EDI implementation pitfalls
EDI helps companies digitise their processes and make them more efficient at the same time. Experience shows, however, that implementation is not easy: there are many pitfalls on the way to a working EDI process. In this article, you will learn which 5 pitfalls deserve particular attention and how to avoid them.
What is EDI?
EDI (short for “Electronic Data Interchange”) is the electronic exchange of business documents such as orders, delivery notes and invoices. These documents are exchanged digitally between trading partners without any manual intervention.
EDI is not a specific technology, but rather a combination of electronic processes, exchange protocols and established standards for business documents.
In principle, the exchange itself should be as simple as possible thanks to established standards for trade documents and formats or trading partners’ ERP systems, since all parties involved adhere to the agreed standards. Read on to find out why pitfalls can still arise in practice.
Automating business processes via EDI is not only faster and more efficient – it also brings companies many benefits, such as shorter transmission times, fewer errors and no duplicate work.
EDI in a nutshell
Electronic data interchange works as follows: documents such as invoices are generated from all the necessary information in the sender’s enterprise resource planning software (ERP system).
An EDI converter transforms the data into a format agreed with the recipient and transmits it. As soon as the EDI message reaches the recipient, the data is adapted to the recipient’s ERP data structure and processed there.
EDI implementation pitfalls: five real-world examples
To take full advantage of the immense benefits of EDI integration, there are a few implementation pitfalls you should be aware of in advance.
1. Using an expensive EDI service provider
Many EDI providers are still very expensive. In practice, with many providers companies have to expect a very high setup fee and therefore a large upfront investment. Companies invest a great deal of money before a single automated order has been processed.
2. Companies want to do EDI mapping themselves and lose time as a result
What is EDI mapping? Mapping is the conversion of data from one structure into another, for example from an SAP IDoc structure into an Excel spreadsheet. These mappings are very time-consuming and costly. As the foundation for the entire data exchange, the mapping must be set up without errors.
3. Deviations from the standard – problems with special cases
Although EDI works with standardised documents, there are special cases here, as almost everywhere. A real-world example shows why special cases become a pitfall: if, for instance, only half a pallet is needed or ordered for a delivery, a completely new mapping has to be created for these special cases (which often occur only rarely or affect only one trading partner).
4. Limitations of your own ERP system
Before implementation and mapping, you should first make sure that the ERP system you currently use is EDI-capable. Many ERP systems offer preconfigured EDI interfaces – but a background check is a must.
5. Neglecting security
One of the most important points is security. If problems occur, or the EDI integration even fails, this can lead to major losses – for example when invoices and delivery notes have to be tracked and processed by hand. That is why it is essential for companies to run regular backups and build a solid infrastructure.
Why does it make sense to look for an external partner for EDI implementation?
Because of the high costs or complicated software, many companies decide to carry out the EDI implementation in-house. As the points above make clear, this can be a major challenge, especially when the integration is to be carried out by people who are not IT specialists.
On the other hand, finding the right external partner is also difficult. Traditional providers often offer technically outdated solutions that are not very attractive in terms of cost.
Procuros is the first one-to-all platform for connecting digitally with trading partners. The platform enables direct data exchange between IT systems, reducing manual work and sources of error by up to 90 percent. Thanks to plug & play integration, no programming or lengthy IT project is required. In addition, all trading partner requirements are met, which avoids a possible delisting.
