Want to have a more profitable, efficient and competitive business in 2018?
Posted on February 8, 2018
Consider implementing or extending your use of standards-based EDI to transform your business's performance and cost base.
Digital transformation for your sales and accounts receivable
In this day and age we are all aware of how technology and digital solutions can help us save money, save time spent on manual tasks and reduce the likelihood of basic human error that can often be so costly for us in terms of time and resources to fix.
Simply finding an electronic way of doing a previously manual task is only the first step in realising the desired gains of efficiency and cost saving. The new way of working needs to offer something more. This is where a standards-based solution can give the extra edge over a proprietary system.
Why do standards matter?
We only have to think of some of the common problems we face in our everyday lives to quickly realise how standards simplify our lives, removing complexity, cost and duplication. Often they do this without us even noticing that they are there.
Imagine if every electronics manufacturer decided on its own type of plug? Imagine the difficulty faced by house builders and electricians if a variety of sockets were needed? Plugs & sockets are, at least, standardised on a national level; think about how much easier travel and international trade would be if they were standardised globally?
Clothing and footwear is another part of our daily lives where we are constantly "translating" different formats of clothing and shoe sizes - from US to UK and European sizes; and even then there is a lack of consistency across retailers in terms of the fit for any one given size. This costs the consumer, and the retailer, time and money in terms of trying on multiple clothing items and returning items that don't fit as expected.
Think back to the days of long supermarket checkout queues when each item was (you hoped) individually price labelled and then keyed manually into the till by the checkout operator. Depending upon your age you may remember the delays and frustrations shoppers experienced if an item wasn't price labelled and how long it took to find out how much it cost.
Think of the cost to the retailer in terms of manual labour alone to individually price label every single item in a store; the cost of items sold at the wrong price; the cost of missed sales if a shopper decided to leave the problem item behind.
Standards have transformed the way we live and continue to offer huge benefits to businesses large and small alike, if they are used to transform the way we work.
Transforming how businesses buy, sell and pay for goods and services
Placing orders, receiving goods and processing invoices and payments all needs to happen as efficiently, quickly and cost effectively as possible - to save everyone time and money.
Typically these administrative processes are non-competitive and it is to everyone's advantage if they are streamlined and unnecessary costs are driven out of the supply chain.
By having industry working together - suppliers, retailers & solution providers alike - these processes can be examined, requirements are identified, and a standard way of operating can be agreed. This is a core role of GS1; to bring industry stakeholders together to identify common issues and agree a more cost effective way of doing business that benefits everyone.
EDI is a great illustration of the benefit of supply chain standards for all parties. Over the last 20 years suppliers and retailers have worked together to establish an area of common ground that underpins the sales & payment transaction process.
The Order to Cash Cycle as it is known has been broken down into a sequence of transactional messages that share the details of the details of what is being ordered, delivered, invoiced and paid for.
These messages have been standardised and are available to all to implement.
- Standardised messages remove the need for each business to re-invent the wheel when they engage with a new customer or supplier.
- Onboarding customers and suppliers becomes more streamlined, enabling EDI users to achieve the benefits of efficiency and scale more quickly.
- Consistency of message implementation from one organisation to the next removes complexity and variation, the biggest drivers of cost in the supply chain.
- Mapping fields and business terms from one system to another becomes easier as does dealing with companies of differing levels of technical ability as standardised business message act as a common denominator.
- Having a full and standardised data profile of your products, orders, sales, stock and income delivers an unprecedented level of visibility of your business enabling better data availability for decision making within the business.
Better use of valuable human capital
The greatest payback from digitising and automating the order-to-cash process is the ongoing benefit of redeploying valuable human resources away from repetitive, manual data entry tasks to more value-added activities that deliver growth and differentiation for your business.
EDI enables you, as a business owner, to focus on the areas that you want to compete on - not on the basic mechanics of doing business.
To learn more about the benefits of EDI to your business watch our webinar recording Should you outsource EDI or run it in-house? or read our blog post: Automating the process of ordering and supplying products with EDI