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EDI GUIDE

EDI

Understanding the Basics of EDI

E.D.I.

E.D.I. is the prevalent means of exchanging transactions between both small and large companies. The key benefit of exchanging information via E.D.I. is reduced costs and increased productivity. Even for the small business owner, E.D.I., can provide significant benefits. Electronic Data Interchange (E.D.I.) was born out of the need to reduce cost of processing paperwork while increasing throughput and decreasing error rates. The automotive industry was one of the earliest adopters of E.D.I. due to their need for "just in time" order and delivery processes. E.D.I. however has become critical to a broad spectrum of industries. 

E.D.I. Comes to the Small Business

E.D.I. has been available as a technology for well over 30 years. Automotive, retail, grocery and transportation industries were some of the earliest adopters of E.D.I. in an effort to reduce costs while maintaining tight control over customer service and quality of service. E.D.I. provides a number of benefits for businesses including increased accuracy, decreased timelines and ultimately a vastly improved customer experience. As E.D.I. has become more prevalent in large organizations, their smaller partners have had to adjust to an E.D.I. world as well. Larger partners will typically require smaller customers and vendors to use E.D.I. For these smaller organizations, adopting E.D.I. has often been a question of compromises. E.D.I. can seem a scary and problematic technology, but there are solutions available that help bring the power of E.D.I. to even the smallest organization. 

The Stages of E.D.I. Adoption

As small businesses investigate E.D.I., the natural inclination is to think "I'll let someone else deal with it." This is how E.D.I. service bureaus and 'web-based' E.D.I. vendors attract most new customers. For small businesses that have very limited E.D.I. needs these services and web-based systems provide a viable first entry into the world of E.D.I. As the business grows, however, it quickly will become apparent that outsourced E.D.I. can become expensive and problematic. The reasons for this are simple - the key advantages of E.D.I. are based on cost savings that come from reduced paperwork and improved workflow. Web based and bureau based E.D.I. however still requires you to print orders and manually input invoices. It is this manual process that negates the advantages of E.D.I. that ultimately leads businesses to consider an in-house software solution. Bringing E.D.I. in-house is the long-term solution that any business can afford.

Becoming E.D.I. Strategic

As you begin considering if E.D.I. should be an in-house investment for your company, consider a few key questions. First, how much of your business must be processed using E.D.I.? If your larger trading partners require E.D.I. you may have no alternative but to adopt it. Second, how are your costs of data entry and order processing affected by E.D.I? If you see that your order processing and data entry costs are escalating, E.D.I may be able to decrease them. Finally, how quickly is your business growing? If you are in a fast-growth business, E.D.I. is going to allow you to continue that growth unimpaired by limitations of people or resources. Understanding how E.D.I. can affect and benefit your business will provide you with a clear roadmap of what to do and when to do it. Understanding and embracing the technology will mean direct rewards for your business.

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