Outsourcing EDI: A fully managed approach part 1
by Steve Rees, product manager at Wesupply, the UK Electronic Data Interchange (EDI) service provider.
Thursday, June 07, 2012
Steve Rees is product manager at Wesupply, the UK Electronic Data Interchange (EDI) service provider. He has spent many years assisting high profile supply chains in improving communication, accuracy and visibility. Today he discusses how organisations can reap the rewards of a fully managed approach to outsourcing EDI.
EDI is an essential component in any effective supply chain. Firms can gain real commercial advantages by ensuring that they have taken the right approach to EDI to serve their needs. Not only does EDI facilitate the sending and receiving of important trading documents and messages between an organisation and their trading partners, it also allows companies to gain greater control of their supply. This is achieved by creating clear and instant visibility of all transactional activities, whilst eliminating paper work, removing keying and reducing time between demand generation and sales order creation.
Despite these long established benefits a number of significant barriers are still faced by many companies using traditional in-house EDI. Purchasing and maintaining the necessary hardware and software components required to successfully implement an on-premise solution comes at a significant cost and effort; this is intensified by frequently changing requirements, standards and systems mandated by trading partners. In order to overcome the costs and complexity associated with EDI, outsourcing to a B2B service provider is becoming an increasingly popular choice, especially amongst organisations looking to extend capability to a larger supply base or growing customer portfolio.
While the commercial advantages of outsourced EDI are being increasingly documented, the range of different approaches to outsourcing on the market – from a basic outsourced solution, to a fully managed service – means that companies should err on the side of caution before jumping in with both feet, carefully weighing up the pros and cons of all the options available.
Many outsourced EDI solutions simply consist of adopting hosted hardware and software to transfer messages between an organisation and its trading partners, neglecting critical processes such as message translation and partner on-boarding. These are substantial overheads which would still have to be handled in-house of or through a third party. It is vital that prospective purchasers understand all the internal and external costs before deciding on the best route to take.