EDI (Electronic Data Interchanges) have been around for a few decades now. It has been the go-to-technology for businesses to automate their processes and facilitating smoother business transactions with their trading partners.
Undoubtedly, the functioning of EDI is critical to business continuity. To sustain the application of EDIs in the modern age, an enterprise needs to reconsider to make a switch from traditional EDI software to the cloud-based EDI solutions. There are various advantages and factors why the latter is a better alternative than the first one. It is predicted that global public cloud spending will hit $200 billion in 2019 as more and more enterprises are moving their existing systems to the cloud. Thus, to align with this trend, a cloud-based EDI solution needs serious consideration from enterprises.
There are multiple business advantages a cloud EDI enjoys over the traditional version. It not only harnesses the power of a cloud but also frees businesses from EDI limitation while ensuring the smooth connectivity with the trading partner’s applications, which again shows a trend in migrating to cloud.
Here are the five reasons why traditional EDI software are challenging and why your enterprise needs to consider moving to a cloud EDI –
Moving to Cloud EDI Reason 1 – Rising Costs - It is not hidden that implementing EDI software is a costly affair. The traditional EDIs software is hosted on-premise and requires a significant amount of hardware and software investments.
This requires manual manpower to manage the EDI changes along with hardware and software upgrades for catering to changing business requirements. This comes as an additional cost for an enterprise in the form of systems costs, manpower costs, etc. The cloud-based EDI solution replaces the on-premise hosting and requires no investments in systems hardware/software.
Moving to Cloud EDI Reason 2 – Scalability limitations – Although EDIs have a standardized format but each trading partner has its own version of EDI set, customized as per the business requirements. As there can be numerous trading partners ranging from hundreds to few thousands, the size of EDI documents could be large to accommodate all the fields required to carry out business transactions with a particular trading partner. The traditional EDI solution cannot be scaled up in size quickly and effectively to cater to the customized requirements for each trading partners.
They show serious scalability issues and can create hurdles for business continuity. On the other hand, a cloud-based EDI solution can overcome these limitations as an enterprise can easily increase or decrease the data storage size as per the needs and pay for what they use. The adjustability provided by cloud-based solutions makes a major difference to the overall costs incurred in the long run.
Moving to Cloud EDI Reason 3 – Remotely Unavailable - As described earlier, the traditional ERP software is hosted on-premise, thus they have accessibility limitations. In today’s world where mobility is everything, having restricted access to EDIs is a major drawback.
On the other hand, having a cloud-based EDI solution can be accessed from any location at any time, even this can be linked up with your mobile applications to monitor the EDI systems just with a click.
The remote access ensures business continuity and promotes convenience for the users.
Moving to Cloud EDI Reason 4 – Risks and Staff Competency – There are frequent customizations that are required to the EDI process when an enterprise is dealing with multiple trading partners. An on-premise traditional EDI would need to employ IT staff who needs to be well versed with the advanced EDI knowledge to make the changes or upgrades. Also, it comes with risks as new technology updates need to be applied to the whole system and any glitches might halt the business operations.
By moving to a cloud-based EDI solution, an enterprise eliminates the risks as the system updates would be tested and implemented by the service provider. There is no need to deploy IT resources to make the changes functional. All this comes with security, safety and makes sure the EDI system remains up to date with the latest requirements.
Moving to Cloud EDI Reason 5 – No Automation – Traditional EDI solutions lack functionality to seamlessly integrate with all the systems and applications. They need manual intervention to form the connections to communicate with the trading partners' applications.
This process delays the partner onboarding process, making it elongated and inefficient. Also, as the connection is done manually, it is prone to errors which could be problematic for the business processes such as O2C (Order to Cash) and P2P (Procure to Pay).
A cloud-based EDI solution overcomes these limitations. It has ready to build connectors and can quickly connect to the partner’s applications whether they are hosted on the cloud or on-premises. It supports automated workflows for a seamless connection between the applications.
A cloud EDI Gateway enables an enterprise in its pursuit of digital transformation. It ensures quick onboarding of new trading partners and ensures seamless transitions to existing trading partners' business requirements change. Moving to a specialized cloud solution saves valuable time for the enterprise and its resources which can be deployed for the more strategic tasks and focusing on core business challenges.
It also empowers an enterprise to quickly implement and respond to changing business demands and strive harder for bringing their integration goals to speed. So, if you haven’t contemplated making a switch to cloud-based EDI solution, think again!