4 minute read

Supply Chain Automation via EDI - The Four Main Hurdles

Looking at the benefits that Electronic Data Interchange (EDI) can bring to an organisation, implementing an EDI solution seems like a no-brainer. But EDI integration in modern ERP systems is a complicated process. As a result, implementing and operating in-house EDI solutions is becoming less and less attractive for those seeking improved supply chain automation – with a growing number opting instead for a fully managed solution. The reason for this shift? Principally because fully managed EDI solutions offer the simplest way for businesses to overcome the four main hurdles of EDI integration…

Hurdle 1: Standards

EDI document standards were created to make supply chain automation easier by providing a set structure for commonly used B2B documents. However, as EDI has evolved over the decades, more and more standards have been created to cater to increasingly specific requirements across different industries and geographical areas. The image below, for example, illustrates how the need for increasingly specific formats has led to the creation of a multitude of subsidiary standards under the umbrella of the EDIFACT core standard.

Faced with this ever-growing maze of standards and formats, businesses require the ability to send messages via various protocols and convert messages easily between multiple different formats.
Supply Chain Automation Diagram 1 

Hurdle 2: Technology

Thanks to recent innovations such as APIs and common import and export interface standards of ERP systems (e.g. based on XML or JSON), businesses have ostensibly never been better positioned to achieve widespread supply chain automation.

Unfortunately, however, many businesses are hampered by extremely complicated legacy IT landscapes and are therefore unable to experience the benefits of streamlined EDI. As illustrated by the diagram below (which shows the genuine IT landscape of a large retailer pre-upgrade), often legacy systems include several separate information silos and connections to multiple service providers. With no central governance and such a wealth of areas where errors could occur, internal teams are often scared to touch anything in case they disrupt or break mission critical processes.

Similarly, some ERP systems are so basic that they are unable to exchange structured files. This capability must therefore be implemented before EDI functionality can be integrated.

Supply Chain Automation Diagram 2 

Hurdle 3: Processes

Whilst selecting middleware that can handle your business’s technical requirements is obviously important, even more important is establishing the right processes, as without these lasting success is impossible. Though integration admittedly requires expert knowledge, the technical aspect of integration is often the easiest part, with Gartner noting that:

“Only 5% of the interface is a function of the middleware choice. The remaining 95% is a function of application semantics.”

Successful supply chain automation via EDI relies on efficient processes. For example, monitoring and support processes are essential if errors are to be identified and resolved before they impact partners.

Generally, successful EDI processes rely on the following key factors:

  • Deep application and domain know-how of the business involved
  • Technical capabilities
  • Available resources
  • Project management skills
  • Project management support (e.g. onboarding tools)

White Paper - 7 Mistakes EDI Solution Buyers Make

In an effort to save costs and gain more transparency regarding B2G invoices, many governments have introduced legislation dictating how companies should format and transmit structured electronic invoices (a subject we cover in detail in our e-invoicing white paper). Since April 2020, for example, the majority of European government bodies have been required to accept electronic invoices. Further, from November 2020, suppliers will no longer be allowed to send German public bodies unstructured invoices (such as PDF or paper invoices). The introduction of regulations relating to the transmission of B2B e-invoices and orders may also not be too far away in some countries.

Given the geographic reach of most modern supply chains and the pace at which e-invoicing legislation in particular is being created and amended, staying on top of regulations is no easy task. Non-compliance with regulations is not an option, however, as it can bring large fines.

Want more information on how to overcome these hurdles?

This article is a snippet from our white paper Unlocking the Secrets to Successful EDI Integration. In this paper we explore the development of ERP systems, how EDI fits into modern systems, how to avoid common integration headaches, the benefits of full EDI integration and how to ensure your integration project is a success.

To download your copy and find out how you can implement (and benefit from) a solution that is able to overcome all four of the hurdles discussed in this article, simply click here and fill in your details.

Alternatively, if you have any questions about supply chain automation or anything else EDI related, feel free to get in touch! We are always happy to help!

most read

Keep on reading

10 minute read

EDI vs API: A Battle of Brothers

In recent years many have suggested that API may eliminate the need for EDI. But is this really true? And are they really rivals?

6 minute read

Expert Perspective — Christoph Ebm: EDI Post-Covid

In this insightful interview, ecosio CEO Christoph Ebm shares his thoughts on supply chain resilience and what the future holds for EDI.

7 minute read

Choosing an EDI Platform - A Breakdown

Looking for advice and information on EDI platforms and what what to look for when deciding between the various options? Look no further!

7 minute read

A Guide to Efficient EDI Systems

In this article we break down what an EDI system is, what different types of system offer, and things to remember when selecting a solution.

9 minute read

EDI Integration: What is It and How Can It Help Your Business?

Efficient EDI integration can have a transformative effect on your business. Read our article to find out how it can benefit you.

2 minute read

ecosio Becomes a Partner of GS1 UK

ecosio is proud to be a partner of GS1 UK and helping to help shape the future of GS1 standards and support industry-wide development.

4 minute read

The Most Common ANSI ASC X12 Party Identifiers and How to Use Them

ANSI X12 party identifiers are a common source of errors. In this article we explore how to avoid issues and what the most common X12 party identifiers are.

9 minute read

Using EDIFACT Parties Correctly - A Breakdown

Errors involving EDIFACT party codes (or EDIFACT parties) are a key cause of master data issues. Find out why.

8 minute read

What is Master Data Synchronisation and Why is it Needed?

Find out how conducting a master data synchronisation can make everyday EDI exchanges and partner onboarding easier and more efficient.

10 minute read

A Brief Introduction to Modern EDI Systems

Are you aware of what modern EDI systems can offer? In this article we explore the recent trend towards fully managed solutions.

5 minute read

The Three Most Common EDI Pitfalls

While EDI can offer substantial benefits, achieving the perfect solution isn't always easy. Read our article to find out where many go wrong.

4 minute read

The Five Top EDI Trends: Expert Forecast

In this article we explore five current EDI trends and the extent to which they reflect the future of EDI more widely.

We use cookies to provide an optimal website experience. You decide which one you want to allow. Depending on the setting, however, not all functionalities may be available to you. Data protection & imprint.