As an IT Manager you’ve been tasked by the MD with implementing an EDI system which complies with several partner EDI solutions but is within budget and can be delivered within a short space of time. So what are your options right now and what is scalable for the future as other customer partners and suppliers come on board with their own requirements?
Two Main EDI Solutions
The first thing to define is what is EDI? Well it is electronic data interchange, put simply, the way data and documents are sent between companies. It replaces the paperwork that used to go back and forth between a supplier and a customer when an order was placed. There used to be several pieces of paper sent back and forth to make an order, fulfil it and then pay for it. Now with EDI this is all automated and no paperwork is produced. This speeds up the ordering process and cuts costs on manual data entry and documentation production and storage.
There are two main EDI solutions, Web EDI and Internet Based EDI. They sound like they are the same thing actually but the two terms define two very different solutions.
Web EDI is the SAAS solution using browser based software hosted on the provider’s server to manage the EDI. This is typically a monthly subscription payment model with no upfront cost. The Web EDI providers update their software regularly so that they comply with all other major EDI solutions and also plug into ERP systems in-house.
Alternatively Internet Based EDI is the older solution whereby you invest in hardware including servers to host a piece of EDI software that then uses standard internet protocols such as HTTPS or FTP to securely package and send packets of data to customer’s systems. There is a large upfront cost to this solution, because you have to buy and set up hardware and also purchase and implement the software.
Things to Consider When Choosing Between Web EDI and Internet EDI
Straight off the bat it would appear that Web EDI is the best solution, and it often is for smaller companies getting into EDI. But it has limitations which mean its not always the bets solution as a company grows. Here are some of the limiting factors:
Cost – the cost of Web EDI is spread of course which helps when you’re in start up mode but once you’re established and perhaps have a budget set aside the cost of Internet Based EDI is cheaper over the long term. This is particularly true when you increase the amount of data you are sending because SAAS Web EDI pricing is usually tiered based on data sent.
Speed of Data Delivery – with Web EDI the software provider is receiving data from all of its software users and then sending it out to multiple data receivers. To do this economically they package data and schedule it in intervals so your data will inevitably be delayed in arriving at your customer’s system.