5 Common EDI Challenges and How to Overcome Them

Electronic data interchange (EDI) is essential to any supply chain management system. It allows companies to handle business transactions using a standardised electronic format with any trading partner, making once-onerous processes easier. However, there are significant EDI business challenges, particularly when expanding capabilities or during high-growth periods. Addressing these challenges effectively requires an understanding of how to leverage EDI’s benefits, regardless of the organisation’s size, sector, or technical capabilities. 

Whether the goal is to trade via EDI with one or more customers to meet their trading requirements or to implement EDI with suppliers to improve efficiencies, a fully managed EDI service can facilitate these objectives and mitigate common EDI challenges.  

Top 10 EDI Challenges You’re Likely to Experience

These challenges have multiplied as the supply chain has evolved to a point where vendors can sell an item they never owned, then arrange for it to be delivered by someone else to a home with a mailing address provided by a customer not yet listed in their database. With so many touchpoints and processes, businesses need to stay on top of their systems and address these top EDI challenges. 

1. Underestimating Supply Chain Complexity

Underestimating the complexity of supply chains and selecting the incorrect type of Electronic Data Interchange (EDI) can lead to significant operational disruptions within your business. Supply chains involve numerous stakeholders has their unique requirements and processes. Failing to account for this complexity can result in the adoption of an EDI solution that does not meet the specific needs of all parties involved. This mismatch can impact the overall performance and reliability of the supply chain through inefficiencies, miscommunications and delays.  

2. Incompatible Formats and Standards

Different businesses often utilise varying EDI standards and formats, which can lead to difficulties in achieving seamless compatibility. Such issues can cause delays and errors in transactions. Establishing common standards and investing in a flexible EDI solution that can adapt to diverse requirements is a critical step in overcoming these compatibility challenges. 

3. Escalating Cost of EDI transactions 

The cost and the increasing volumes of EDI transactions can fast become a burden for businesses. As the volume of EDI messages grows, so do the associated costs for maintaining, managing, and scaling the infrastructure required to handle these transactions. A cost-effective solution from a trust partner can help with resource allocation and and ensure long-term sustainability of your EDI solution.  

4. Lack of Resources

Managing EDI in-house can be particularly challenging for buyers and suppliers of all sizes. Internal IT departments can struggle to cope with EDI issues and maintenance whilst also devoting time to concentrate on more strategic, value-added projects that allow the business to remain focused on its core operations. Companies can experience common EDI business challenges such as resource strain, high maintenance costs, and technical complexities. Ultimately leading to less efficient and effective business processes. A fully managed EDI service, which supports both entry-level web EDI and integrated EDI solutions, can help address these challenges. Such a service allows organisations to capitalise on the benefits of EDI regardless of size, sector, or technical capabilities. 

5. Scaling Your EDI Program

While EDI is a standard protocol, the reality is that trading partners often have their own flavor of EDI transaction sets. A “standard” EDI purchase order is different from industry to industry and trading partner to trading partner. So, when you start to add more customers, accommodating unique requirements and business rules can be an issue. 

There are three things you’ll need to do to scale your EDI program: 

• Make sure it accommodates multiple rule sets and document types: Many trading partners can have dozens or even hundreds of unique business rules. They might include individual document fields, data elements and business rule-driven validations, like store number or ship-to location. Your EDI solution should support diverse rule sets so you can adjust as you or your partners grow. 
• Integrate your EDI transactions into your enterprise resource planning (ERP) systems: If you only have a few trading partners, you can use “swivel chair integration,” where you manually enter data into the ERP from a standalone EDI system. As you scale beyond those few partners, you’ll need direct ERP integration to avoid manual errors and labor-intensive processes. 
• Consider outsourcing your EDI program to an EDI provider: Trading partner management, communication and testing can be a pain. Outsourcing these tasks to a third party fully managed EDI provider, is less expensive and can free your staff to focus on more valuable business activities. To help you determine what EDI provider works best for your organisation, be sure to check out our EDI Buyer’s Guide. 

Outsourcing can be a great option but be sure to choose your provider carefully. Many EDI providers offer direct integration into your ERP as part of their service offerings. Check to make sure they don’t outsource this project to third parties, which can lead to project delays and unforeseen costs. Our EDI services come directly from the TrueCommerce team, with employees who know the systems and can quickly offer support. 

