EDI AND ITS BENEFITS

WHAT IS EDI?

EDI is the electronic exchange of documents and data between trading partners' computers. Transmitting data and documents between computers replaces antiquated business processes such as fax, postal mail, email, and phone calls—many companies are still using these outdated methods, hampering business-to-business relationships. Also, many companies (industry leaders, especially) now require EDI from potential trading partners.

BENEFITS OF EDI

1. BETTER RELATIONSHIPS

The most important, and the most understated benefit of implementing EDI to manage document systems is that it builds better relationships between trading partners. Documents and data transmit to the appropriate departments quickly and accurately generating productivity. Companies like productivity. Also, not having to wait to gain vital documents creates certainty companies enjoy. Merely having EDI as a service will help attract new customers.

2. ELIMINATES ERRORS

The computer-to-computer process eliminates errors introduced by people manually processing documents. Often, in the manual process, people are handling and entering data within several steps before the documents get to their final destination, exacerbating the problem. People make mistakes through data entry, illegible writing, mishandling documents, and mismanaging phone calls and faxes. The systemized, simplified, and automated process of EDI ensures accuracy and transparency, eliminating errors at the EDI level.

3. INCREASES EFFICIENCY

EDI increases efficiency exponentially. Managing data/document systems through Electronic Data Interchange simplifies several systems expediting essential business practices, especially for companies trading goods. For example, sending a purchase order at one time took days or weeks, now it takes minutes or hours. Simplifying the purchase to pay process quickens cash flow. EDI also enables suppliers to operate with little inventory through the ability to foresee upcoming orders and needs of trading partners. Likewise, a faster rate of return is experienced. Optimizing efficiency through EDI significantly impacts businesses positively and creates tangible growth opportunities.

4. CUTS PRINT COSTS

Paper costs, in general, are significantly reduced through EDI. Electronic Data Interchange replaces the fax, postal mail, the need to make copies, and the need to store various forms. With EDI, documents are more secure and aren't lost and, thus, will not need to be replaced, also lessening print costs. Inks and toners used in fax machines and printers are also savings EDI brings to a business.

5. REDUCES LABOR

Labor hours can be reduced or redirected once EDI is in place. Filing, faxing, mailing, phone calls, and document retrieval no longer need to be managed by staff (for data and documents transmitted via EDI).EDI's accessibility is now similar to email. You can view and retrieve transmissions and documents similarly to email applications. Many companies outsource EDI services to VANs (Value-added Networks) allowing experienced experts to set up and manage their EDI service. Outsourcing EDI to a VAN cuts down labor by enabling staff to focus on critical company needs rather than their EDI service and also by companies not having to have an in-house EDI position.