Organisations looking to use EDI to streamline the exchange of data with customers, suppliers and partners will come across all manner of IT buzzwords and acronyms as they try to find their feet.
To help these companies who are considering using Electronic Data Interchange (EDI) for their business processes, Lobster has compiled a Q&A list featuring the ten most frequently-asked questions from EDI newbies.
1. WHAT’S EDI?
Electronic Data Interchange, or EDI for short, is used to automatically exchange data between applications. In essence, this means that it is the actual system of the one business that is exchanging information with the other business’s system – no human intervention needed. An example of EDI, would be a company which uses a protocol to automatically place an order with a supplier. This order can then also be processed automatically as all the necessary data has already been transmitted to the supplier’s system. All it takes is for the IT systems of the companies to be able to communicate directly with one another.
Sadly, however, this isn’t as straightforward as one might think, as companies often struggle to get their various software systems to work together. This has to do with the complexity and the sheer number of systems being used internally and externally. In order for these applications and systems to work together smoothly, seamlessly and without errors, there needs to be an interface that links all the data streams. Lobster_data offers a number of innovative solutions to support companies with all their EDI and EAI needs.
2. HOW DOES EDI WORK?
Large organisations use specific data formats and standards for exchanging information. The standards used in EDI are EDIFACT, Fortras and BMEcat but organisations also use CSV files or texts in fixed record format. Companies that want to exchange data with each other must have access to a mapping tool with which they can convert their own data to a standard format. The other company that receives the data converts the standard format back to their own internal format in order to be able to communicate with their own internal systems.
3. WHAT ARE COMMON, REAL-LIFE EXAMPLES OF EDI BEING USED?
Below, we have listed a number of common applications of EDI:
- Verifying reference data
- Facilitating a track-and-trace system
- Temporarily storing partner reference values
- Aggregating order items
- Registering data for statistical purposes
- Creating support documents for EDI processes
4. CAN I EXCHANGE DATA WITH ANY SYSTEM USING EDI?
Whether it’s possible to exchange data with a certain system, depends very much on the chosen EDI solution. Lobster_data, for example, allows users to quickly and easily build application-specific connections, making it possible to exchange data between all manner of systems and applications. It also supports many communication protocols and standards so data can be exchanged with virtually any system that has the potential to support data integration. Lobster_data’s versatile underlying technology also allows companies to create their own interfaces which they can then use to connect to other systems.
5. WHAT ARE THE BENEFITS OF EDI?
Let’s refer to a practical example to answer this one, so the benefits can speak for themselves. Take placing and then processing an order, for example. EDI offers a whole host of advantages in this scenario. For starters, companies are able to cut costs because the order process needs much less or virtually no human interaction. Then, there is also the time that companies are able to save, which comes from the shorter turnaround time between placing and processing an order. And lastly, there is less chance of human error as the systems are exchanging data directly with one another, so no one is having to manually enter anything into a system.
In order to win and retain customers, it is vital that companies are able to respond quickly to market demands. All systems in the supply chain must be able to exchange information in real time and without error in order to avoid unnecessary delivery delays for the end customers.
Of course, the integration of EDI within business processes is not without its own challenges. From an external point of view, the systems of the respective supply chain partners need to be able to support the transition, but then internally there is also a need for the business’s IT department to be knowledgeable and committed in order to ensure that the EDI solution is successfully integrated, thereby creating a high-availability system.
A company that chooses Lobster_data is quickly able to carry out integrations successfully. Due to the intuitive graphical interface, even less technically versed employees are able to perform integrations quickly and without error.
6. ARE THERE ANY PITFALLS I SHOULD TAKE INTO ACCOUNT WHEN IMPLEMENTING AN EDI SOLUTION?
When implementing EDI solutions, organisations should definitely consider a number of potential stumbling blocks.
The first relates to a lack of technical documentation. This is a crucial consideration given that organisations work with numerous external trading partners, and these partners need to know what your requirements are, so that the EDI integration process can go smoothly. Sadly writing this documentation takes time. With Lobster_data, however, this is not the case. Lobster_data makes creating documentation very easy, as it is automatically generated when creating and modifying interfaces.
The second pitfall relates to a basic lack of knowledge to do with these requirements and specifications for integrating with trading partners. But if partners don’t provide a comprehensive picture of their IT systems being used within their organisation, this can cause problems. What if parts of their IT deviates from EDI standards?
The third pitfall has to do with the lack of monitoring after implementation. Once the EDI solution has been set up, it is vital that the processes are monitored properly. If an integration is not working as intended, it is imperative that the bottleneck be located and resolved quickly. Luckily, Lobster_data’s monitoring tool gives users a quick overview of the entire EDI process, allowing organisations to quickly identify any issues.
7. WHAT DOES OUR IT TEAM NEED TO KNOW SO THEY CAN INTEGRATE EDI WITHIN OUR ORGANISATION?
Organisations wanting to integrate EDI within their processes must have at least a basic understanding of the following three key areas: processes, communication protocols and EDI standards.
The whole point of EDI is to be able to automate any given business process. Think of all the administrative effort that usually goes into processing orders, shipping goods or sending an invoice. A sound understanding of the respective business processes is fundamentally necessary in order to implement them digitally via EDI. Without this knowledge, it is impossible to set up an EDI process properly.
Understanding communication protocols is also important. Partners or systems could be using any number of different communication protocols, so it is crucial to have a good knowledge of each relevant communication protocol in order to be able to identify integrations easily. Hence, knowing how to configure communication protocols is also important.
