Everything You Need to Know About Managed EDI Services

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.

What Is Managed EDI?

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.

The Inner Workings of Managed EDI

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.

1.    EDI Mapping and Translation

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.

2.    Data Validation and Error Handling

Managed EDI services typically use robust data validation and error handling to catch and address issues before they can cause problems. This often includes:

• Automated validation checks to verify that documents meet specified criteria
• Real-time error notifications to alert relevant parties of issues
• Structured workflows for addressing and resolving data discrepancies

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.

3.    Continuous Monitoring and Proactive Issue Resolution

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.

The Benefits of Managed EDI

With that short definition out of the way, let’s take a closer look at the benefits of managed EDI:

1.    Streamlined Data Exchange and Improved Efficiency

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:

• Faster transaction processing times
• A significant reduction in manual data entry errors
• 24/7 operational capability
• Improved accuracy in order fulfillment and inventory management

These efficiency gains translate into smoother supply chain operations and improved relationships with trading partners.

2.    Cost Savings

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:

1. Converting large capital expenditure into manageable operational expenses
2. Eliminating the need for expensive in-house EDI infrastructure
3. Reducing costs associated with hiring and training specialized EDI staff
4. Offering predictable, often subscription-based pricing models for easier budgeting

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.

3.    Enhanced Data Security and Compliance

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:

• Advanced encryption protocols to protect sensitive business data during transmission
• Regular security audits to identify and address potential vulnerabilities
• Up-to-date knowledge of industry-specific regulations and standards
• Assistance in maintaining compliance with a complex and evolving regulatory landscape

These security measures often exceed what many businesses could implement independently, providing peace of mind to companies and their trading partners alike.

Comparing Managed and Self-Service EDI Software

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: Control and Customization

Self-service EDI allows businesses to retain full control over their EDI processes, which is ideal for organizations with:

• Unique Requirements: Companies with complex configuration needs may benefit from self-service EDI solutions, which allow them to create highly bespoke configurations.
• In-House Expertise: If your business has a robust IT department, you can utilize your internal skills to manage and optimize EDI systems.
• Data Oversight: Maintaining EDI in-house helps ensure direct data security and privacy control.

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.

Managed EDI Services: Efficiency and Expertise for Complex Needs

For businesses without a mature IT team or those dealing with high volumes of complex B2B transactions, managed EDI offers several advantages:

• Handling Complex Transactions: Outsourcing EDI can enhance efficiency and reduce errors, especially for businesses with intricate supply chains.
• Ease of Integration: Managed services facilitate seamless integration with the complex systems of larger partners, eliminating hefty upfront investments.
• Expertise on Demand: With managed EDI, businesses have access to a team of experts who can quickly adapt to new standards and protocols, speeding up business cycles and partner onboarding.
• Scalability: Managed EDI services are designed to scale effortlessly with business growth, managing increased transaction volumes without stress and strain.
• Focus on Core Business: Outsourcing EDI allows companies to concentrate on their primary operations while leaving the nuances of EDI compliance, scaling, and maintenance to the experts.

Making the Right Choice

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.

Choosing the Right Managed EDI Solution

Selecting the right managed EDI provider is fundamental to maximizing the benefits of this service. Consider these key factors:

1. Industry Expertise: Look for providers with experience in your sector. Epicor has decades of experience in the make, move, and sell economy.
2. Technology Stack: Determine if the provider's technology aligns with your needs and future plans.
3. Support and Service Levels: Evaluate the level and availability of customer support.
4. Scalability: Consider your future growth and whether the provider can accommodate your requirements now and in the future.
5. Integration Capabilities: Check that the service can integrate with your existing systems so you don’t have to rip and replace anything that’s working.

Embracing the Future of B2B Communication With Managed EDI

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.