Updated on: February 8th, 2023
Previously in our blog, we talked about electronic data interchange (EDI) in general, outlining its advantages, different formats, why it is important, and how it is used.
In this blog, we will look at the most common challenges and how they can be resolved.
As we discussed in our previous blogs, for the past decades, EDI has become a kind of synonym for B2B integrations. Hence many consider it the best way to exchange business-critical data. However, it is far from true. In fact, EDI has many issues and challenges that make it rather a headache for companies relying on it. So, we decided to list the most common challenges companies can encounter while working with EDI. Also, this article discusses how to deal with those challenges and issues. Thus, this article will be a heads-up for those who are about to dip their toes into EDI and a piece of advice for those who are already in the trap of EDI and wants to increase the efficiency of its b2b integration with no need to make significant changes to the existing IT setup.
1. You have a complex B2B Network
As trade has started to be globalized, many businesses found themself in a situation where their partner networks and ecosystems have become more complex, involving cooperation with more partners than before. Among those are suppliers, manufacturers, freight forwarders, and many more, making a list is probably endless.
This means that all those should be able to connect with all necessary stakeholders and send them data electronically, preferably in real-time, to stay efficient and profitable.
To establish the required connectivity, companies need to be able to understand each other data formats and be able to work with the systems in place. The problem with EDI is that it has many dialects bringing specific to the data flows, which is equal to extra work to translate the format of the data from what you get to what you need and the dame for your partners. Not to mention, the data exchange via EDI is far from real-time.
2. The volumes of EDI are growing
More trade and more partners will equal a growing volume of data that you generate and information that you need to share with your ecosystem.
You will have to think of how to connect with specific systems, how to improve the quality of the data, how secure it is to share data with your stakeholders, and whether you have the resources to handle all EDI-related tasks in-house.
3. There are errors and missing fields in EDI
Avoiding errors and missing fields in the EDI is difficult, especially when you start to deal with bigger volumes.
Some older formats of EDI (EDIFACT or IMP) weren’t meant for humans to read and understand them, therefore catching and fixing errors can be challenging. Even when it’s possible to read the information, manual error detection is time-consuming and expensive and can still result in errors.
Automating error detection can significantly increase productivity and increase gross margins.
4. The cost of EDI is skyrocketing
Owning software and hardware for EDI transactions requires substantial financial resources. Also, in-house maintenance is necessary, so you have to dedicate an IT team with knowledge of EDI. The growing volumes of data and flaws in data quality also result in additional costs.
To reduce the costs, you may want to look into alternative solutions for handling your EDI transactions. For example, outsourcing it to a vendor that can run the transactions in the cloud will significantly lower your costs.
5. EDI transactions must happen in real-time with more transparency
The speed of receiving information is critical for transparency. It can influence your productivity, efficiency of processes, costs, and customer satisfaction.
Improving communication and transparency with your partners will help everyone in the value chain to optimize operations and support one another better.
6. Your partner can’t understand the format you’re using
There are many different formats in use, such as EDIFACT, ANSI, X12, TRADACOMS, XML, JSON, IMP, CSV, ODETTE, VDA, VICS, HIPAA, EANCOM, ebXML, UBL ja RosettaNet, in-house formats, and national standards just to name a few.
The chances that some of your partners are using a format that your systems cannot understand are high, so you need to have a solution in place that can translate the information into a format that your systems can understand.
This is an overwhelming task that can be fixed by adapting to a data integration solution that can map the information from the document sent and translate it to the preferred format.
7. Security concerns
EDI is well-established and used across many organizations and industries. Nevertheless, there are still concerns regarding information sharing with partners.
Such concerns are the lack of trust, the risk of the information being exploited due to breaches in security, as well as there, are potential legal problems too due to organizational or governmental regulations.
The solution to deal with the EDI challenges
To deal with the different data formats issue, you will have to have a solution capable of translating all the data flows on the fly. Preferably the one that will be scalable enough to keep up with the paces of your business network expansion and work with the data in near to real-time.
The most common solution to address this challenge is the so-called fully managed iPaaS (integration platform as a service). Apart from process automation, data translation and harmonization, and bridging the gap between EDI and API words, iPaaS solutions are pretty flexible. So adding new partners and solution scalability will not be another challenge for you. Plus, the fully managed approach is what gives you the freedom of not having another hardware system or a software license, as well as managing an additional team of integration experts possessing the knowledge and skills in EDI, which results in significant cost savings.
Relying on iPaaS, you can not only automatically deal with unexpectedly growing volumes of information and address data transactions to be exchanged but also eliminate possible flaws in the data quality and, of course, concerns about the security of your data and systems.
Youredi is the leading provider of data connectivity solutions for logistics and global supply chains. Our ultimate goal is to simplify how you deal with your data flows, including EDI transactions, and minimize your costs.
First of all, we enable connectivity with all your partners regardless of the systems or applications that they use. Our solutions can handle challenging business-to-business integrations, such as getting data from behind firewalls, connecting on-premise systems, or connecting legacy systems with modern applications.
Decreasing EDI costs
Utilizing our EDI services means that you do not need to own software or hardware, but all your transactions will happen in the cloud. This means that you only pay for the setup and the data that you actually transfer.
More data doesn’t have to drive up the costs
As mentioned above, the growing amount of data has a negative effect on your costs. As we understand that the volumes can become overwhelming, we created a pricing model that is beneficial even for organizations that deal with millions of EDI transactions daily.
Improving data quality
To ensure that your data is flawless, we can set up the logic for you that validate all the data against your business rules. You won’t need to do manual error detection anymore, and therefore you’ll receive the information faster.
We can handle any EDI format
Our solutions can understand any data format and translate it to your preferred format while transferring the data to you or to your partners. Rapidly transforming the data will help you to process the information better and faster.
What EDI transactions do we support?
To learn more about which EDI transactions we support, take a look at the EDI Transaction sets from different industries:
Editor’s note: This article was originally published in 2018. It was updated on February 8th, 2023, to reflect the most current information. Andrei Radchenko contributed to this story.