EDI is a real technological workhorse, handling an impressive 78.4% of electronic B2B payments to the tune of $7 trillion annually.
However, as technology has advanced, so have the methods for implementing EDI.
One increasingly popular option is managed EDI, which involves outsourcing EDI management to a team of external specialists. This offers numerous benefits, including reduced costs, fewer errors, enhanced security, and faster transaction cycles.
In this blog post, we’ll examine managed EDI in more detail, explaining how it works and who can benefit from this cutting-edge solution.
Put simply, managed EDI is a service model where businesses outsource their EDI operations to specialized third-party providers.
This outsourcing includes the full spectrum of EDI activities, from the initial setup, integration with existing systems, and configuration to continuous maintenance, monitoring, and support.
You transfer the entire EDI workload onto an external team that lives and breathes the technology. You can rest easy knowing your transactions are in the safest hands.
Understanding how Managed EDI works can help you appreciate its value and make informed decisions about adopting the service.
Let's explore the key components of Managed EDI operations.
EDI mapping involves defining how data fields in your internal systems correspond to standard EDI data elements.
For example, a field in your system labeled "Ship To Address" might need to be mapped to a specific EDI segment and element in an outgoing purchase order.
Managed EDI providers have the expertise to create these mappings efficiently and accurately—it’s particularly time-intensive to handle in-house, and errors can be costly.
Managed EDI services typically use robust data validation and error handling to catch and address issues before they can cause problems. This often includes:
By catching and addressing errors early in the process, managed EDI services help prevent costly mistakes and delays—which could make the difference between a smooth transaction and a hefty fine for non-compliance.
One key advantage of managed EDI is constant oversight. This goes beyond simply processing transactions and involves actively monitoring the health and performance of your EDI system.
Real-time monitoring allows for immediate detection of failed or delayed transactions, enabling quick intervention.
Many managed EDI services also offer proactive alerts, identifying potential issues before they escalate into full-blown problems. For instance, if the system notices an unusual pattern in transaction volumes or an increase in error rates, it can generate an alert for investigation.
Regular performance reporting is typically part of a great managed EDI service. It provides insights into transaction volumes, error rates, processing times, and other key metrics.
With that short definition out of the way, let’s take a closer look at the benefits of managed EDI:
One of the primary advantages of managed EDI is the dramatic improvement in data exchange efficiency. With seasoned professionals overseeing your EDI operations, you can expect:
These efficiency gains translate into smoother supply chain operations and improved relationships with trading partners.
Implementing and maintaining an in-house EDI system can be costly, requiring upfront investment in hardware, software, and specialized personnel.
Maintaining legacy systems, including those supporting EDI, can cost 60 to 80% of a company’s IT budget. Outsourcing EDI helps negate these costs by:
The economies of scale achieved by EDI service providers mean they can offer sophisticated EDI capabilities at a fraction of the cost of in-house solutions.
This makes advanced EDI functionality accessible even to smaller businesses that might not have the resources for a full-fledged in-house EDI department.
According to the World Economic Forum, the global cost of cybercrime will jump to $23.84 trillion by 2027. In an era of increasing cyber threats and stringent data protection regulations, security and compliance are paramount concerns for any business engaging in EDI.
Managed EDI providers are well-equipped to address these concerns, offering:
These security measures often exceed what many businesses could implement independently, providing peace of mind to companies and their trading partners alike.
When implementing EDI, modern businesses face a crucial decision: managed or self-service EDI.
While some companies prefer the autonomy of self-service or in-house systems, others opt for the comprehensive support of managed services.
This choice is relevant for businesses of all sizes, with both large and small enterprises of varying transaction volumes increasingly selecting a managed model.
Let’s compare self-service to managed EDI:
Self-service EDI allows businesses to retain full control over their EDI processes, which is ideal for organizations with:
Self-service solutions don't necessarily require on-premises installations; many are available through cloud-based, web-enabled platforms. However, they still demand a dedicated IT team to manage and oversee the system.
For businesses without a mature IT team or those dealing with high volumes of complex B2B transactions, managed EDI offers several advantages:
Deciding between self-service and managed EDI depends on various factors, including business size, industry, transaction volume, IT capabilities, and growth plans.
While large, well-established companies with significant IT resources might prefer integrating EDI into their existing systems, the strategic benefits of managed services are compelling for many modern businesses.
Selecting the right managed EDI provider is fundamental to maximizing the benefits of this service. Consider these key factors:
Managed EDI Services offer a powerful solution to the challenges of modern B2B communication, providing expertise, efficiency, and peace of mind.
Whether you're struggling with an outdated in-house EDI system or looking to implement EDI for the first time, our managed EDI services at Epicor equip you with a state-of-the-art solution—no matter how many trading partners and transactions you’re dealing with.