6. Overcoming Bad Data

In a report published in collaboration with SAP, we found that 60% of B2B transactions are affected or suspended because of some data-related anomaly. That’s a staggering number and one that must be managed with better data governance to fully realise the value of EDI. 

It all starts with the order, which is where many data-related issues occur. Bad data is both a business issue and an EDI issue. In the report, we found that 16% of orders per month included an incorrect price, 20% involved out-of-stock or discontinued items, and 8% included a duplicate purchase order (PO). 

Business rules in your EDI processing system can monitor transactions for issues like price differences, valid POs, and product availability dates. TrueCommerce, for instance, includes a business rule exception management tool that can automatically send alerts to your team and trading partners to catch bad data before it hits your ERP system.Do you know if your ERP system is ready to process EDI transactions on demand? It’s one thing to have your EDI system deliver documents in real-time — it’s another for your ERP system to process them when they’re received or ready to be sent. TrueCommerce’s EDI integrations can help your ERP process transactions on demand and help you manage real-time transaction flow. 

For example, you might pull your EDI transactions from the network in an overnight batch once a day. However, the speed of business and increased customer expectations require you to be prepared to work in real time. Instead, you can have your EDI network forward documents as it receives them or automate mailbox pulls throughout the day. Alerts and notifications also allow your team to stay in the loop if processing errors occur. 

While keeping product flow and customers up to date, this visibility allows you to make fully informed business decisions. Instead of tracking down updates, waiting for inventory counts to refresh, or wondering if your information is out of date, decision-makers can act quickly with the clues they need at their fingertips. 

8. Mastering the Art of Transparency

Supply chain visibility can be challenging to master, as every system that touches an order needs to be open to outside trading partners. EDI formats started as means to streamline manual business processes and have been wildly successful. However, as supply chains become more complex, the value of EDI has shifted to provide better inventory visibility at rest and in motion. 

As the industry shifts from bulk fulfillment to one-to-one and direct-to-consumer models, transparency between trading partners is more critical than ever. You can improve transparency by implementing an EDI platform that supports a wide range of EDI codes, such as: 

• Purchase Order message (ORDERS) 
• Purchase Order Change Request message (ORDCHG) 
• Purchase Order Response message (ORDRSP) 
• Advance Ship Notice or Despatch Advice message (DESADV) 
• Invoice message (INVOIC) 
• Inventory Report message (INVRPT) 
• Credit Advice message (CREADV) 
• Instruction to Despatch message (INSDES) 

To combat the growing complexity of supply chains, EDI must go together with inventory visibility. Without it, you’re missing out on one of EDI’s primary benefits. 

9. Going on the Offensive

You’ve bought in. You’ve embraced an EDI implementation and have responded to trading partner requirements — and you want more. Luckily, you now have countless opportunities with customers, suppliers, transportation providers, and financial service providers like banks and insurers. 

Being proactive with customers can move you up in their implementation queue. It’s an excellent way to show your commitment to the relationship and demonstrate your capabilities as a business partner. For example, high visibility could enable deeper insights into your performance so you can give potential partners proof of your strong track record. Simply having a good EDI solution can assure trading partners that you’ll be able to meet their communication demands. 

Look to your suppliers to help streamline inbound inventory and supply chain visibility. Many of these companies can support electronically exchanged documents via EDI already. If not, send them our way — our team is happy to help your partners learn about and implement EDI. 

10. Security Concerns 

EDI is widely used across many organisations and industries. Nevertheless, concerns persist regarding the sharing of information with partners. These concerns include a lack of trust between parties.  the risk of data being exploited due to security breaches, and potential legal issues arising from organisational or governmental regulations. Selecting an EDI partner with evidential experience in security matters, such as awards and licensing is essential to ensure the safe exchange of information. Your partner should be one who upholds security measures and addresses clear compliance protocols.  

Master EDI With a Comprehensive EDI Solution 

EDI is a necessity and a boon for modern businesses, but it can cause some headaches if it isn’t done right. Make sure your EDI solution can help you tackle the challenges we’ve gone over so you can scale, reduce errors, work faster, increase visibility, and pursue new partnerships and growth. 

TrueCommerce offers a wide range of tools to help you make the most of EDI. With extensive integrations and a cost-effective fully managed service option, TrueCommerce enables you to connect to all your trading partners, replace paper-based processes with automation, and develop a more efficient, agile supply chain. Learn more about how TrueCommerce can simplify EDI and boost your chances of success by scheduling your free demo today.