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EDI Raises the Game in B2B Commerce

By
Ryan Tierney
October 20, 2020
Cards flipped up showing an Ace and a Jack.

In today’s warp-speed world of B2B commerce, there’s simply no time for outdated, manual processes. Relying on “old-school” systems that funnel transactions through email communications, fax exchanges, or even physical mail generates extra work, not just for your company, but for the companies that buy from you. That makes it much more difficult to do business in all the directions we need to nowadays. 

Legacy systems also have their limitations when used for order processing and tracking. On the one hand, they prevent your team from working as efficiently as they could (which means less-than-optimal revenue). At the same time, they introduce an opportunity cost: You risk losing business partners to companies that can provide a more streamlined ordering and invoicing experience. The result? A double blow to your bottom line. 

That’s where Electronic Data Interchange (EDI) comes in. EDI acts as a bridge to connect your communication channels, making it easier to exchange the mission-critical documents you and your customers use every day. It allows your systems to digitally receive documents from your customer’s systems so you can view exchange orders, invoices, and other documents in the format you need to see them in without having to re-key information into or from your accounting system. 

Today, EDI has evolved to the point that it can dramatically streamline all aspects of your supply chain, making you a more attractive retail partner. In 2019 alone, EDI accounted for more than 78% of B2B electronic sales, making it the most popular method for B2B transactions. So, why is EDI so popular, and how can your business take advantage? Here are just a few reasons why using EDI is one of the wisest decisions your business can make. 

Fast, Compliant Customer Communications

One of the most important benefits of EDI is that it makes all your interactions with other businesses low-effort and stress-free. Most major retailers employ their own EDI systems to streamline ordering and replenishment. Using EDI on the supplier side enables your business to easily comply with customer format and data requirements. Additionally, EDI automation enables rapid response to customer orders and queries, making it easier for them to assess order statuses, prepare for deliveries, and make necessary changes.  

Old-school processes can cause many speed bumps along a transactional path, which means more human error and communication bottlenecks. By making document transference simple, instant, and error-free, EDI reduces customer frustration and improves operational efficiency on both ends of the equation. 

Some retailers, like Walmart and Target, even require EDI as a prerequisite to trading with them. These customers have complex EDI format requirements which are constantly evolving. The best EDI solutions include support for EDI compliance by monitoring and updating trading partner maps automatically. By staying compliant, you can provide customers with exactly the data they need to manage each order smoothly.  

Digital communication has never been more important in the world of B2B commerce. Even before the supply chain disruptions created by COVID-19, 69% of retail procurement managers cited ease of execution as a top priority in the sourcing process. Providing them with seamless communications gives your company an edge over competitors who have not yet recognized the benefits of EDI and adopted fully automated systems. Put simply, EDI makes it that much easier for companies to choose to do business with you.

Accurate Shipments and Fewer Returns

Because EDI eliminates the need for rekeying information, it automatically reduces errors that can erode your reputation as a supplier. The more data-entry steps there are in a process, the more human error inevitably creeps in. EDI closes those little windows of opportunity for inaccuracies. 

This is one of the benefits of adopting EDI that your customers will notice first. Fewer errors mean fewer incorrect orders and less time fixing them. Both your customers and your staff could do without the stress and wasted time of returns, exchanges, and the reconciling that comes with those activities. You will no doubt also see an improvement in your vendor scorecard if your business can produce highly accurate shipments, which makes you a much more attractive trading partner. 

Order Volume Flexibility

The operational efficiency that electronic data interchange can unleash for your business creates exciting scaling opportunities. Because the administration of purchase orders and invoices is highly streamlined with EDI, it is possible for your existing staff to scale orders when they need to without sacrificing your company’s reputation as a fast and reliable partner. With EDI in place, even a scenario like the one we saw at the beginning of the COVID-19 pandemic, when there was a meteoric surge in orders for particular products like sanitizer and surgical masks, would be manageable. EDI enables you to move more product at peak periods and serve customers’ needs while honoring their deadlines. 

By limiting human error, EDI also greatly reduces the cost in time and money associated with handling issues that would normally arise when business volume surges. Taking proactive steps to reduce customer pain points like incorrect orders, delays, and returns gives staff more time to focus on positive, relationship-building conversations with customers, making it one of EDI’s most valuable upsides. It gives them room to build more and better business connections. 

Another benefit of EDI when it comes to increased order volume is that it makes tracking inventory movement and providing order statuses much easier. Giving staff complete visibility throughout the supply chain enables them to provide customers with more accurate availability and dates of replenishment. Armed with that information, your staff can set the right expectations and meet them every time. 

Cutting-Edge Capabilities

No matter what business you are in, speed, agility, and scalability are probably important to you. Business technology is evolving almost as fast as it can be dreamed up, and you don’t want to risk being left behind because you are still relying on emails, phone calls, and PDFs for transactions. As your competitors know, those are going the way of the dinosaur. 

The most advanced EDI solutions are constantly updated to keep in step with evolving technology and embrace cloud computing. Unlike on-premises servers, the cloud gives your company infinite scalability in an adaptable environment. Using cloud-based EDI also gives you the ability to harness the analytical power of big data to keep up with the constantly shifting demands of B2B commerce. A high-performing, integrated EDI solution will use the power of the cloud in smart, secure, and compliant ways. 

The beauty of cloud EDI is that it enables you to manage order processes with just a web browser, no matter where you are in the world. Its analytics give you a 360-degree view of the supply chain so you can pivot as you need to in order to do better business—in every direction. 

Explore the Benefits of EDI Today 

EDI has quickly become more than just a way to add new layers of efficiency to your operations. At the speed B2B commerce is moving and evolving these days, having a web-based EDI solution will soon be considered mere table stakes. Your trading partners will simply require it. The time to adopt EDI, if you haven’t already, is now—because if you want to up the ante for your business, you’ll have to earn an invitation to the table in the first place. That’s just how the game works.  

If you are interested in learning more about the benefits of EDI, fill out our contact form. One of our specialists will reach out to you to uncover your business needs and investigate how EDI can give you the best return on your investment. 

About the Author: Ryan Tierney is the VP, Product Management focused on Integrations at TrueCommerce. He has spent the last 16 years with TrueCommerce in various roles with services and Product Management. He and his team are responsible for the TrueCommerce TC.Net platform, Business System and Channel Integrations as well as Trading Partner Mapping.  Ryan enjoys spending time with his wife and 3 sons and in his spare time enjoys golfing. 

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