How familiar are you with the acronym EDI? It stands for “electronic data interchange”. Do you know how it can be applied to your business?
Put it this way, if you are making money doing business you need to be communicating with other people or companies in this world (unless you are working in a complete silo). Thus, you are surely creating or exchanging some types of business documents. For example, you receive Purchase Orders from your customers and return Invoices that you create and submit back to them in order to get paid for the services or product you supply. All those documents you create and exchange using Excel, Word, PDF, email, or any other method can be recreated using EDI.
Now, you ask, how can it be applied and what are the benefits? Working at Meade Willis, an EDI and supply-chain software company that was an early adopter of EDI, we have had many people from small to enterprise-level organizations ask us the same question. Whether you are just starting your journey to digitize some key processes or come from a megacorporation – don’t be hesitant to ask questions. It is surprising that even though EDI was first adopted by companies in the late 1960s, some companies still have no idea what EDI brings to the table. A fun fact here, I recently visited a multi-million-dollar company in Bolivia to discuss how they can adopt and benefit from EDI practices within their supply chain. They were very proud of being among the first companies in their country to automate this part of their fast-growing business.
Now to answer the question about how EDI applies to your business. There are several scenarios to consider. Let’s concentrate on two main ones, small and large businesses. The first scenario relates to small businesses that must comply with the demands of their large customers. For example, John, a small farmer who sells his delicious strawberries at the local Walmart, is obligated to send multiple sets of documents in an electronic format in order to do business with them. As you can imagine, due to the volume of information in Walmart’s supply chain, no Walmart employee will pick up a phone call from John and note that he will be sending 3 cases of strawberries sometime next week. Not at all, to comply, John goes to Meade Willis’ web portal and creates all the necessary documents there in easy-to-use online forms. Everything that needs to be sent to or received from Walmart is done via Meade Willis’ website.
The second scenario applies to larger companies. When you are a larger company you may have an IT system or multiple systems in place. Systems such as an ERP (SAP, Epicor) or accounting system (Quick books) provide options to send or receive any documents directly from or to your tech-savvy business partners in an automated way. You can do it all by calling Meade Willis to assess your needs and implement the magic of generating and displaying documents in whatever format your native system uses. You can also have many more options by requesting various business rules be applied to your company’s workflow, such as: setting up error notifications, all documents to be displayed in a certain format, etc. Meade Willis also provides an XRP EDI web portal where you can see all the business analytics, statuses of your documents within the workflow and generate reports, as well as play around with specific charts (Business Intelligence) and manually create documents.
Now, I can talk about EDI benefits all day and night but the most important thing to remember is that it saves you time and money. What else can be more important than that? It stands to reason that if you automate your time-consuming manual processes and rely on technology – it will save your employees precious time and allow them to concentrate on your core business. Since time is money, think of it as every hour you are paying your staff to create manual, error-prone documents and then work on the all issues that arise from that (dispute resolution, etc.).
EDI can appear quite complex, technical and let’s face it – dry for some. Since in most cases the decision to switch to EDI is mostly taken by not so technical people – we, at Meade Willis, make sure to speak your language. And for those of you who are interested in more EDI business cases, I will be writing a follow-up article about some of the best ones from Meade Willis’ history.