EDI is a computer to computer communication standard for transferring formatted messages between two organizations doing business together. These organizations, called trading partners, must use a common EDI standard language, such as UN/EDIFACT, ANSI ASC X12, etc., to properly exchange information. While EDI requires two parties, the connections can either be direct or through a third party EDI service provider.
An EDI interchange consists of the following major processes:
Figure 1 : EDI outbound process
Figure 2 : EDI inbound process
You also want all your EDI communications audited, logged, thoroughly detailed, and traceable as the process moves critical data between you and your business partners.
Developed in the mid-60s, EDI replaced paper-based business transactions. It was created to provide a number of benefits compared to the old paper-based communication.
These benefits include:
Cost saving
EDI automates information flow, without any human interaction reducing the cost associated with:
Data sent by EDI, is not manually “touched”.
EDI data often take seconds to be sent.
Access levels to information sent by EDI are controlled at the EDI applications.
EDI can share information between all your trading partners in the supply chain.
Despite being a proven stable technology with simple architectures and obvious benefits with cost savings, only large enterprises used EDI to automate and manage their business-to-business (B2B) transactions. These legacy systems used EDI gateways to bridge the gap between back-end systems.
Figure 3: EDI landscape
EDI legacy systems also come with a number of challenges:
There are also high maintenance and service costs if you host your own EDI solution.
You also need your legacy EDI landscape to remain as generic as possible, covering all industry standard technologies and formats, so that you can scale it to include new trading partners as necessary. Thus, legacy systems are expensive to maintain even if you outsource them.
Lately, organizations are switching from point-to-point legacy systems to enterprise integration platforms that use enterprise service bus (ESB) technologies.
These platforms exchange information through built-in industry standards providing:
Implementing EDI through ESB also allows you to add new EDI functionalities to your network through additional software modules.
Thus, you get:
Figure 4 : EDI ESB integration
While EDI legacy systems are better than the old paper-based communication system, they are difficult to implement, and require a lot of resources to maintain. By using an ESB system, your organization will have better and more manageable EDI projects that will not only save you money but also automate the B2B process and improve the quality of your B2B transactions.
Why should you use an ESB?
The business world is undergoing a revolution. With the proliferation of technology across our lives and work, industries around the world are realising that the tried and trusted methods that have kept them moving forward might no longer suffice. Consumers today are connected, informed, and unprecedentedly technologically savvy, and as a result, the companies they deal with are expected to be the same.
Digital transformation — the process by which organizations modernize themselves to incorporate new digital technologies throughout their entire business — is becoming necessary to survive.
Modern clients want instant service and support from the brands they deal with. They want brands that make themselves available to the client in a way that suits the client, not in a way that suits the organization. And they want this experience to be offered seamlessly across every channel. In order for an organization to meet these needs and wants of the consumer, it is absolutely necessary for companies to be innovative and to stay abreast of digital updates and changes. With this in mind, decision makers in businesses are emphasizing the need for digital transformation within their organizations.
With the rise of tools such as CRM, ERP, SRP and others, it has become necessary to integrate these tools in order to have a complete view of your customers data and to provide them with the level of service they expect. Using an ESB will ensure all of your tools talk to each other and give you the power to understand your customers and drive your business forwards.
Contact us today to find out for yourself why our customers praise the effectiveness of our product at improving their IT networks and systems.