Introduction
For many years, Electronic Data Interchange (EDI) has been instrumental in facilitating seamless communication and document exchange between businesses with different software systems. By automating manual processes, EDI enhances operational efficiency and eliminates the need for manual intervention. When implementing an EDI solution, organizations face the choice between utilizing a managed EDI service or an EDI platform. In this blog post, we will explore the pros and cons of each option to help you make an informed decision.
EDI Platforms
An EDI platform refers to a software solution, either cloud-based or on-premise, that empowers businesses to manage their EDI operations independently. Here are the pros and cons of adopting an EDI platform:
Pros
-
Cost
Depending on the particular EDI provider, the costs related to the implementation and use of an EDI platform can be less compared to a managed EDI service, as the responsibility for the majority of the support and setup falls on you. Nonetheless, it’s important to factor in the internal costs associated with the time spent on these tasks.
-
Control
When an organization opts for an EDI platform, it secures direct control and access to its EDI setups and configurations. They have the freedom to deploy internal resources for managing EDI operations or enlist the help of an external EDI consultant. However, it’s worth noting that not all EDI platforms offer full control, and there might be a reliance on their support for some aspects.
Cons
-
Expertise
An EDI platform requires an internal resource that is familiar with EDI and has some technical expertise. Alternatively, organizations can opt to hire a third-party EDI consultant to handle the complexities of the system.
-
Implementation
Most EDI platforms will only setup the connection for you and add it to the platform. The rest of the EDI setup, configuration, and testing is on you. This can end up being a lot of time if you are doing a migration from another EDI system or if you are frequently setting up new partners.
-
Platform Limitations
Some EDI platforms don’t offer 100% control over the EDI process, leaving the rest to be managed by the platform provider. In case of issues beyond the platform’s capabilities, organizations rely on the provider’s support, which may vary in terms of responsiveness and effectiveness.
-
Manual Intervention
Many EDI platforms require manual intervention throughout the process, limiting the potential for a fully automated solution. Properly implemented EDI solutions should minimize or eliminate the need for manual intervention.
Managed EDI
Managed EDI is when your EDI provider handles all the operations, management, and maintenance related to EDI for you. Here are the pros and cons of adopting a managed EDI solution:
Pros
-
Hands-Free Operation
With a managed EDI service, the provider handles all aspects of EDI, making it effortless for organizations. It becomes a seamless and invisible process, freeing up internal resources for core business activities.
-
Full Automation
A well-implemented managed EDI solution minimizes or eliminates the need for manual intervention. The process is designed to be fully automated, ensuring efficiency and reducing the risk of errors.
-
Customization
Managed EDI providers can design custom solutions tailored to the organization’s specific needs. This flexibility streamlines processes and optimizes workflow, avoiding the limitations of rigid, one-size-fits-all platforms.
-
Expertise and Partner Relationships
Managed EDI providers typically possess extensive expertise in EDI setups and management. They have established relationships with trading partners, enabling faster and smoother EDI setups and reducing the time required for on boarding new partners.
Cons
-
Limited Control
By outsourcing EDI operations, organizations have limited control over the entire setup and process. While they may have access to view transactions and configure specific elements, the overall management rests with the EDI provider.
-
Cost
Managed EDI services could involve higher costs compared to platform-only solutions. However, organizations should also consider the savings from not having to hire or assign internal resources dedicated to EDI management.
Conclusion
In conclusion, your company’s specific needs will dictate the best choice between an EDI platform and a managed EDI solution. The key factor in this decision is the level of control you desire. If complete control and in-house management of your EDI is what you seek, then an EDI platform could be your best bet. However, keep in mind that some EDI platforms may not offer total control, necessitating dependence on the EDI provider’s support for certain aspects. Conversely, if your company requires a seamless EDI operation and lacks a dedicated resource for its management, a managed EDI solution might be the ideal fit.
Finally, when choosing a platform-only solution, it’s essential to account for the Total Cost of Ownership (TCO). While you may initially save on monthly expenses, you must factor in the costs associated with managing the EDI configurations and addressing support issues.