Both consumers and companies have undergone a significant evolution since the onset of the pandemic. The focus is now on digital transformation and its role in building resilience during anticipated or unforeseen events. The responsibility is mainly on the technologies and architecture that connect retailers, distributors, suppliers, manufacturers, and customers.
To deal with the disruptions caused by the pandemic, organizations are now dependent on a highly available and scalable Electronic Data Interchange (EDI) more than ever before. Those who have already implemented it are looking for ways to optimize it, improve their supply chain operations, and ensure stability and visibility. Not surprisingly, the global EDI market, valued at $2.46 bn in 2019, is now predicted to touch $49.21 bn by 2027 at a CAGR of 9.5% during the forecast period 2020-2027.
EDI enables organizations to move to a zero-operations model by doing away with their paper-based documents, such as purchase orders, invoices, and documents related to payments, inventory, shipping status, and other business-critical processes, to a standard digital format. It replaces traditional business communication with automated capabilities, allowing organizations to share real-time data. It is a boon for modern organizations in an ecosystem where goods and services are constantly exchanged as part of their supply chains.
Why Modernize your EDI System?
Although EDI has been around for years as a dominant protocol in the world of B2B, the systems that enable the exchange of EDI documents have now moved to the cloud. The modern EDI setup simplifies regular maintenance, necessitating robust data backups to safeguard data at all costs. The modernized versions of EDI offer up-to-date features and security measures that are required to streamline your operations, securely exchange data, and increase business efficiency.
EDI integration facilitates data collection, visibility, reporting, and analysis. Efficient EDI transactions ensure prompt and reliable delivery of the product and services, resulting in positive business outcomes and superlative customer experiences.
But as with every other technology, EDI integration also demands careful work and planning. Regrettably, inefficient resource planning has left numerous businesses across various industries grappling with the daunting task of seamlessly integrating EDI into their ecosystem due to the cost and complexity involved, resulting in mixed results. Given the intricate nature of this space, there is a need for a service offering that facilitates faster and smoother EDI integration via the cloud with 24/7 availability and ensures connected digital experiences for customers and partners.
If a business handles the EDI integration with its ecosystem independently, then there are things to remember and pitfalls to avoid to get the full benefits.
Here are Our Top 3 Recommendations
Incorporate Flexibility to Scale with Modern EDI System Architecture
The one lesson we learned well in the past few years is the certainty of change. Things can happen when you least expect and turn your world upside down. In business scenarios, change comes in the form of unforeseen events. While the pandemic caused significant turbulence, seasonal changes along with industry and region-specific events are widespread. When the business network is available in the form of cloud or hybrid solutions, it is easier to scale up and down to accommodate these sudden fluctuations in transaction volumes.
Cloud EDI system software comes with technological and business process improvements to offer greater elasticity and agility to your business. While traditional EDI enabled connections between external partners and internal resources, the new version connects partners, applications, services, and data with end-to-end combinations of both internal and client-facing business processes.
A robust B2B infrastructure
Your trading partners and vendors need seamless connectivity to fulfill your business demands and exchange information without disruption. The modern Cloud-based infrastructure with Native Apps, modular design, and APIs offers multi-enterprise connectivity and visibility that consistently demonstrates its ability to manage unprecedented growth in transaction volumes.
Logistics companies have confessed to losing over $250,000 annually due to poor integration, while 9 percent said they are losing $1,000,000 or more due to technology integration issues. Thirty-four percent of the research study participants admitted they depended heavily on manual integration processes and suffered from slow decision-making.
The right technology partner can help you implement EDI best practices while providing the necessary operational excellence. EDI/B2B data typically comes from vendors and partners, and a good service provider will help you manage it well to optimize performance and free up strategic resources.
Privacy and data protection
With the shift to the Cloud, you need to do everything possible to protect data. EDI brings you closer to your supply chain partners, which means essential details about your organization are vulnerable. Global operations bring in different legal frameworks, cultural differences, and diverse privacy and data protection rules. Encrypted transfer protocols and proper data storage are critical for end-to-end processes.
