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5 Questions to Ask Yourself Before You Integrate Your EDI

Topics: EDI basics, EDI considerations
Picture appears courtesy of Martin Pettitt.

At some point, as you continue to sell your product and add trading partners to your existing EDI solution, you may start thinking about integration. There are several reasons why you SHOULD be thinking about this, the first being the amount of data entry you are doing, you also may be thinking of implementing a new order processing system and think the timing is right, or you might be wondering if your per-transaction cost is getting out of control. Regardless of the whys, there are five important questions to ask yourself before you look at integration.

Are you processing more than 20 transactions per day?

This is the magic number that I give to most customers.  Now, this is not written in stone. It may be that you are seasonal, but you have huge orders 3 months out of the year. In that case, integration may still be a good idea for you. That being said, if you ARE processing more than 20 transactions per day, you really need to look at integration.

Do you have an EDI-friendly order processing system?

There are some accounting systems that are simply not EDI friendly – think “comes in a box and can be purchased at Costco.” That’s not to say that it’s impossible, BUT these systems do not have the level of detail necessary for complicated documents like the EDI 856. Also, you are very limited to the few EDI providers that CAN work with these systems or even that have partnerships with these accounting companies.  You are better off buying an ERP package that can work with any (or most) EDI translation tools such as Liaison’s Delta/ECS which allows the ERP people do what they do best, and the EDI people do what they do best.  A couple that comes to mind suitable for the SMB includes SAP Business One and Microsoft Dynamics.

Have you thought realistically about your budget?

I have many customers come to me to ask about integration and they are often shocked by the price tag. Luckily, we have some creative options for those who need a middle ground budget-wise. That said, it’s not wise to go into it thinking you are only going to spend $5,000 and set up 3-5 trading partners. Integration is not cheap and for good reason.  Have you ever seen that show, “Catch a Contractor?” I hear Adam Corolla repeatedly say, “If it sounds too good to be true, then it probably is.” You cannot remodel a kitchen for $1,500 and you cannot get a well-constructed integrated EDI solution for $5,000.

Are your trading relationships stable?

This should go without saying but it wouldn’t be wise to spend $20,000 on an on-premise EDI solution unless you have well-established trading relationships and a steady flow of orders. If 80% of your business comes from Amazon and you’re on shaky ground there, don’t make any big moves until you either tighten that relationship or go after new customers and foster those relationships. I have seen companies jump the gun and then lose that big contract – leading to band-aids and temporary fixes. It can become an extremely stressful situation.

Do you have technical staff?

One of the first questions I ask software prospects is if they have technical staff. The proposal will depend on whether or not we will be managing the software for the customer or if we will provide training and the customer will manage the software on their own. This question ties into the budget question as the budget will need to be higher if we are managing the software. There is middle ground – in many cases the customer does have some technical staff but relies on us heavily for support. In any case, you will need to decide how much, if any, technical support you will need.

If you ARE at the point that you need to decide if integration is in your near future, hopefully, these questions will get you thinking realistically. You need to look at your resources, where your business is headed, and what your business goals are. Having your EDI integrated can help to increase your bottom line with shorter order-to-cash cycles and really can help streamline your entire business process.  Today’s EDI tools are not just for EDI anymore.

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