6 EDI developments sensible companies are ready for in 2021
The global EDI (electronic data interchange) market is expected to double in the next six years. Not bad for a technology that, for more than three decades, has been predicted to disappear. Despite those forecasts, EDI remains at the heart of business for organizations throughout the world. And its relevance is set to grow as we move into 2021. Here are six EDI trends that smart businesses see coming.
EDI forms part of digital transformation initiatives
In almost every industry, the COVID-19 pandemic has accelerated digital transformation initiatives. One of the most affected areas of business was the supply chain, which experienced widespread disruption globally. It became clear that building the required levels of resilience and agility is not possible when so many of the processes are complex or (gasp!) still manual. Companies worldwide need to digitally engage and trade with their partner ecosystems and automate processes as much as possible. The pandemic has placed a major spotlight on how organizations can achieve this goal at an affordable price.
EDI sees steep growth in small business
In its report on EDI software, Fortune Business Insight suggests that growth within small- and medium-sized businesses (SMBs) is the leading driver for the market. For companies that want to expand, going digital represents the only way forward, with many needing to find an easy way to become digital for the first time. SMBs must operate on tight budgets while they’re also expected to trade digitally, especially with large customers. Lacking the in-house skills or infrastructure, suppliers are turning to cloud-based services — such as EDI-as-a-Service from EDI Here — to connect and trade quickly with large retailers.
EDI has a big role to play in ecommerce
In 2019, EDI accounted for 78.4 percent — $7 trillion — of all B2B electronic sales. As 2020 progressed, more and more of B2B sales were conducted online. That trend is now fixed and will continue to grow. In 2021, the two sales channels — EDI and B2B e-commerce — will become more interconnected, as EDI has been optimized for many of the key business processes within organizations. EDI helps not only with purchasing and invoicing but with processes throughout production and the supply chain, in a way few technologies can match.
Healthcare remains a strong sector for EDI
The global healthcare EDI market was valued at approximately $2.78 billion in 2019 and is anticipated to rise to $4.7 billion by 2027. The increase in regulations such as HIPAA (the Health Insurance Portability & Accountability Act) to ensure data privacy and security continues to foster growth in the market. In addition, there’s a significant increase in end-user spenders, such as pharma and medical device companies, that are taking advantage of the benefits of EDI. These benefits included secure data exchange, product traceability and shortened delivery times.
Peppol and other e-invoicing mandates continue to expand
Peppol began life as an EU-funded project to establish standards for electronic public procurement within the European Union. It’s an EDI protocol designed to simplify the purchase-to-pay process between government bodies and suppliers. Since its inception in 2012, it has achieved widespread adoption in Europe and has also been adopted globally in countries including Singapore, New Zealand and Australia. In January 2021, Singapore announced new certifications to extend the reach of its Peppol program. With a mandate for e-invoicing to tackle tax fraud, expect 2021 to see more global adoption of Peppol and other e-invoicing tools.
Managed services are increasingly attractive
Companies large and small are re-evaluating their current B2B programs and deciding whether to upgrade, downgrade, consolidate or outsource. For many larger organizations, the cost and complexity of managing and maintaining in-house capabilities can be daunting. In addition, there is a real shortage of talented EDI professionals. Compared to going in-house, it’s more likely that large businesses will gravitate toward consolidating several VAN (value-added network) solutions into one or will instead outsource their entire B2B program to managed services. Not only do these efforts reduce overall costs and complexity, the cloud-based nature of modern EDI VAN services — EDI-as-a-Service from EDI Here — enables access to value-rich capabilities in areas such as community management, visibility, API support and more.