EDI information exchanged between systems and/or partners needs to be structured and formatted in a certain way. This is essential so that the data can be translated correctly. A sound knowledge of EDI standards is crucial to ensure the integration is a success.
Setting up integrations between parties and partners is usually a labour-intensive and complex process due to all the programming that is involved. Not so with Lobster_data. The solution’s graphical interface makes setting up EDI standards and exchanging information between different internal and external systems much more straightforward.
8. WHAT ARE THE DISADVANTAGES OF PROGRAMMING AN EDI SOLUTION OURSELF?
Firstly, companies that want to do EDI entirely on their own have to understand how interface programming works. Setting up integrations via interfaces usually takes a number of weeks and, in practice, only one person within the organisation usually specifically knows how it has been set up. The moment this person leaves the organisation, the knowledge is lost. Not to mention the necessary technical documentation which is rarely kept on file simply due to the sheer amount of effort involved in creating it.
Choosing Lobster_data means choosing a solution that takes the effort out of realising integrations. With Lobster_data, setting up integrations usually only takes half a day, and the graphical interface also makes it a lot easier to implement changes. After a two-day training course, employees are able to create their first integrations independently.
9. WHAT COSTS SHOULD WE TAKE INTO ACCOUNT WHEN IMPLEMENTING EDI WITHIN OUR ORGANISATION?
When setting up an in-house ERP system, companies will sometimes hire an external ERP consultants, who often charge a hefty hourly fee. So not only do these organisations then have to cover the costs for setting up their own IT infrastructure and paying their own IT department, but they also have to find the resources to fund expensive freelancers.
When an organisation chooses Lobster_data as their middleware solution, they only need to budget for a one-off licence fee. The great thing about Lobster_data’s pricing model is that its licence fee covers an unlimited number of integrations. Although other providers might have lower initial costings, they will often then charge a certain amount for each integration. It’s not long before things add up, making for a nasty surprise when the invoice arrives. With Lobster_data there are no hidden fees.
10. WHAT SHOULD I CONSIDER WHEN DECIDING WHICH EDI SOLUTION TO GO FOR?
The Total Cost of Ownership (TCO) is particularly important when choosing an EDI solution, as this ultimately marks the lowest cost per integration. If you are considering setting up an EDI solution completely independently, then you’ll also have to take consultant fees and the price of the technical infrastructure into account.
The user-friendliness of a middleware solution is also an important consideration when choosing an EDI solution. How easy is it to set up integrations with partners and in-house systems? Will it be convenient to make changes later on? How flexible is the system? Many systems tend to deviate a little from the common standards, so you need to make sure that your middleware is still able to support these connections.
It’s also important to make sure that the EDI solution automatically sends an error message to all responsible employees within the organisation in the event of malfunctions or unforeseeable events. Organisations should also investigate whether the EDI solution is future proof: will it be possible to support integrations with other systems in the future?
Companies who choose Lobster_data gain access to an extremely versatile interface for setting up integrations between different internal and external systems. For a one-off licence fee, organisations can realise an unlimited number of integrations. This means that they will never have any unpleasant financial surprises.
DO IT YOURSELF, OUTSOURCE OR CHOOSE LOBSTER?
Designing, building and maintaining an EDI solution in-house requires a lot of time, money and energy. Companies have to consider the cost of purchasing and maintaining servers, network equipment and connections. What’s more, creating connections by hand takes a lot of time. In fact, a company will oftentimes only notice quite how long it can take when they finally finish only the first connection. And let’s not forget that as the company grows, the number of these necessary connections also increases.
Some companies may choose to hire EDI managed service providers, which offer to create the connections for these companies at a set price. Although this solution may seem very attractive at first glance, upon closer inspection it becomes clear that the costs for these managed services can quickly add up. Each new integration comes at a cost and some providers even charge an amount per integration performed. Suddenly EDI managed service providers are not as cost-effective as they first seemed.
The best bet for companies wanting to work with EDI is to choose Lobster, which charges users a one-off licence fee to exchange an unlimited amount of data. Not only does Lobster’s user-friendly software take on the lion’s share of realising integrations it can also be run on-prem or in the cloud.
SATISFYING CUSTOMERS SINCE 2002
Every year since 2002, Lobster has helped hundreds of companies across several European countries to realise integration within their business processes. Said process improvements have, in turn, enabled these companies to significantly improve their profitability.
CUSTOMISED TRAINING AND SUPPORT
After a three-day training course with practical examples from your own company, you can start using Lobster immediately. And if you still have questions afterwards? Then, please contact our outstanding support team by email or phone.
Companies that choose Lobster’s EDI solution are required to take part in a two-day training course which covers all of the software’s features. The great thing about this training is that it uses examples from the respective business’s own operations, with the result that, thanks to the user-friendliness of the Lobster software, new users can be up and integrating their business processes as soon as they’ve completed the training.
WANT TO LEARN MORE?
Over time, margins in the transport & logistics sector will only become tighter as companies grapple with an evergrowing number of competitors. In order to stay afloat in this competitive industry and harness the possibilities of data interchange, it is important that companies opt for a good EDI solution.
Lobster is here to help logistics companies achieve successful integrations. And over the years, Lobster has accumulated an impressive list of happy customers. Are you keen to find out what Lobster could be doing for your organisation? Simply drop us a line and we’ll schedule a complimentary meeting to tell you more about the benefits of using EDI in the transport & logistics sector.
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