The TrueCommerce EDI Buyer’s Guide

Considering EDI? We’re Here to Help!

As supply chains become more complex, EDI offers the technology you need to connect your systems, trading partners, demand channels and customers. Finding the right provider, however, is essential to scaling your business and achieving your goals. In this guide, we’ll cover what you need to know about EDI, how different EDI offerings work, and what to look for in an EDI service provider. There are also links to additional educational resources, and a printable checklist you can use when evaluating different EDI vendors!

What is EDI?

EDI is an acronym for Electronic Data Interchange, which is a standard protocol that allows disparate business systems & revenue channels to communicate end-to-end, automatically. Essentially, EDI creates a bridge between your internal systems, your partners’ systems, and a variety of sales platforms, such as online marketplaces or eCommerce storefronts. By automating the transfer of data between these systems, EDI can quickly process large order volumes, eliminate errors and delays, and streamline communications across your supply and demand channels.

Who Needs EDI?

EDI has been around since the 1980s, but as the push for digital and agile supply chains increases, EDI has become an integral part of the business landscape. In 2019 alone, EDI transactions accounted for nearly 80% of all B2B electronic sales.

Some businesses need to use EDI because it’s required by major retailers like Walmart and Target. Others choose to use EDI to accelerate their order processing and scale their business operations. EDI is used by both B2B and B2C businesses, including manufacturers, suppliers, distributors, wholesalers, retailers and others.

Wondering if EDI is right for your business?

If any of the conditions below apply to you, you’re in the right place:

  • My product just got picked up by a major retailer who requires EDI
  • Time-consuming manual processes are stopping my business from growing
  • I’m frustrated by having to retype every order from one system into another
  • I need to be able to manage my orders remotely
  • I’m overwhelmed by emails, PDFs and faxes
  • I want to make my business more efficient and productive

Type of EDI Solutions

This list touches on several popular EDI software and solution options.
However, many vendors offer a combination of approaches to better serve their customers.

EDI Networks

Multienterprise Commerce Networks

These commerce networks emerged most recently, in the last decade. They provide a modern, unified approach to support omnichannel and the growing need of enterprises to connect with many supply and demand channels, including EDI, eCommerce, online marketplaces, suppliers, retailers and more.

Single Channel Networks

This type of network generally supports EDI only, with few exceptions, and provides all the components required for EDI, such as mapping, translation, and connectivity to trading partners. As companies expand to sell via multiple channels, such as digital commerce marketplaces and drop ship programs, they may find that single-channel networks restrict their omnichannel growth.

Value Added Network

VANs are a more traditional connectivity method through which a business sends transactions between multiple trading partners. VANs use a virtual mailbox to manage incoming documents, which must be manually checked and processed by the receiving party. These networks are becoming less popular as new connectivity methods are adopted by trading partners, such as AS2, AS3, FTP, SFTP and others.

EDI Systems

EDI in the Cloud (Web EDI)

Web-based EDI uses the cloud instead of physical on-premises servers. In addition to reducing IT needs and hardware and software costs, web-based EDI lets users manage their EDI from anywhere with wi-fi. Because the software is continually updated and backed up in the cloud, there’s also no need for costly new software installations.

End-to-End Integrated EDI

This type of EDI solution enables streamlined communications between trading partners by eliminating the need for multi-vendor solutions. End-to-End EDI combines a value added network with trading partner maps and an EDI system that directly connects to demand channels and business systems such as ERPs.

On-Premises EDI

On-Premises solutions use physical, on-site servers to deploy EDI software, offering businesses complete control over their solution, including security and data access. Business can choose to house their servers on-location, or use a “hosted” solution, where the servers reside in a third-party data center. Businesses choosing to maintain their own servers will need to invest heavily in IT, while those using a third party may split maintenance and security responsibilities

On-premises EDI is generally deployed by companies with significantly high transaction volumes, up to millions per month, which justifies investment in internal IT and mapping resources instead of outsourcing EDI needs. However, this option is becoming less popular as alternative fully managed service EDI solutions are offered.

Benefits of Integrated EDI

1. Eliminate Manual Effort and Errors

Integrated EDI facilitates the translation and transmission of order data, so you don’t have to waste time with retyping. In addition to accelerating order processing and fulfillment, integrated EDI also speeds invoice and payments processes, so you can quickly recognize revenue.

2. Reduce Lead Times and Inventory Levels

EDI allows you to send and receive documents in a fraction of the time, which can drastically reduce delivery turnaround times. Plus, EDI documents like Advance Shipping Notices help you stay informed of incoming deliveries, so you can get ahead of stock shortages.

3. Improve Supplier Relationships

No more lengthy phone calls or back-and-forth emails. EDI provides automated, accurate trading partner communications to ensure the right shipments get to the right locations, on time, all while reducing chargebacks.

4. Cut Costs

EDI enables your business to scale while simultaneously reducing overhead, personnel requirements and time spent managing orders. With electronic document processing, you won’t need to spend on paper, document storage, or postage.

5. Position Yourself for Success

Hundreds of top retailers and e-tailers require EDI documents from their vendors. By using automated, compliant EDI, you’ll be able to offer better service at lower prices, making you more attractive to new trading partners.