EDI stands for "Electronic Data Interchange," a form of electronic transmission of business data that has been established for years. The basic idea of EDI is the direct transfer and processing of data, with no human interaction. For example, an order placed with a supplier is automatically recorded as an assignment in the corresponding IT system, thereby eliminating the usual steps of opening the file, transferring the contents manually, etc.
In addition to the immense savings in time and costs, there's a significant reduction of the risk of error during data entry, thanks to the omission of manual operations. Processes such as ordering and order processing take place quickly and smoothly, to the equal benefit of senders and recipients.
So what should you look out for when choosing an EDI solution?
Are all transmission protocols, data formats, EDI subsets supported? Previously common standards have been increasingly replaced by new protocols such as AS2 and OFTP2 in recent years. Larger companies in particular often urge their partners to switch to the new protocols and data formats, with most EDI solutions covering only a fraction of the standards.
If the sender and receiver use different data formats, the message must be converted in an intermediate step. This conversion of messages from one format to another is called mapping. If deviations occur during the mapping process, problems are inevitable. Most EDI solutions resemble a black box in which data are transferred back and forth, but the steps in between remain largely unclear. If orders do not arrive at the supplier, troubleshooting is often a tough and lengthy process.
Do I run the risk of incurring incalculable costs from a transaction-based pricing model, for example?
Many EDI providers base their pricing structure on the number or sizes of messages sent or received. Although this practice often sounds tempting to customers at first, it quickly turns out to be a cost trap. Often the volume of EDI data transfer will increase unexpectedly. For example, should a supplier which had received all the day's orders in bundled form demand separate notifications for each request, the costs will rapidly increase many times over.
My advice:
Companies looking for suitable EDI software should pay particular attention to the supported protocols. In the coming years, EDIFACT, OFTP2 and the AS protocols and formats (variants AS1 to AS4), among others, are likely to remain very common. It's not only the overarching formats that are important, but in particular the industry standards of the given sector. This is especially true for the industrial sector with its many special formats.
In terms of pricing structure, flat rate offers with constant costs are preferable to transaction-based models. If the costs are clearly defined in advance and remain constant during the contract period, EDI solutions are usually the most efficient and inexpensive way to exchange data on a larger scale.
Check out the EDI solution from Scheer PAS:
- All common data formats are on board as templates.
- Easy management and monitoring of all electronic communication ensures maximum transparency.
- The solution supports a wide variety of message formats, such as XML, CSV, SAP IDoc, X12, UN/EDIFACT formats or EDIFACT subsets, as well as industry-specific standards.
- All endpoints can be connected as long as the partner uses one of the message protocols listed below for data transmission:
- EDI data transmission: AS1, AS2, AS3, AS4, OFTP2, FTP, FTPS, SFTP, SMTP, SMTPS, RNIF 2.0
- Encryption methods: 3DES, DES, AESCBC128, AESCBC192, AESCBC256
- Signatures: SHA1, SHA256, MD5
Even the complex requirements for archiving incoming and outgoing messages, as well as the retrievability of archived messages, can be implemented. Numerous ready-made archiving functions, integrated mapping rules and the configuration of retention periods allow full flexibility when implementing your own archiving requirements. External archiving solutions can be integrated.
Finally, communication via EDI can be controlled and evaluated through convenient monitoring.
