EDI is used by companies of all sizes to digitize their processes and make them more efficient at the same time. Experience shows that the introduction is not easy. Because on the way to a functioning EDI process you can encounter many pitfalls. In this article you will learn which 5 pitfalls to pay particular attention to and how to avoid them.
EDI (stands for "Electronic Data Interchange") is the electronic exchange of business documents such as orders, delivery notes and invoices. Various documents are exchanged digitally between trade partners without manual intervention.
EDI is not a specific technology, but rather a combination of electronic processes, exchange protocols and established standards for business documents.
In theory, the exchange itself should be as easy as possible thanks to established standards for trading documents and formats that all parties involved should adhere to. In the following text you will learn that there can still be pitfalls in practice.
The automation of business processes via EDI is not only faster and more efficient, there are many advantages for companies, such as shorter transmission times, error reduction and the avoidance of duplicate work.
The electronic data exchange works as follows: Documents such as invoices are generated from all the necessary information in the trade partners enterprise resource planning software (ERP system).
An EDI converter turns the data into a format agreed by the recipient and transmits it. As soon as the EDI message arrives at the recipient, the data is adapted to the recipient's ERP data structure and processed there.
In order to be able to use the immense advantages of an EDI integration, there are some pitfalls in the implementation that should be considered beforehand.
1. Use of an expensive EDI service provider
The EDI service provider landscape is still very intransparent. In practice, with many providers, companies are charged very high setup fees, which results in significant upfront investments. Many companies invest a lot of money without even having processed a single automated order.
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 to another, such as from a SAP IDoc structure to an Excel spreadsheet. These mappings are very time consuming and expensive. As a basis for the entire data exchange, the mapping must be set up without errors. Mapping, testing and bug fixing require experience and specific know-how.
3. Deviation from the standard - problems in individual cases
Although EDI works with standardized documents, there are special cases here, as almost everywhere. A practical example makes it clear why special cases can become a snare: If, for example, a trade partner requires additional packaging information, such as serial shipping container codes (SSCC), a completely new mapping must be created for these special cases (which often only occur rarely or only affect one trade partner).
4. Limitations of your own ERP system
Before implementation and mapping, one must first ensure that the ERP system in use is EDI-capable. Many ERP systems offer preconfigured EDI interfaces - a background check is highly recommended.
5. Lack of IT security
One of the most important factors to consider in EDI Integrations is the issue of safety. If there are problems or even a failure of the EDI integration, this can lead to large losses, for example if invoices and delivery notes have to be tracked and processed by hand. It is therefore essential for companies to carry out regular backups and build a solid infrastructure.
Many companies choose to carry out the EDI implementation in-house due to the high costs, intransparent offers or complicated software. However, as illustrated by the points above, in-house execution can bear major challenges, especially when non-IT specialists are expected to perform the integration.
The search for the right external partner can be very difficult. Traditional providers often offer technically obsolete solutions that are not very attractive in terms of cost.
Procuros is the first one-to-all platform for digitally connecting to trade partners. The platform enables direct data exchange between IT systems, which reduces 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, the platform adapts to all trade partners’ EDI requirements, thus reducing complexity for all parties involved.
If you want to learn more about how to digitally connect to your trade partners with the Procuros Integration Hub, schedule a free consultation with one of our experienced digitization experts here or contact us at [email protected]