What are the key factors to consider when choosing an EDI software or service provider?

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Electronic data interchange (EDI) is a method of exchanging business documents and data electronically between different parties, such as suppliers, customers, and logistics providers. EDI can streamline business processes, reduce errors, improve efficiency, and enhance collaboration. However, choosing the right EDI software or service provider can be a challenging task, as there are many factors to consider. In this article, we will discuss some of the key factors that can help you make an informed decision and find the best EDI solution for your business needs.

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Define your EDI needs:

Start by clearly outlining your transaction types, volumes, and required standards. This ensures you choose a provider that meets your specific business demands and compliance requirements.### *Evaluate total cost:Consider all costs, including initial investment, maintenance fees, and potential ROI. Comparing these factors helps you select a provider that fits within your budget while delivering long-term value.

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1 Your EDI requirements

Before you start looking for an EDI software or service provider, you need to define your EDI requirements clearly. This includes the type and volume of EDI transactions you need to exchange, the formats and standards you need to comply with, the integration options you need to connect with your internal systems and external partners, and the security and reliability measures you need to ensure data protection and compliance. Your EDI requirements will determine the features and functionalities you need from an EDI software or service provider, as well as the cost and complexity of the implementation.

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2 Your EDI budget

Another important factor to consider when choosing an EDI software or service provider is your EDI budget. Depending on your EDI requirements, you may have different options for acquiring and deploying an EDI solution, such as purchasing a software license, renting a cloud-based service, or outsourcing to a managed service provider. Each option has its own advantages and disadvantages, as well as different upfront and ongoing costs. You need to compare the total cost of ownership (TCO) of each option, taking into account the initial investment, the maintenance and support fees, the scalability and flexibility, and the return on investment (ROI).

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3 Your EDI partner network

Another key factor to consider when choosing an EDI software or service provider is your EDI partner network. This refers to the number and diversity of the business partners you need to exchange EDI transactions with, such as suppliers, customers, logistics providers, and regulators. Your EDI partner network will affect the complexity and compatibility of your EDI solution, as you need to ensure that your EDI software or service provider can support the formats, standards, protocols, and communication methods that your partners use. You also need to consider the onboarding and testing process for new and existing partners, as well as the monitoring and troubleshooting capabilities for resolving any issues.

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4 Your EDI expertise and resources

Another critical factor to consider when choosing an EDI software or service provider is your EDI expertise and resources. This refers to the level of knowledge and skills that you and your staff have in relation to EDI, as well as the time and effort that you can dedicate to managing and maintaining your EDI solution. Depending on your EDI expertise and resources, you may prefer a more user-friendly and intuitive EDI software or service provider, or a more comprehensive and customized one. You may also opt for a more self-service or a more fully-managed EDI solution, depending on how much control and responsibility you want to have over your EDI operations.

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5 Your EDI vendor reputation and support

The last factor to consider when choosing an EDI software or service provider is your EDI vendor reputation and support. This refers to the credibility and trustworthiness of the EDI software or service provider, as well as the quality and availability of their customer service and technical support. You need to do some research and check the reviews and testimonials of other customers who have used the EDI software or service provider, as well as their certifications and accreditations in the EDI industry. You also need to ask about their service level agreements (SLAs) and their response time and resolution rate for any issues or queries that you may encounter.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Carl Berg

Musician and Parish Administrator
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The first and most important thing is to establish rapport between the two EDI partners. No amount of technical expertise will overcome the old "You wanted what to happen?" "Well it wasn't covered by our contract." conundrum. Remember that it takes years to develop a customer, and about five minutes to lose one.

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Sten Sundelin MSc CSM

Software Development Director | Agile Coach | I create savings by integrating processes and encouraging Communication in a Virtual World | I speak Strategic C-Speak and Tactical Tech Talk | Multi-National and -Lingual
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Having had the privilege of working with EDI solutions at multiple levels for many years, there are basically two parts to this equation, transformation (unless that is ‘built-in’ with your business software) and transport (https/sftp/X.25/other). Oftentimes transformation and communication are both included in a single software solution. More importantly than just cost, you need to look at ROI. When Campbell Soup Company introduced EDI (which was built into the Order Management solution I represented), they saved a whopping $18M per year thanks to better order quality and less returns! Having EDI can be a requirement for doing business with companies like Wal-Mart. Planning on doing international business? Support EDIFACT and X.12.

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Jim Tackett

Senior EDI Analyst
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Transformation and communication is absolutely critical. I would also like to add reporting. Validating that a document is received and processed into the ERP. Being able to validate an ASN is on time and an invoice sent out. Without the reporting aspect and monitoring. EDI can be very costly. Think in terms of what happens when there is an error in the sent document.

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Kevin Lee

Senior IT Analyst at Caterpillar Inc. Retiree
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Go with store a forward concept for review and reque the transaction if necessary Inbound and outbound. Tracking software should be added for visibility for trading partners, big plus reduces phone calls on what happened etc to the EDI support team.

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What are the key factors to consider when choosing an EDI software or service provider?

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1 Your EDI requirements

2 Your EDI budget

3 Your EDI partner network

4 Your EDI expertise and resources

5 Your EDI vendor reputation and support

6 Here’s what else to consider

Electronic Data Interchange (EDI)

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