How do you understand EDI and choose the right solution for your business? Whether you’re just starting with EDI or replacing an outdated solution, it’s crucial to get this right. Picking the wrong EDI software for your situation can saddle your company with ballooning costs and limited capabilities.
Luckily, you can choose the right software with a careful approach that uncovers all your needs. Here’s how we collaborate with our clients to make this decision.
1. Scope your requirements
Your choice of EDI software will directly impact your operations, your relationships with trading partners, and your bottom line. You want to be fully informed when you make this decision.
To help our clients choose the right software, we go through a rigorous analysis that uncovers every requirement. At a high level, these requirements fall into several categories:
- Your business processes—both those that are standard and those that are unique to your organization.
- What your trading partners need from you in terms of data standards, document types, and more.
- How many trading partners you need to work with today—plus your potential EDI opportunity with additional trading partners.
- How you plan to grow your EDI program over the long term.
- Your budget for EDI software (and whether you prefer “capex,” i.e. capital expenses, vs. “opex” or operating expenses).
Your needs will drive everything about your EDI software. But to make an informed decision, you also need to understand the terminology of the EDI world.
2. Understand the basics of EDI software terminology
EDI software is complex, and there are many parameters that require decisions to be made. While you don’t need an expert-level understanding, we always help our clients become familiar the basics of EDI terminology so they can make smart decisions.
At a high level, all EDI solutions have two major components to them:
- Communication—i.e. the actual movement of data.
- Translation/transformation—i.e. the conversion of data from one format into another.
You can think of communication as the transfer of data. It’s not about the format of the data, but the process of sending and receiving it. Different EDI software handles communication in different ways:
- Direct (point to point via sFTP, HTTPS, and so on)
- VAN (value added network)
- API (technically a subcategory of direct)
- A combination of all the above
Which communication protocol is right for you? The answer will depend on many factors. It’s important to work with an EDI provider (like Corsica Technologies) to ensure you’re set up for success.
Direct vs. VAN
Of course, there’s one important distinction to get right: direct (or point to point) vs. VAN (value added network).
In a nutshell, a direct connection does exactly what the name says. It connects you to a trading partner with no third-party EDI software sitting in the middle. It’s often the most economical choice if you have very few trading partners and a high transaction volume—and if you don’t mind a higher capital expense.
A VAN, on the other hand, is a third-party solution that handles connections with multiple trading partners under one umbrella. It’s often the most economical choice if you have many trading partners and a lower transaction volume—and you don’t mind ongoing operating expenses.
It’s important to uncover all these parameters so you make the right choice. That’s why we work closely with our clients to understand their needs and their preferences in terms of cost models.
On premises vs. cloud
Traditionally, on premises hosting was the only option for EDI software. This model requires purchasing your own servers, installing and configuring the EDI software, and managing it on-premises (typically through a services provider like Corsica Technologies).
With the rise of cloud technology, cloud-hosted EDI has also grown in prominence. Under this approach, also known as web-based EDI, the provider handles servers, hosting, and software upgrades.
So which one is right for you?
As with so much in the EDI world, the answer depends on your requirements. On-premises software comes with more responsibility (typically handled by a service provider), but it also offers more flexibility. Over time, it may be more cost-effective for high transaction volumes.
On the other hand, cloud-based EDI software may be easier to launch—but it may struggle to keep up with evolving needs over time. An EDI service provider like Corsica can help you determine which model is right for you.
EDI software integrations
EDI isn’t much good if you can’t send and receive documents to and from your backend systems. Whether it’s your ERP, CRM, SCM, WMS, or a combination of these, your EDI software needs to talk to the systems where your business lives.
But EDI integration is a tall order. Your mapped fields will change whenever an integrated system changes. These fields can also change when a trading partner updates their fields. If you don’t account for these changes, your EDI integration will break down. You’ll get errors and exceptions that directly impact your operations and your relationships with trading partners.
This is one of the biggest reasons you need a strong EDI service provider—one who really puts services first rather than focusing on software sales. Here at Corsica, we make sure you get the right software—but we also bring the service commitments of a leading MSP to your EDI solution. It’s a rare combination that you won’t find elsewhere. (More on that in a moment.)
3. Determine your ideal future state
It’s one thing to account for your EDI needs today. But where are you going as an organization?
What trading partners could you do business with—if you had the right EDI software?
A smart approach to EDI will consider your entire opportunity. This means both the trading partners who are low-hanging fruit, and those who may seem impossible to reach. It may even include opportunities to work with trading partners that you haven’t even thought of.
This is the ideal future state of your EDI program—connected to every trading partner who’s a great fit. You may be able to get there on your own, but most organizations see the best results when they work with an expert EDI provider like Corsica Technologies. The right partner will go far beyond software parameters, helping you define your EDI strategy and a roadmap for success. You should never buy EDI software without going through this exercise.
4. Understand your EDI software support burden
All EDI software needs support services. EDI is a living, breathing entity, and you need experts keeping it healthy.
But your choice of EDI software is important. It determines what kind of support you’ll need.
For example, a single direct connection with a single trading partner will require a certain amount of dedicated support. Every time you or your trading partner updates a field, those maps will need to be adjusted, tested, and refined.
But what happens if you need to add another direct trading partner—or three more?
Suddenly things get way more complicated. Changes to one direct connection apply only to that connection. When it comes to supporting direct EDI connections, there are no economies of scale.
This doesn’t mean that a direct solution is the wrong approach. Rather, it means direct is a great fit for some scenarios—and not a great fit for others.
That’s just one example. Your exact support burden will depend on your EDI software, your integrations, the number of trading partners you have, and how often things change.
All of this is unpredictable. Which leads us to the final (and most important) point.
5. Choose a partner who offers Unlimited Technology Services
The support requirements for EDI software can be unpredictable. Errors and exceptions can come out of nowhere, even if you keep in close communication with your trading partners.
Add backend integrations to the mix, and there’s a lot that can go wrong.
Most EDI providers offer some sort of “metered” pricing—i.e. they’ll create an SOW for just about anything. If you need to update a field and some mapping, that’s an SOW. Adding a trading partner is also an SOW—and so on.
This leads to unpredictable bills. One month, your EDI support bill may be lower, while you get hammered with a big bill the next month.
Luckily, there’s an easy way around this.
Look for an EDI provider (like Corsica Technologies) who offers unlimited technology services for one predictable monthly price. This way, you get one budgetary line item that covers all the nitty-gritty details of EDI software support:
- Adding new fields
- Mapping data (new or updated)
- Handling exceptions and errors
- Adding a new trading partner
This pricing model is quite rare in the EDI world. That’s why our approach stands out. Rather than nickel-and-diming you for every minor problem or requirement that comes up, we give you one predictable price and easy service coverage that keeps your EDI software running smoothly.
In the world of EDI, that’s a great thing to find.
Looking for the ideal EDI software?
Reach out to schedule a consultation with our EDI specialists.
