When considering the implementation and management of Electronic Data Interchange (EDI) systems, organizations often face the decision between completing setup and maintenance processes internally, outsourcing EDI support, or relying on managed service resources.
This article will explore the key benefits and drawbacks of each option, empowering companies to make more informed decisions about their EDI strategy and maximize their ongoing technology investment.
How Does EDI Outsourcing Work?
As cloud-based EDI solutions have become more prevalent in recent years, outsourcing EDI to a third party requires companies to sync with hundreds, even thousands, of other company’s business processes and rules.
Trading partners have different business rules and requirements for EDI documentation, testing, connection, and other maintenance processes. Modern business operations typically do not allow the time or resources to build and maintain the expertise required to manage trading partner requirements and processes in-house.
EDI outsourcing works by partnering with a third-party service provider to manage a company’s electronic data interchange (EDI) operations. The outsourcing provider typically offers a cloud-based platform that facilitates the secure exchange of documents like purchase orders, invoices, and shipping notices.
By leveraging the expertise of the EDI service provider to outsource EDI operations, companies can reduce the burden on internal IT resources, ensure accurate and timely data exchange, and quickly adapt to changes in trading partner requirements.
Managed Services vs. Full Service
Understanding the difference between managed services and full-service EDI support is crucial for businesses deciding how to handle their electronic data interchange needs. While both options provide external assistance, they differ in the level of involvement, flexibility, and control offered to the client.
Here’s a closer look at the key differences between each kind of EDI provider:
Managed EDI Service Providers
Managed EDI services offer cloud-based solutions where the provider develops and maintains the technology while the client’s internal teams handle all other customization, optimization, and operational tasks. Here are a few key things to consider about managed EDI services:
- In-house responsibility for operational and technical details of EDI solutions
- Coordination with trading partners to validate data flow and conduct EDI testing
- Internal updates whenever trading partners change their requirements
- Communication between trading partners about setup, connectivity, updates, and support
- Reliance on support for any EDI-related issues or concerns
- Internal monitoring and optimization of EDI transactions and maintenance initiatives
Full-Service EDI Providers
Full-service EDI offers cloud-based solutions and related staff that execute complete EDI management, including maintenance, customization, optimization, and operational tasks, for the customer. Here’s a closer look at the key capabilities of full-service EDI operations:
- End-to-end EDI testing to ensure successful data flow with trading partners
- Expert guidance to handle ongoing EDI management and maintenance initiatives
- Direct communication with trading partners to improve setup, connectivity, updates, and support (See which of your retail trading partners are supported here: https://www.spscommerce.com/network/find-a-partner)
- System optimization and continuous monitoring to minimize data entry and prevent errors
- Automatic updates when partner requirements change
- 24/7 support from trading partners, sales channels, systems, and EDI experts
Key Benefits
- Track, store, and update all EDI documents, document fields, and trading partner deadlines
- Access workflows that outline the documents and order of documents for each purchase order
- Manage all EDI-related tasks to ensure compliance with current and future EDI requirements
- Make changes to EDI maps based on updates to rule books and other specifications
- Offer round-the-clock support to ensure data exchanges are always secure, timely, and efficient
- Leverage a library of trading partner maps, workflows, and other industry knowledge to extend the value of existing systems
- Bring specialized knowledge to ensure compliance with industry regulations and minimize errors
- Scale EDI capabilities up or down based on demand without investing in additional infrastructure
- Manage any issues or risks associated with the implementation process without requiring internal resources
Key Drawbacks
- Could create a dependency, making it challenging to switch vendors or manage EDI in-house later
- Could reduce the ability to control and oversee processes, leading to potential delays or communication gaps
- Could bring complexity related to integrating outsourced EDI services with existing internal systems, potentially requiring additional time and resources
- Could accumulate ongoing service fees and potential hidden costs over time
- Could raise concerns about data security and privacy in sharing sensitive data with an external provider, especially if the provider lacks robust security measures
Understanding the Role of In-House EDI Support
By keeping EDI operations within the company, businesses retain complete control over their data flow, allowing for more tailored and responsive management. This approach ensures the EDI system is closely aligned with the organization’s needs and can quickly adapt to changing business requirements.
Additionally, an in-house EDI system fosters better collaboration between IT and other departments, facilitating smoother integration with internal systems. However, it also requires a dedicated team with specialized knowledge, which can be resource-intensive but provides greater oversight and customization opportunities.
“We moved our EDI operations to SPS Commerce and began using the SPS Fulfillment solution with a JD Edwards system connection. They provide the services we need and we never worry when a customer makes a request. It’s taken care of by SPS.” – Naomi Dwyer, VP of IT, Rapala USA
Key Benefits
- Ensure full control over core EDI processes, allowing for tailored solutions that closely align with business needs and adapt to changing requirements over time
- Quickly address issues, make updates, or adapt to changes without relying on external vendors or risking delays in initial timelines
- Keep sensitive data within the organization to reduce the risk of exposure associated with third-party involvement or management
- Seamlessly integrate EDI software with other internal systems for improved efficiency
- Foster better communication and alignment with business objectives by connecting the internal EDI team with other relevant departments
Key Drawbacks
- In-house EDI solution setup and maintenance requires significant investment in technology, infrastructure, and skilled personnel
- In-house teams may lack the specialized knowledge and experience that third-party providers offer, potentially leading to inefficiencies or errors
- Managing EDI in-house demands continuous attention, including regular updates, monitoring, and troubleshooting, which can strain internal resources and potentially result in staff burnout
- In-house EDI systems may be more vulnerable to downtime and disruptions with robust backup and disaster recovery systems that outsourcing providers have
- Scaling an in-house EDI platform can be complex and costly as business needs change over time, requiring additional resources and infrastructure
Where Does Surety Systems Fit in the Picture?
Our team at Surety Systems understands that sometimes you face a surge in EDI work that requires additional support to ensure your EDI processes continue running as expected and EDI connections are maintained properly.
Whether this additional workload is associated with new EDI requirements and connections or related to the loss of an in-house EDI expert, we provide additional consulting support to ensure you never skip a beat.
With our expert EDI consultants, you maintain full control over your existing EDI format, requirements, and processes, but you have an extra hand to help you stay afloat. Experts in technology, communication, and leadership are driven to provide the best technical support and produce the best outcomes for our clients, which is the name of the game at Surety.
Getting Started with EDI Support
From navigating critical collaboration efforts with an existing EDI outsourcing provider to leading the transition to or from in-house EDI management, managing core business processes associated with EDI data, or anything in between, our expert team is here to help.
Want to learn more about how one of our EDI consultants helped a large manufacturing client through multiple EDI projects? Take a look at this case study!
Contact Us
Whether you want to learn more about our project success, how to find EDI consulting help, or where Surety can fill the gaps in your organization, contact us today.
