Too often new companies overlook EDI (Electronic Data Interchange) in preparing for their launch. Perhaps, EDI is left out because the technology is believed to be expensive. Or, because EDI doesn’t even seem relevant to a new company, maybe even EDI is an entirely foreign term.
On top of the inherent benefits EDI offers, here are 6 reasons all startups, regardless of size, must include EDI in their business model:
Industry Leaders Require EDI
From retailers to the medical field, logistics to billing companies, industry leaders in every field that trade goods and services utilize EDI to optimize their business operations. Many industry leaders require EDI from their trading partners.
If an industry leader does not require EDI, they prefer it. Having EDI in place at launch gives a competitive advantage, especially to startups with similar products vying to be picked up by retail giants, like Amazon.com and Wal-Mart. Implementing EDI from the get-go shows that startups know their product/service will be picked up by industry leaders and streamlines selection decisions from industry leaders in a competitive market.
EDI is Affordable
EDI technology is no longer exclusively for industry giants with massive budgets. According to a press release from Larry Marshall of BOLD VAN, “Today, with billions of people online, cloud infrastructures, and advanced networks, the cost of moving data is a fraction of what it used to be.” Companies of all sizes outsource their EDI services to Value-added Networks (VANs) minimizing the costs and labor involved in managing an EDI service. Different VANs have different fee structures, such as charging for the amount of data being transferred, compared to VAN’s charging by the number of trading partners with unlimited data. You may now outsource your EDI service for less than $40 a month creating affordability for any company.
No Extra Hardware
When a VAN manages EDI services, creating a budget for the hardware to run Electronic Data Interchange is unnecessary. For example, BOLD VAN operates from the cloud, making managing EDI similar to managing emails. The Electronic Data Interchange can be viewed from any device: computer, laptop, tablet, and even a smart phone. Transparency and accessibility are attained without the extra expense of hardware.
Better Relationships with Trading Partners
Fewer errors, quicker communication, efficient document management, and simply having EDI capabilities leads to long happy business-to-business relationships. As much as businesses enjoy a friendly voice, they enjoy functionality more.
Better Cash Flow
Return on investment (ROI) is imperative to a new company. EDI expedites this process exponentially. The vast majority of companies involved in trading goods and services transmit invoices, purchase orders, ship notices and many other documents via EDI. And, errors introduced by manually sending and handling these documents by people rather than computers are brought to a minimum. A quicker documentation system leads to quicker payment. Quicker payment leads to quicker ROI. Quicker ROI leads to quicker cash flow. Optimizing rate of return and improving liquidity through EDI allow startups to achieve financial goals competently.