EDI Service Providers
Business efficiencies, cost reduction and increased productivity are among the key reasons that we start to trade electronically. Yet many companies find themselves achieving precisely the opposite when they do business electronically with their customers. By employing a number of different EDI service providers, you may think you are responding effectively to your customer mandates. But are you?
It’s easy to view multiple EDI systems as simply a ‘cost of doing business’. You want to be able to comply with customer requirements, and if this means implementing a new EDI solution, as long as the contract value makes it worthwhile, so be it. But, as customer requests become increasingly specific, compliance can become a costly logistical and administrative nightmare.
Each time you deploy another EDI service, you are buying into more than just a new provider. You are introducing another electronic business process, potentially with different document types, technology standards and communications protocols. This means another solution for your company to learn and then manage and support. It also means another contract with the new service provider with different pricing structures and service levels and another B2B service provider to manage. All of this is so that your company can be viewed by your customer as providing good customer service.
Ironically, if you adopt a multi-service provider strategy for your EDI platform and systems, customer service is likely to be one of the things you simply can’t guarantee. Multiple systems mean multiple points of failure with multiple people. Having multiple Service Providers prevents you from negotiating a price based on the total volume of transactions and thus get the best price for the services you receive.
Also, connecting to new business partners is far from straightforward. As your supply chain expands and becomes more global in nature, the implementation challenges grow in complexity. It is not just about onboarding new partners quickly; it is also local language systems and support, the technical capabilities of your partners, and the country-specific regulations you must comply with.
In some scenarios multiple connections may be required, creating an EDI model much like what we see above. Over time, and through mergers and acquisitions companies may acquire multiple EDI providers. Some companies also require a direct connection to their EDI system, creating multiple connections that are not organized. Companies can have a couple of options to rectify this. They can consolidate to a single VAN (value added network) provider that maintains all of their connections, they may consolidate to a VAN that outsources their direct connections, or outsource everything to a managed service.
Streamlining supply chain processes is a key goal of most businesses to drive productivity and business effectiveness – leading directly to better customer service. If you have a number of EDI providers, it is extremely difficult, if not impossible, to achieve the end-to-end supply chain visibility required. The old maxim that ‘ you can’t manage what you can’t measure’ has never been so true.
Instead, think of a different approach – there may be no need to add another EDI service or B2B portal when a new customer requires it. If you are working with one of the leading B2B/EDIproviders, there is every chance that one of the B2B solutions that you are already using can meet all of your customer requirements – quickly and cost-effectively. Such providers already have the technical capabilities, existing business partner community and global reach you need. You can simply exploit existing functionality rather than re-invent the wheel each time.
Furthermore, you can benefit from two types of economy of scale. You can negotiate a price based on the total amount of EDI transactions your business conducts. Secondly, you have access to services whose costs are spread across a large customer-base, lowering the price point.
If you establish a highly effective, flexible B2B/EDI infrastructure from the outset, it gives you a foundation for successful electronic trading today and in the future. Working with a global B2B/EDI services provider like OpenText, you gain access to a highly resilient network of over 600,00 business partners in every part of the globe. You have local language solutions, local in-country support and a range of value-added services to deliver complete supply chain visibility.
It has to be well worth the greatly reduced levels of investment you’ll be making in a EDI and B2B integration strategy that actually will deliver excellent customer service.
7 Benefits of Selecting One EDI Provider
1. Reduce your costs
Using one EDI provider will reduce your communications and administration costs compared with supporting multiple providers.
2. Pay for what you use
A single provider will provide a price for your total transaction volume on a subscription or ‘pay as you go’ model. Voted one of the world’s leading cloud service providers, OpenText ensures you pay only for the amount of service you use.
3. Extend your network
It is much easier to add a new customer because your process is similar in each instance. You are effectively shielded from the EDI standards and technologies as this becomes the provider’s responsibility.
4. Improve your management
Managing a single EDI Services Provider is significantly easier and more effective. You have a single contract for your EDI service, the same service levels across your business and a single point of contact for service and support.
5. Increase your automation
Ironically, using multiple B2B/EDI systems means that many companies may still end up keying in content from business documents manually because they don’t have integration between all systems. Remember, this is the one thing that EDI was meant to remove! A single B2B/EDI provider allows you to readily automate key processes through seamless integration with your ERP and other back-end systems.
6. Extend your capabilities
A major weakness of the multi-Service Provider approach is that you have no visibility across your entire B2B/EDI operations. An unwanted result of this is your EDI providers can’t effectively deliver the value-added services that can drive business productivity and customer satisfaction.
7. Future-proof your investment
Of course, your chosen EDI providers should invest in the underlying technologies to enable future service capability. However, small companies can’t match the capabilities and resources of the large global B2B/EDI players who use technology as competitive advantage and can deliver new services and technologies to market competitively.