With limited knowledge of the current electronic data interchange (EDI) landscape it can be tough to identify whether or not it is in your company’s interests to move on from your existing Value Added Network (VAN) supplier. Unfortunately, many businesses persevere with legacy systems due to a combination of fear of what is involved in changing to a new VAN provider and ignorance of the benefits offered by transitioning to a new system.
Often these reasons are further buttressed by decision makers’ confusion regarding the exact nature of the often labyrinthine data exchange systems currently in place in their organisation. Due to the gradual and organic nature in which legacy data processes evolve to cope with the constantly changing requirements of growing businesses, clarity regarding networks, connections, mappings etc. is often lost along the way. Unfortunately, in these situations it is impossible for EDI to be used as a strategic instrument. Instead, complex and outdated processes are likely to lead to dangerous errors.
Having an outdated EDI process in place today is more dangerous than ever. Things can spiral downwards extremely quickly as unreliable data exchange leads to you getting a bad ranking as a supplier, in turn leading to reduced quality ratings and ultimately to you occupying a much worse negotiating position in future customer discussions. You could even end up on the dreaded no-bid list!
Given the business-critical nature of the information being exchanged and the dangers of retaining outdated or overly complex systems, the decision to transition to future-proof your B2B integration processes is an extremely important one. This article aims to provide you with a simple list of things to think about to help you identify whether or not your current VAN is well-placed to help your business grow, what is involved in switching providers and when to move on.
What is a value added network (VAN)?
Simply put, a VAN is a privately hosted service which provides a means for companies to trade data with partners. These networks provide benefit to businesses by simplifying the means of communication. As we will explore, however, a VAN provider can offer far more than simply acting as a data conduit between business partners.
For a more detailed explanation, our introductory article on this subject can be found here.
Is your current set-up working for you?
Too many VANs spoil the broth
As we’ve already touched on, one commonly experienced issue with legacy data systems is their complexity. One factor often adding to this complexity is the use of multiple VAN providers. While this may not immediately seem like a problem, it does come with various downsides, including:
- Higher costs – While you might not be paying each of your current VAN providers much, the combined total for managing data exchange processes via multiple VAN providers will inevitably cost more than if you were to transition to a single provider.
- No single responsibility – A huge benefit of outsourcing critical data processes such as e-invoicing is the ability to pass the responsibility for monitoring messages to a third party. This benefit is hugely undermined when multiple providers are involved.
- Less flexibility – Whether it’s changing trading partners or switching focus to a new market or region, businesses are constantly evolving. In order to cope with this change it’s important that your B2B processes are flexible. Unfortunately, when multiple VAN providers are involved flexibility is compromised, leading to frustration and delays surrounding updates and adjustments.
Can your VAN supplier meet your current AND FUTURE needs?
Without visibility of what else VAN suppliers may be able to provide it can be difficult to identify areas where a new or existing VAN system is lacking. Further, too many businesses fail to consider the extent to which their B2B integration partner will be able to meet their future requirements. Below is a list of things to consider when assessing potential providers to ensure you benefit from a reliable, flexible and future-proof system:
- Data transparency and ease-of-use – Access to real-time information regarding your EDI via a user-friendly platform is important to monitor current performance and identify areas for improvement. With this in mind, check that your prospective provider can offer the following:
- Status overview of all sent and received messages
- Full text search of all sent and received documents
- Flexible message statistics and graphical representation of your communication flow
- Message archive with customisable retention periods
- Download option for local processing
- User management with unlimited users
The ideal EDI solution is one which is embedded in your existing ERP system, enabling EDI processes to be seamlessly integrated into your user interface.
- Scalability – As your business grows and your partners and inbound/outbound messages increase in number it’s important that your key logistics processes are able to keep up. Choosing a provider that can offer additional benefits when needed, such as supplier relationship management features or web-based EDI connection, will ensure you are fully prepared for any future growth.
- Support – While most VAN suppliers will offer “support”, the level and accessibility of this support varies greatly. In addition to checking how easy it is to get hold of someone who can help you fix any issues quickly, make sure you select a provider that offers proactive (rather than simply reactive) support, as this will ensure potential issues are caught before they are able to develop.
- Ease of partner integration – Onboarding partners is often viewed as a time-consuming and headache-inducing process. By selecting a VAN provider that will manage the onboarding process from start to finish this need not be the case. If you are likely to be interacting with partners who don’t currently have EDI systems in place, selecting a provider that can offer them a web-based EDI connection is also extremely important.
- Monitoring and proactive alerting – Whether you’re concerned about checking that messages have been sent and received, renewing certificates or ensuring correct e-invoicing protocols are followed, choosing a provider that offers efficient round-the-clock monitoring of data processes and proactive alerting can provide peace of mind and relieve pressure on in-house teams.
- Analytics / SRM – Access to key performance indicators (KPIs) and metrics relating to your suppliers can be hugely useful in helping you to identify areas for improvement. A good VAN provider may even allow businesses to set targets for partners, in turn helping them to meet expectations.
- Ongoing updates – Although EDI is far from a new technology, data exchange processes and protocols are constantly improving. Unfortunately, however, many VAN providers are not future-focussed and may neglect to implement important updates relating to key new requirements. For example, not every VAN provides access to Peppol, which in turn can cause a big issue with e-invoicing. By choosing a VAN provider that is committed to implementing updates in line with these ongoing developments you will ensure your organisation’s data exchange processes to continue to function at optimum level.
- Pricing structure – Just like the levels of support and quality of monitoring offered by VAN providers, pricing structures can also vary greatly. Even if you are satisfied with the price quoted to handle your current EDI needs, make sure to consider whether their structure suits your future needs. Many contracts include prohibitive “price cliffs” which can prove extremely costly if your EDI usage changes.
For a detailed breakdown of how much work is done by different EDI providers, download our infographic on this topic.
Other things you may want to consider before switching:
- Do they have experience in your industry?
- What is their reach geographically?
- Are case studies available?
- What is included in the service – will the EDI provider look after mapping and conduct thorough testing?
What’s involved in switching VAN provider?
Arguably the biggest reason businesses put off changing VAN providers is fear of what the process will involve and the potential consequences if things were to go wrong.
It’s true that, handled incorrectly, switching VANs could result in not being able to send or receive information if messages are sent to the wrong place or a VAN doesn’t recognise traffic due to routing or mapping issues for example. However, this is not a problem when the process is handled by a capable provider. In addition to having experience in connecting to all commonly used VANs internationally, from Ariba to X.400, a good provider will provide a dedicated project manager to oversee the migration process from start to finish, ensuring the switch is as fast and efficient as possible.
While the time needed to complete migration depends entirely on your particular situation, with an experienced provider offering expert support there should be no issues or disruption to you or your partners’ businesses.
“When should I switch?”
Once you’ve decided to move away from your existing VAN it makes sense to go ahead with the data migration process as soon as you are able to. Often switching VAN suppliers comes at the end of a long period of assessment of and/or dissatisfaction with existing providers – why stretch the process out any more? The sooner you switch, the sooner you can experience the benefits of efficient B2B integration!
Find out more
For more information about ecosio’s unique B2B integration solution and how it could help your business, click here.
Alternatively, if you have questions about your specific situation please contact us or use our chat – we are happy to help!