What Is EDI? An Insanely, Advanced Relic of the Nineteen Seventies
For decades, companies have relied on the archaic and insanely complex Electronic Data Interchange (EDI) standards. For those unfamiliar with the term, EDI is a standardized practice and format for sharing information electronically between companies.
Looked at in with some of the massive innovations in technology we’ve seen over the last 40 years (think: the personal computer, connected devices, social media) it’s a little crazy to think that EDI standards were created in the 1970s and remain largely unchanged today. It’s even crazier to think that companies still utilize this dated technology, especially when modern cloud-based integration solutions exist that offer huge advantages in terms of speed and efficiency.
Let’s take a look at some of the major issues associated with EDI, and the need to incorporate other solutions that provide application-to-application connections at a rapid pace.
First, some of the key problems with EDI:
- Creating or reading an EDI document is difficult and time-consuming. It can take weeks to figure out the mapping and test the data transformation rules.
- Most of the companies who use EDI are not fully compliant with the standards. Why does this matter? Well, non-compliance with EDI standards leads to erroneous or incomplete data sets, and as a result, hours and hours of time are spent fixing errors and resubmitting them.
- The amount of time needed to onboard a new trading partner is enormous. Each onboarding request requires individual testing and acceptance; a process that can last several weeks, or even months.
- EDI requires experienced professionals to manage data. Most often it’s very hard to find good EDI specialists and they are very costly to retain.
- There is no net value-add for companies leveraging EDI, and at that, EDI is dependent on expensive value-added-networks in order to transmit messages.
If you put a dollar cost on each of these issues, the average company would have to pay thousands per month – that’s your bottom line walking out the door. Not to mention, the time spent on these outdated processes puts you light years behind the competition and delays revenue significantly.
Let’s go a step deeper with an example. Assume there’s a company named Rosa’s Luxurious Soap that sells cleansers to Target. Currently, Rosa’s needs to take data from their order management system and convert it to EDI, then send it to Target. From there, Target needs to validate the incoming message, its contents and convert it into their desired format. What a process!
With the pace of today’s business environment, companies need solutions that offer the highest levels of efficiency and economic return. In other words, organizations should look for solutions that provide fully configured connections and have rapid integration abilities. This saves times and allows their customers to automate the data exchange process themselves – that’s a win-win.