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EDI (Electronic Data Interchange) provides a host of benefits for companies of any size. Many companies deciding to bring EDI into their business system come to the same crossroad: does it make more sense to implement EDI in-house or is outsourcing your EDI service the best solution?
Of course, the answer is that both options are the right choice for different businesses. Let’s take a look at both scenarios.
Taking on EDI in-house makes a lot of sense for some companies. The initial expense is substantial. However, if you are exchanging data with hundreds of trading partners at a large volume, handling EDI in-house may be your best option.
Here are some typical requirements of an in-house EDI system:
Updating your hardware and software is vital in ensuring compliance with various standards and protocols. Scalability is also an important consideration when initially budgeting your EDI system. Your system should be capable of growing with you (and your trading partners).
Businesses often outsource their EDI services to Value-added Networks (VANs). You should have virtually no initial expense when outsourcing your EDI service. Rather you pay monthly to have a company handle all the complexities of EDI.
In a typical VAN scenario, you would enter the data you need to send into your “mailbox.” The VAN then delivers the data to your trading partners “mailbox.” You may think of a VAN of as a postmaster. A VAN simplifies EDI making it accessible for any company that wants to implement EDI into their business system.
There are two typical outsourcing configurations:
While these two configurations are thought of separately, some VANs do both. The solution would depend on your needs. VANs typically base their pricing structures amount of EDI data you transmit in a billing cycle. Advocates of implementing EDI in-house often state this structure as the reason not to outsource. The cost of moving data has significantly decreased over the years, but this pricing model persists.
BOLD VAN, however, offers trading partner pricing. You can exchange data across BOLD VAN’s lightening-fast VAN. You are charged based on the number of partners traded within a billing period.
Finding the right solution for your company depends on your needs and goals as a business. EDI’s benefits are incredible and accessible regardless of your company’s size.
If you’re unsure what the right solution is, outsourcing is likely the appropriate option. The initial cost is minimal and if you later to decide to handle EDI in-house, you can without losing an initial investment.
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