You need to understand the sensitivity of data to incorporate best practices. For instance, invoice data is more sensitive than order data since it includes commercially sensitive information that needs to be protected from misuse. Ohio-based logistics startup Sauder Woodworking recently embraced a B2B fulfillment suite replete with EDI automation to drive business agility and security across its B2B ecosystem.
Making a Case for API
Modern application development enables companies to innovate rapidly by using cloud-native architectures with loosely coupled microservices that interact via Application Programming Interfaces (APIs). EDI architectures are transitioning from traditional monolithic models to a modular design that is enabled by APIs.
Justin McMillan, the COO of logistics consulting company UpstartWorks, confirms, “Traditionally, EDI is a very strict, specification-driven technology or a way of transferring data. EDI uses AS2, a data transfer protocol, to ensure that the data between two parties is secure when it’s transferred. Whereas, APIs allow for flexibility in its abilities to customize, as it’s based on a programming format where you can make calls to certain sets of data to receive whenever you need to.”
The truth is that API can serve as the perfect complement for EDI. Rather than pivoting from EDI to API, we must augment EDI integration with API capabilities to optimize supply chain efficiencies. Enhanced technology enablers that support businesses with an interconnected and agile EDI system, along with supporting API capabilities and mapping interfaces, are the need of the hour. Such service enablers will allow businesses to easily add new trading partners and gain more efficiency, enhanced visibility, and agility in the system.
While EDI works effectively for batch processing mission-critical transactions such as financial documents, APIs are handy for real-time data exchange.
For instance, freight carriers need real-time efficiency and secure B2B data exchange. APIs give them a competitive advantage with real-time shipment status and load-tender responses. At the same time, EDI formats support new standards for mission-critical transactions as per government mandates to ensure reliability and security. By integrating both into backend systems, freight carriers get the ideal mix.
Frank Kenney, director of market strategy for Cleo, explains, “All along, we’ve told our customers and prospects, ‘You’ll need real-time end-to-end visibility. You’ll need a way to connect on-prem to the cloud. API isn’t replacing EDI; they’re complementary, and you’ll need a single platform that can do both. You need the agility to turn on a dime. And you’ll want the choice to either do it yourself, get it as a managed service, or figure out some combination of the two. It’s all about you being in control of the customer experience. It’s all about optimizing your business ecosystem and creating value through integration.”
APIs help connect directly to applications and transactional systems like ERP for instant data transfer. API-driven transactions need less storage, memory, and computing effort to manage data exchange, making it easier to secure them with encryption and authentication methods. APIs also help onboard new partners quickly and self-service onboarding processes, making faster EDI data exchanges easier. No wonder APIs are an essential milestone in the digitalization roadmap of modern organizations.
So, if you are already using established EDI methods and practices to support mission-critical processes, you can strengthen them with API capabilities without making an additional investment to build separate infrastructure. A unified platform that supports such a blended solution will do the trick.
Winning with EDI
While there has been a lot of speculation and deliberation around EDI systems, the fact is EDI is here to stay. It offers concrete benefits to users and works exceedingly well in diverse IT systems. Giving it an additional boost with APIs can enhance your capabilities significantly. Collaborate with a service provider with ample experience in EDI and API integration to eliminate complexities from your business environment and get an edge to manage supply chain operations efficiently.
Switch to EDI with Trigent
Decades of experience and a highly competent team of technology experts allow us to help you improve data transfer and accuracy with EDI and API-enabled solutions. We can enable advanced supply chain process automation while supporting you during the entire process.
Furthermore, with Trigent AXLR8 Labs, your business can leverage a cloud-based EDI platform that supports API capabilities to ensure that your business processes are faster, secure, and reliable and provide enhanced connectivity, leading to a well-connected digital experience for your customers.