workforces, and digital transformation.
Here are five strategies for undertaking this important work.
1. Choose a cloud-native EDI platform that supports distributed deployments.
Many organizations have adopted a cloud-first strategy when it comes to new IT investments. The strategy is simple. When adopting new technology or modernizing existing technology, they will invest in a cloud platform and move away from on-premises deployments.
But simply migrating an existing EDI platform to the cloud doesn’t turn out to be a successful modernization strategy. The reason? Even when redeployed on a public cloud service, legacy EDI platforms still lack the flexibility and scalability of true cloud-native solutions.
One of the most important benefits of modern cloud-native applications is flexibility. IT organizations need the ability to deploy EDI instances anywhere as needed to meet business requirements. For example, if a company adds trading partners in a region that has in-country data requirements, they might need to deploy a local EDI instance to process transactions within the geographical limits of that region. Or if the company has made a strategic decision to switch from one cloud infrastructure vendor (i.e., AWS, Google Cloud, or Azure) to another, they might need the flexibility to deploy to both the old and the new platforms simultaneously — or even switch back to an on-premises runtime model if the migration encounters difficulty.
This kind of flexibility comes easily to cloud-native applications, including cloud-native EDI platforms. Legacy software is much less adept at running optimally in these different environments. In fact, it might be available only on one or two cloud environments and not support scenarios where on-premises deployments are needed.
Bottom line: make sure you have the flexibility to deploy your EDI runtime anywhere by choosing a cloud-native EDI solution with distributed deployment capabilities.
2. Deploy human-readable EDI dashboards for end-to-end business visibility
Another challenge with legacy EDI is just how difficult it is for business users and IT specialists to resolve transactional errors such as discrepancies between orders and actual shipments. It’s especially difficult to resolve problems with order tracking and fulfillment across multiple EDI documents.
Another complication: All too often, the person trying to resolve these issues must have a proficient understanding of EDI protocols and EDI formatting to make sense of what’s being reported in EDI transactions. Resolving business issues takes longer when IT personnel have to be looped in every time to explain these technical matters.
In contrast, a modern EDI platform can provide an EDI dashboard that translates EDI language into human-readable format. This way, business users can diagnose issues themselves, freeing up the EDI team to focus on other projects and preventing security risks of users outside the core EDI team directly accessing mission-critical EDI systems.
A modern EDI dashboard should be able to present information about a purchase order that spans many EDI transactions (ship notice, invoices, functional acknowledgement, etc.), so IT and business teams can understand business transactions from end to end.
3. Avoid EDI silos by ensuring seamless data flows to ERP systems
EDI, by definition, focuses on the communication from a company’s partners up to the EDI application or Value-Added Network (VAN) mailbox at the perimeter of its business processes. EDI ends there, so it’s important that data continues to flow easily into and out of backend Enterprise Resource Planning (ERP) applications such as Oracle, SAP, NetSuite, IFS, JD Edwards, and others.
Look for an EDI modernization solution that doesn’t require you to use a separate application integration solution for passing that EDI data to your ERP applications or separate applications for implementing workflow automation and data management. The B2B commerce data driving your business should be accessible to all relevant business applications without requiring extensive custom integration. Modernizing EDI shouldn’t require more special-purpose products for the IT department to purchase and maintain.
4. Replace slow, labor-intensive onboarding processes with fast, easy self-service onboarding
Onboarding partners, vendors, and distributors can be one of the most time-consuming and expensive aspects of EDI. When partners are asked to onboard, their employees often are too busy with their existing roles to respond in a timely manner to questions about Internet Protocol (IP) addresses and other EDI configuration issues.
Manually diagnosing and resolving onboarding input errors over email and phone calls can take weeks or months, delaying the business benefits that a new partner can deliver. Multiply this delay by 10, 100, or more partners, and EDI is always holding business back and reducing possible deal flow.
Modern EDI platforms provide partner self-service onboarding portals that can reduce onboarding times by 95%. These fast, user-friendly portals eliminate the need for the time-consuming delays and back-and-forth communications that complicate and prolong onboarding processes today. Self-service onboarding gets the job done in just days or, in some cases, even just hours.
By offloading the onboarding process to partners and vendors themselves, a company can reduce its EDI team’s workload and free IT staff to focus on new initiatives and work that is more strategic and valuable that reconciling network addresses and reconfiguring user accounts. Self-service portals also provide clear visibility into partner and vendor status, so business and IT leaders can ensure that partners and vendors have been onboarded successfully.
5. Future-proof your B2B/EDI capabilities and prepare for what’s next.
For years, industry analysts and technologists have been predicting the demise of EDI, yet EDI remains an essential business technology, powering about 75% of B2B ecommerce around the world.
Instead of replacing EDI, consider complementing it with new technologies that broaden your B2B capabilities overall. For example, although APIs require partners to write code to consume the APIs, a growing number of companies are using API Management in conjunction with EDI to offer richer and more responsive B2B capabilities.
Start thinking about what your B2B future might look like and ensure your integration platform that includes EDI also supports future requirements such as API Lifecycle Management, workflow automation, data management, and more.
Conclusion
The power of EDI lies in its concise and efficient communications protocols, its widespread adoption, and its ability, when implemented correctly, to accelerate business.
Already a valuable technology, EDI becomes only more valuable when modernized to take advantage of fast, flexible, scalable cloud services, API-powered applications, mobile technologies, and new data fabrics for connecting, transforming, and managing data.
Follow the five strategies outlined here to make the most of your EDI investments—now and in the future.
Download our EDI Buyer’s Guide to learn more about the risks of legacy EDI, and the growth opportunity to be leveraged through EDI modernization.