EDI

https://www.edibasics.com/implementing-edi/

BENEFITS

Tactical benefits:

Cost savings from error reduction in order intake, avoiding staff time in order creation, savings due to
time and effort avoided in saving(file), tracking customer orders or lost emails/faxes and following up
with customers for their orders.

Speed of transactions can go up by ~60%.

Accuracy of transactions improves by ~40%.

Improves Order-To-Cash Cycle time.

Strategic benefits:

Real time visibility into order status and quick communication chain

Easier customer onboarding process and smooth experience

Steps to implement EDI:

1. Develop an Organization structure: Nominate a EDI Coordinator (responsible for
stakeholder support and buy-in), Steering committee (includes heads of dept’s impacted
by EDI), Senior Mgmt. Sponsor and EDI implementing team.
2. Undertake a strategic review: Identify the customers, suppliers, their volume of
transactions and type of transactions that will be transitioned to EDI. Review how EDI
will improve each process rather than just automate it.
a. Eliminate redundant steps from the business cycle?
b. Eliminate redundant data entry?
c. Reduce manual effort?
d. Improve customer service by speeding the delivery of goods?
e. Improve the relationship with business partners?
f. Facilitate larger business strategies, such as Just-in-Time manufacturing?
3. Carry out in-depth analysis: Which part of the organization is most ready for EDI, where
EDI can give maximum benefits and carry out cost-benefit analysis.
EDI survey to understand what type of data is required by EDI and other business partners
to ensure smooth integration.
 Prepare a final report covering:
 The scope of the project
 Description of strengths and weakness of existing systems
 Recommended system alternative and its capability to strengthen the company
 Required data integration and document customization
 Reference to alternatives considered but not selected
 Financial data on recommended and rejected approaches
 Timing of system development and funds needed
 List of personnel required to develop and implement the system
 Implementation schedule

4. Business focused EDI Solution: Afetr doing an indepth analysis, we should have a good idea
of how much data volume will be transacted, what type of data, is our internal communication
network capacity commensurate with these requirements, required network connections,
customization and programming required to integrate internal and external systems.

5. Selct you VAN based on cost, network capabilities, global support and market
presence(today and 10 years in future)

6. We will need an experienced EDI staff who must be familiar with all the network and
communication requirements. S/he must be able to integrate EDI with ERP system to pull or
load data, creating EDI documents by converting system data into EDI standard data, and
installing and configuring the communication network for sending/receiving documents.

7. Data Analysis before data integration: Study each business process individually such as PO
processing, sales orders, invoice processing etc.

Data is broken into Primary or Secondary keys – Primary keys are common to all businesses
such as PO number, PO Date, Contract/Agreement No. etc.. Secondary keys are specific to
a customer such as Customer Plant code, Customer Document number etc.

Once these intricacies are understood, data mapping can be staetd.

8. Data Mapping: Try building standard formats that work for all the customers. It will help avoid
custom edits per individual business partner and thus avoid extra programming needs.

9. Pilot Project: Create a pilot project with the most experienced EDI partner, learn from them,
implement a standard and simple document first.
Assess pilot project results: Is EDI working as desired, are the anticipated results delivered,
is the network able to handle data traffic, any deviation or unexpected outcome.
 Cloud Vs Onsite EDI

Scalability: Cloud implementation is easily scalable as the number of EDI partners grows. There is no
need to invest in hardware or technical talent to ramp up the EDI operations. Cloud service provider will
take care of all hardware and scalability issues.

Costs: Onsite implementation involves hardware, staffing, security, data management and other
integration costs, which can be avoided by transitioning to cloud.