A Guide to the Benefits of Outsourced EDI

A Guide to the Benefits of Outsourced EDI

Table of Contents

Introduction

Section 1 –Understanding current EDI capabilities

Using in-house systems
The expert in your business leaves
Operating systems no longer supported
Knowing when a message fails

Section 2 – Reacting to Business Changes

Upgrading ERP Systems
On-boarding New Buyers
Trading Partner Changes

Section 3 –Focusing on the EDI Solution

Multiple Cost Savings
Better Trading Relationships
Business Intelligence
Expertise and Innovation

Section 4 – Finding an Outsourcing Partner

Introduction

This guide is designed to help companies who engage in B2B transactions via Electronic Data Interchange (EDI) improve efficiency, eliminate unwanted costs and grow their business.

It’s been produced with the benefit of almost 30 years’ experience in helping business successfully adopt EDI.

EDI transforms the way companies share invoices, sales orders, delivery confirmations and more. It vastly improves the speed and accuracy of transactions. On a daily basis, it reduces the cost and improves the flexibility of trade interactions.

It eliminates costs associated with purchase, printing, handling, processing, and delivery of paper documents. Aside from cost savings and increased efficiency, adopting EDI offers access to large-scale suppliers and buyers already connected via EDI networks.

Section 1 –Understanding current EDI capabilities

Using in-house systems

Many companies still rely on old hardware and operating systems that are installed on a standalone basis. Running your key accounts though an EDI system that isn’t fit for purpose is a business risk.

In-house EDI systems are expensive, some of the costs include;

Licensing or purchasing EDI software
The cost of software development teams
Mapping and interfacing with various customers
Extracting data from an internal ERP system
Paying for external ERP services to create mappings

In-house system runs the risk of hardware or security threats. If a virus creeps into an EDI system it can cause major disruption. Without robust anti-malware security procedures in place you risk having to reinstall, backup and reassert all trading relationships.

The expert in your business leaves

Legacy systems often run on a dedicated PC. That means key functions are not automated. Processing sales orders and sending out invoices means someone having to run them and ‘send’ the messages. If the person who set up the EDI system leaves, or isn’t in, manual processes are not easily understood. Don’t end up with an EDI system that nobody knows anything about.

Operating systems no longer supported

In-house EDI systems are often left running on their own accord and are not subject to regular internal checks. This creates many risk for a business.

If it doesn’t run on a modern operating system, yourDesktop EDI won’t have a long lifespan. As the technology evolves, older programs like Microsoft NT are no longer supported.

Legacy EDI systems and issues that arise from outdated kit and procedures can cost a business;

They can be difficult and time consuming to use
The cost of replacing hardware can be an unbudgeted expense
The cost of running the EDI system could be higher than alternatives
The costs of establishing new trading relationships can be prohibitive
There are unnecessary additional admin and support costs
There’s an opportunity cost of diverted staff from other areas of the business
Unsupported software means no new security updates

Knowing when a message fails

With a standalone system, will you be informed of issues in time?

Anything that disrupts the information flow between supplier and buyer has the potential to cost your business. Minor issues, like leaving out numbers for delivery dockets, purchase orders or invoices can cause messages to fail. System or network outages can also impact your EDI flow. Losing invoices and purchase orders will result in payment delays and failing customer expectations.

Section 2 –Reacting to Business Changes

Upgrading ERP Systems

Outgrowing your existing ERP systems can impact everything from warehousing to financial reporting. When your infrastructure is inadequate and outdated, the only option is an ERP upgrade.

Companies with lower level ERP systems could be taking orders from their customers and importing them manually. They must print orders, re-key them and import the data into their ERP system.

A software upgrade, or shift to a new platform requires reconfiguration of existing EDI integrations. It’s vital for business continuity to ensure that communication between customers and suppliers continues unhindered.

At this point, many companies realise that modernising their EDI is cost-effective because it reduces expensive manual processing which is an integral part of legacy EDI systems.

On-boarding New Buyers

When you start supplying a new buyer, you’ll frequently come across customers who require you to be EDI enabled to supply them. You must be compatible with their EDI systems, which can contain many different specifications. Dealing with set-up variations and testing requirements is complex. It means exporting data from your ERP system into a format that the customer’s system expects and understands.

The difficulty is that each buyer has a different order format that requires you to integrate individually with each one. Because EDI code is only readable by machines, your ERP consultant will have to map the data into a format that can be imported to your system. You may have to support multiple different interface file formats for each trading partner. Internally managed EDI systems or basic ERP packages are ill-equipped and can even require manual set-up.

