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Being EDI Capable – What Does it Mean?

Being EDI capable, simply means that you have an EDI solution or software in place to exchange documents with your trading partners.

Having an EDI software in place means that you have done your homework and you are ready for business. This is because as a supplier of products in any industry, your buyers (aka trading partners) will mandate you to comply with their EDI requirements to complete an order to cash cycle. EDI helps all parties involved in selling and buying to streamline the business processes. EDI also helps in automating your internal processes, making them efficient and helps your team be productive in doing what they do best. This is why you need to have an EDI software to exchange EDI documents.

Should I reach out to the buyers or should I become EDI capable first?

This question is asked most often when small businesses reach out to us and feel as though they are ready to sell. An important point for you to understand here is that being EDI capable will give you an edge over other sellers because you can use EDI as a marketing tool to present your product company as a technology first company. Being EDI capable can become a good selling point when you are competing against other products in front of the buyer.

We suggest that if you have established a product-market fit for your product and ready to launch your product on your website and marketplaces, you should start shopping for the right EDI solution that fits your infrastructure, affordability and resources. It absolutely depends on the stage at which you are in your business.

These are some important questions you can ask yourself and your team before you make that decision:

  1. Business questions you need to answer:
  1. Are an increasing number of business partners deploying EDI? Are they mandating you to become EDI capable?
  1. Are you looking to improve business performance while saving costs?
  1. Are you looking to enter new markets and expand into bigger business partners?
  1. Company’s Internal questions you need to answer:
  1. Do you have a senior management buy-in?
  1. Are you looking to improve your internal processes, make them more efficient, increase productivity and save on time, money and resources?
  1. What does your internal infrastructure look like? Is it a setup for an on premise or a web-based EDI solution?
  1. What is the skillset you have on your staff?
  1. Questions about your partners you need to answer:
  1. Which of your business partners have the highest volume of transactions?
  1. Which business partners do you want long-term relationships with?
  1. Do your partners have the right technical pre-requisites for EDI?

How to become EDI capable?

If you have answered “yes” to ninety percent of the questions, then, you are on the right path to becoming EDI-capable.

Now, there are multiple ways or different types of EDI in the market through which you can become EDI capable. You can either outsource your EDI operations to a managed EDI provider that handles end-to-end implementation from setup of their software, trading partner communications to implementation and post-implementation monitoring of EDI documents or build an in-house EDI system which needs an in-house team and takes a long time. The other option is having an on-premise EDI solution that is installed in your computers physically but such solutions are now becoming extinct with the advent of easier cloud-based or web EDI software solutions which can be operated through an internet browser. Most businesses are therefore, moving to web EDI solutions because of ease of use and web-based EDI provider will worry about the software upgrades and maintenance without any hassle to you. 

Whether you opt for an on-premise or a cloud EDI solution on a subscription basis, you can always take help from an EDI consulting company like EDI Support LLC that brings their EDI knowledge, implement your EDI solution and completely support you post-implementation with daily EDI monitoring (which seems to be a challenge with most managed EDI service providers).

I am EDI capable. What can I do next?

Once you’re EDI capable, you either can start reaching out to different businesses that can buy your products (market your business) or if you already have a business that is ready to buy your products and sell to its customers, you can start exchanging documents with them.

Once you and your trading partner have agreed to trade, you’ll receive trading partner requirements from them. You need to configure and test your EDI to make sure you’re communicating with the trading partner correctly and checking the flow of data “end-to-end”. Once you are in production, you and your team needs to keep monitoring the process to make sure there are no errors. If there are any changes to the compliance requirements, your trading partner notifies you and you need to translate and map EDI data for their new protocols.

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EDI compliance refers to the business’s ability to comply with the agreed upon EDI standard. Being EDI capable, simply means that you have an EDI solution in place to exchange documents with your trading partners.

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