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What are the Benefits of EDI?

EDI (Electronic Data Interchange) has been around for more than 50 years and is the gold standard for electronic document exchange between organizations across every industry. The reason for that is speed and accuracy with which the whole process operates when run with EDI. It is imperative for you to know how EDI improves customer experience and significantly lowers costs.

You need to understand that EDI should not just be used as a tool and brought in (as a part of your internal systems) once your company is mandated to do EDI by your trading partners but when you are ready to scale, you should implement it as a part of your business strategy. EDI can open many doors for you and gives a foot in the door for a buyer that you may have not dreamed of.

Here’s what you need to know about the real benefits and advantages of EDI:

  1. Increased Quantity of Orders and Revenue

EDI plays an instrumental role in strengthening the relationship with retailers and suppliers by managing document exchange efficiently and quickens the EDI order processing than a paper-based processing with reliability. As a result of which, there is trust built between the entities if you hire the right resources (EDI software and talent) to keep the process running smoothly. You are more likely to get more orders from your buyers or retailers and more business. More business means more revenue and a good reputation for your brand in the market.

  1. Reduced Time and Money Spent on Overall Processing
Imagine, if you hired resources internally to manually key each and every order entry, invoice and any other document in each of your back-end system. They will end up spending hours and hours of time in doing repetitive tasks that can be boring. At the same time, you are wasting your money paying those resources to do redundant tasks. EDI when automated saves all the time and costs spent on these tasks to free up your resources for business activities that matter and generate revenue. You’ll be surprised that costs of processing an order manually is reduced to a fraction when done with EDI!
  1. Serves as a Marketing Tool for Business Expansion

When you first become ‘EDI capable’ which means you have an EDI software and you have already on-boarded a trading partner on your EDI software, that’s a great sign for other trading partners. This capability shows that you are ‘ready’ to transact with others too. When you are in a position to start doing business with others in the market, you stand a better chance and are given a higher priority over others who are not ‘EDI capable’. Therefore, having EDI as a part of your growth strategy as you scale is one of the best decisions you can even make for your business.

  1. Reduced Errors
This is an obvious benefit of EDI because lesser the manual data entry into systems and more automation, lesser are the chances of EDI errors that can occur while document transmission. However, there is a constant need for your team to keep monitoring for errors proactively even before they appear, make sure all your connections are well set, EDI testing is done before you go into the final production phase. Reduced errors mean few to zero fines or chargebacks from your trading partners which is great because in some cases fines cost millions of dollars for a business.
  1. Increased Business Efficiency and Performance
EDI frees up time for your team to focus on the tasks that are necessary for revenue generation over repetitive and redundant tasks that are cumbersome and boring. Undoubtedly, your team’s performance should get better and is likely to boost their morale for being involved in a constructive process for the company.
  1. Enhanced Visibility into Overall Process
EDI provides visibility and transparency into the entire document exchange and integration process which is greatly useful in every industry whether it is to track origination of errors, inventory data, track shipments, track and trace drugs, transportation of good etc. Data loss is minimal if EDI implementation is followed step by step and is a win-win for all parties involved-your team, your trading partners, your EDI software provider.
  1. Paperless and environmental friendly

The emergence of EDI as a software has eliminated paper use because it is all electronic transmission. There is no fax or mail required to send information from one entity to another. Like many other organizations promoting paperless transactions in every industry, EDI along with APIs as technologies are at the forefront of providing an environment friendly solution.

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Get prepared to setup a new trading partner by following a simple step-by-step process if you are EDI-capable already