The integration costs for each new trading relationship, including the time and resources required, are not scalable when you have to do a different mapping for every single customer. Each customer has different messaging and data requirements, ten buyers could have ten different specifications. It requires specialist knowledge and expertise to create the export template to extract data in the correct format for submission.

Trading Partner Changes

When a customer changes the EDI data mappings for import into their system, each of their trading partners must reconfigure their exports to match the new routines. All of this manual reconfiguration comes at a cost. Businesses must either retain the services of their own EDI expert, or hire an equally expensive consultant to make the changes.

Section 3–Focusing on the EDI Solution

When you rely on outdated legacy systems, it makes it harder to complete key supply chain processes.

If you can’t scale your current solution, you can’t;

Expand usage volume and functionality
Keep up to date with innovations
Grow in line with your customers’ expectations
Remove obstacles for their buyers
Save money and improve efficiency

With systems that aren’t fit for purpose, you become more difficult to do business with.

Multiple Cost Savings

There is another way to operate your EDI system. By partnering with an expert EDI provider you benefit from best practice, experienced management and the latest technology. Outsourcing makes business sense by reducing the cost, time and resources required to complete supply chain transactions. The costs of legacy EDI software are both direct and indirect. Outsourcing saves on them by reducing EDI software, hardware and network infrastructure, eliminating costly errors and freeing up resources. It’s a secure way to guarantee trading relationships, offering the ability to adapt to changing business needs and avoid customer on-boarding and set-up delays.

Save on direct and indirect costs:

Reduce EDI software costs
Free up Finance and IT resources for value-add activities
Eliminate pricing, order and invoicing errors
No need to purchase hardware or network infrastructure
No additional staffing or maintenance cost

Inefficient EDI ties up resources that could be deployed to better effect elsewhere

Better Trading Relationships

Outsourcing your EDI simplifies the process of responding to customer’s EDI demands. Transactions are completed in real-time enabling faster and better-informed decision-making. Better business relationships arise from faster and more efficient transactions, outsourcing is the secure way to guarantee trading relationships and limit the risk of delays, outages and security threats.

Information is exchanged in a matter of minutes instead of days or weeks. Processes are streamlined; time-consuming activities are eliminated. Human intervention is reduced leading to fewer errors such as document mishandling.

Business Intelligence

From the moment a document leaves your business system to when it is delivered to your trading partner, a managed service provides a full audit trail and comprehensive tracking. A managed service has the ability to link to multiple business applications e.g. Sales Order Systems, Manufacturing Systems, Logistic Systems, Purchasing Systems, for example. It can integrate seamlessly with existing and future business processes and systems including all ERP and back office applications.

Expertise and Innovation

Withan outsourced EDI solutions, configuration changes and data export tweaks become the responsibility of the outsourced service provider. The requirement for an in-house EDI specialist and dedicated hardware required to support an EDI system is removed. The service provider will have extensive experience in EDI business processes and expertise in delivering and implementing complex outsourcing projects – these can bring huge, and often unexpected, benefits to you.

The combination of an industry leading platform and expert staff vastly increase the efficiency of complex B2B trading activities. It also facilitate new business processes to keep up to date with innovation and continually improve performance. With access to expert support, outsourcing guarantees quick identification and resolution of any EDI support issue. Suppliers can focus on managing their business - not managing EDI.

The Benefits of Outsourcing EDI

Higher operational productivity
Lower administration costs
Increased Profits
Supported by EDI Experts who understand your business needs.
Increases responsiveness to customers
Captures useful transaction information for further analysis
Reduces administrative errors
Sustain a competitive advantage

Section 4 – Finding an Outsourcing Partner

Celtrino is a leading supplier of Supply Chain Management services. Each year our customers process millions of electronic documents through our platform. We’ve nearly 30 years’ experience in helping business successfully adopt EDI.

We used this experience to create a service designed to offer best practice for companies of all sizes. Partnering with Celtrino will provide a solution that grows with your business while leaving you to focus on managing that business.

The Celtrino EDI platform is fast, reliable and always available. Our solutions easily integrates with your choice of ERP or accounts package and supports all file types.

If your EDI system has reached the end of its lifecycle, then it’s time to consider moving to a new outsourced solution.

About Us

At Celtrino, we’re committed to making business easier and more profitable for our customers and their trading partners. Our pioneering Supply Chain Management network delivers innovation and expertise to transform the way you do business.

From the origins of electronic commerce to the growth of business automation and next generation technology, we’ve been at the centre of supply chain innovation for almost 30 years. That positions us to help companies, in diverse sectors, transact business across complex supply chains with total confidence.

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