As part of digital transformation initiatives in global trade, organizations are adopting cloud applications to automate and digitize their supply chain management. Electronic Data Interchange (EDI) is the holy grail for B2B communications and plays a critical role in supply chain modernization efforts. According to Forrester Research, the total number of global EDI transactions will exceed 20 billion per year. Also, 87% of organizations use EDI-based purchase orders and 84% use EDI-based invoicesfor their B2B transactions with their trading partners.
Speeding up the business cycle and accelerating the time taken for completing a business transaction end-to-end is critical for supply chain management and operational efficiency. For example, EDI 856 is one of the EDI documents that provides advance notice to a customer of a pending shipment of goods. EDI 856 alone can help organizations to cut down receiving times by up to 60%. Cost savings are another consideration. The UK grocery sector saves £650 million per year in costs by using EDI instead of manual, paper-based order processing, invoices, and dispatch advices. It’s clear EDI is here to stay!
Digitization of your supply chain is no longer optional. The business benefits that you stand to gain by digitizing your supply-chain management are profound. In fact, 60% of organizations plan to increase their investments in supply chain digitization. Return on investment is also driving EDI adoption. Digitizing supply chain and procurement generate an 18% return on investment within 12 months. That’s an impressive ROI to achieve in a short time, and B2B EDI software applications play a major role in delivering these results.
Organizations that use legacy on-premises systems to drive their supply chain business processes can’t meet the needs of the current connected trade ecosystem that functions in real time. Cloud B2B EDI solutions are essential for modernizing legacy on-premises B2B EDI systems and for digitizing supply chains end-to-end.
Here are some key challenges faced by organizations that manage their trading partners, suppliers and customers with legacy on-premises B2B EDI solutions.
Legacy B2B EDI solutions are complex and just don’t meet the requirements of the modern trading ecosystem. It’s time for organizations to modernize by adopting cloud B2B EDI solution. But how do organizations go about choosing the best cloud B2B EDI solution and what should they be looking for from a cloud B2B EDI vendor? Here are 9 critical things that you should consider before choosing a cloud-based B2B EDI solution.
The first thing to consider is to see if the solution has multi-EDI support for any EDI standard or format. Ensure that the solution supports X12 and EDIFACT with automatic message validation and processing to simplify and expedite the handling of complex EDI messages. Also ensure that the cloud B2B EDI application can support non-EDI based formats, such as XML, PDF, Excel, JSON, CSV, Txt, etc.
2. Ease of Integration with Enterprise Systems
Look for a solution that seamlessly integrates with your enterprise application stack, including ERP systems, CRM, billing, procurement, and other business cloud applications. Integration capability is one of the most critical factors when choosing your cloud-based B2B EDI solution. Also, ensure that the cloud B2B EDI solution can integrate with third-party systems such as B2B eCommerce platforms in a secured manner.
Your cloud-based B2B EDI solution should offer prebuilt EDI mappings and custom business logic flow building capabilities. Ensure that the solution has comprehensive order-to-cash and procure-to-pay processes with prebuilt and preconfigured out-of-the-box mappings for EDI X12, EDIFACT, and other messages. Such prebuilt mappings simplify and expedite the handling of trading partner messages and acknowledgments.
Look for a B2B EDI solution with a custom business logic flow builder for processing messages to your specific back-end system or to extract messages from your back-end system.Such capabilities help organizations design robust mapping and meet specific business requirements or use cases.
Choose a cloud B2B EDI solution that offers comprehensive end-to-end tracking and monitoring of the entire B2B EDI communication process. This will give you full control of the data exchange with your partners and will also allow organizations to address partner queries quickly.
Look for solutions that provide real-time visibility of key data points, errors, or other events. Also look for solutions that offer intuitive dashboards that provide a detailed view into EDI messages and acknowledgments exchanged with partners. Event drill down is also a critical capability that provides full error handling and error reporting.
With a growing partners ecosystem, you need to be able to quickly add and mange partners. Ensure that your cloud B2B EDI solution has simple-self-service capabilities and pre-defined EDI message processing capabilities, both of which will considerably cut down your partner onboarding time.
Ensure that your cloud-based B2B EDI solution has the capability to empower business partners to track file exchange and send/receive files to or from your organization in real time.
Also, since organizations have different partners of different sizes and skill sets, ensure that your cloud B2B EDI solution supports them all and provides prompt visibility into processing status. Look for solutions that can provide partners access to dashboards and real-time tracking of files exchanged. Also, for partners who have limited IT capabilities, ensure that your cloud B2B EDI solution has a provision for them to exchange files in an efficient and secured way. Such collaboration between organizations and partners will improve communication with your partners and ensure prompt error handling.
AI and machine learning (ML) capabilities accelerate the handling of non-EDI files with automatic file structure discovery, parsing, and data transformation.
AI and ML capabilities can identify complex data structures and modify data models based on semantics. This can help organizations to automatically decipher and create new data models to expedite and simplify the partner onboarding process.
Lastly, consider security for data exchange and file transfer. Look for a solution that provides the means to transfer files using different communication protocols with highly secured, integrated file transfer capabilities. Ensure that the cloud B2B EDI solution supports advanced file transfer protocols such as SFTP/FTP/FTPS, AS2, and HTTPS to handle file exchange with your partners.
Adopting a cloud B2B EDI solution has several benefits. Cloud B2B EDI solutions enable organizations to eliminate manual processes, minimize transaction errors, save costs, integrate with business applications seamlessly, onboard and collaborate with trading partners quickly, and exchange data in a secured real-time manner when compared to legacy EDI solutions. Drive digital transformation into your supply chains by modernizing your legacy EDI solution with a cloud B2B EDI solution today!