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EDI Service

Understanding the Basics of EDI


What is EDI Service?

The term EDI service can be used to describe a wide range of things. Generally speaking an EDI service refers to some form of work performed by an organization or individual who is outside of your company and is employed as a consultant or as a 'provider'. In "industry parlance" and EDI service most often refers to:

An EDI Service Bureau
An EDI Service Consultant
An EDI Service VAN

The EDI Service Bureau

An EDI service bureau focuses on small businesses who have such little need for EDI that the costs of a dedicated in-house solution can't be justified. EDI service bureaus are popular in the retail value chain where EDI use is mandated by retailers. For smaller suppliers the EDI service bureau helps meet these mandates at reasonable rates. While the EDI service bureau can be beneficial, over time and as usage of EDI service increase, many small businesses find that the EDI service bureau becomes too expensive and must be replaced with in-house software.


The EDI Service Consultant

When a small business outgrows the EDI service bureau it's very common for them to employ an EDI service consultant to help them transition to an in-house software solution. The skills of an EDI service consultant can vary widely so it's very important when selecting one to ensure that you have outlined your current needs. For most businesses that are transitioning to in-house EDI, the EDI service consultant plays the role of both technical advisor and implementation expert. This EDI service consultant should have a broad range of experience and be willing to consider any software solution. Be weary of EDI service consultants who insist on pitching only one EDI Service or company.

As you select the EDI software and switch to the implementation phase, the EDI service consultant should provide you with the skills necessary to install and configure the software as necessary. It may be helpful to work with an EDI Service Consulting firm that can provide both pre and post-sale consultants who can give you the advice you need when you need it most.


EDI Service VANs

An EDI Service VAN is an electronic network set up to facilitate the exchange of EDI transactions between several parties. An EDI Service VAN traditionally serviced anyone doing EDI, but with the advent of the Internet, EDI service VANs are not as necessary to facilitate business to business e-commerce. Today EDI service VANs have enhanced their operations to survive, and they have become significantly more customer friendly and less expensive than before. EDI service VANs today compete from a perspective of value added services and not only by providing the technical infrastructure for the EDI service.


Selecting an EDI Service

Choosing your EDI service can be as daunting as choosing EDI software. There is a wide range of EDI service providers who can do anything from basic consulting to completely taking over your EDI operations. For a small businesses the first step in selecting the right EDI service is to consider what that EDI service will need to provide for you. Specifically, will you need an EDI service to help you understand and plan your EDI strategy? Will you need an EDI service to help configure your software and set up your operations? Or will you need an EDI service that can simply do it all for you? The answers to these questions will help you determine first and foremost which type of EDI service you should consider.


Keep an Eye on Your EDI Service Costs

If the type of EDI Service you plan to use is a VAN or EDI Service Bureau, one important consideration in selecting the EDI Service would be maintaining a reasonable level of cost. As soon as the EDI Service begins to cost upwards of $2,500 to $3,000 per year, any small business might want to consider switching from the EDI Service to an in-house solution. That’s because the EDI Service, which charges based on a variable pricing plan, often becomes prohibitively expensive as usage increases. The EDI Service, in this case, is a viable option only for starting out with EDI. Once your volume has ramped up enough to increase your monthly EDI Service costs significantly, switching from the EDI Service to an in-house EDI solution would probably be more advantageous.

When you have selected your EDI Service, it’s critical to establish a clear line of responsibility. As your business grows, you will probably want to decrease your reliance on the EDI Service and begin to do much of the work yourself. The selection of an EDI Service, therefore, should be based not just on the prices charged by the EDI Service or the type of work the EDI Service is capable of performing. Whatever type of EDI Service your business ends up selecting, it will be critical to ensure that the EDI Service is aligned with your goals and objectives.

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