Your company already has electronic data interchange (EDI) in place automating and streamlining B2B transactions. Some of your trading partners have also implemented EDI. Others have not.
In a perfect world, all of your trading partners would be utilizing EDI. Transactions would be faster, smoother, and error-free, creating much quicker ROI. Industry leaders from many fields (such as Amazon.com, Wal-Mart, Medicare, and CAT) require EDI from all trading partners.
Understanding the perceived challenges of newly implementing EDI will help your trading partners in adopting EDI.
The Belief that manually operating doesn’t hamper production
Most companies still using manual processes for their B2B systems believe they are not slowing down production. They have likely analyzed and adjusted their procedures and believe in their efficiencies.
While this belief may be accurate if all trading partners are operating manually, EDI’s use is becoming ubiquitous. Trading partners slow to adopt EDI bog down efficiency. For example, in supply chain management, if one trading partner manually handles a receiving order, it affects all partners in the supply chain. The chain stops until the documents have been manually managed. Automation happens instantly and 24/7.
Perception that EDI solely benefits the company requiring it
Companies often believe that adopting EDI to trade with a company only benefits the company requiring it. It is true if a company requires EDI, they benefit from other companies utilizing EDI. Moreover, if a company minimally implements EDI to trade with one company, finding ROI may be difficult.
Companies often require EDI without providing the resources facilitating the benefits gained through EDI. When a potential trading partner does not meet the requirement of having EDI, they often look for a different company’s interest. The irony is that the company requiring EDI will likely generate greater revenue for the trading partner. Industry leaders require EDI: trading with industry leaders equates to more revenue in any industry.
EDI is inherently cost prohibitive
If EDI is foreign to a company, they believe EDI will require hardware, software, and an EDI staff (or consultant). This belief may be true, depending on how a trading partner newly approaches EDI. EDI requires hardware to function, software to operate, and someone familiar with EDI needs to set it up and maintain the system.
If purchasing hardware and software, and hiring an EDI staff, you would be setting up an in-house EDI system. This may make sense for some companies, cost prohibitive for others. However, there are many EDI solutions and options available to companies of all sizes, and all budgets.
EDI operates autonomously from other business systems
Companies perceive that an EDI system will function separately from other business systems in place. If EDI functions independently, a company will still have to enter manually the data into their existing business systems. If this were true, adopting EDI to automate B2B data transmissions would create an additional process to a company’s business system.
Businesses have systems operating their day-to-day operations. Adding EDI to the business, without integrating it into their system, will require additional attention from staff. After significantly investing in, for example, an ERP, companies believe the addition of EDI will lead to new expenses of operational software.