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Questions you should ask yourself before starting an EDI Program

It is important that you first determine whether your business is at the right stage to start doing EDI or not. EDI should be considered as a business strategy for expansion and growth and not just a tool to make your job of sending and receiving business transactions easier.

Use this below checklist to determine if you really need to invest in an EDI program today and if you are ready to scale.

Business questions you need to answer:

  1. Is the ability to better satisfy supplier, customer and/or vendor requirements important to your business?
  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. Being EDI-capable will put you ahead of other suppliers who are not EDI-capable. Do you aspire to be a step ahead in winning more business from new buyers or trading partners compared to others?
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?

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 prerequisites for EDI?

If you have answered yes to 90% of the above questions, then you should start thinking about reaching out to different EDI solution providers (if you need a third party EDI solution based on the budget allocated) or you can build your own EDI solution if you have the resources and expertise on the team. Everything boils down to the fact that it should make business sense for you to invest in a solution for long-term. Keep in mind whichever EDI solution you choose, it should be able to accommodate changing trading partner requirements and have broad capabilities. If you are a small business, you might want to take a look at some good small business EDI software solutions that fit your business needs.

One common mistake that companies make when considering an EDI solution for their business is sign contracts with different EDI providers for different buyers’ requirements. That is not the best practice. The more the number of software systems you use, more are the points of failure with multiple people, more people need to be hired and trained and therefore the whole purpose of saving costs gets defeated. Instead, choose one EDI provider that can handle any number of transactions, grows and scales with you and can provide flexibility to integrate with your accounting software, warehouse management systems, transport management systems, CRMs etc. end-to-end to complete the cash to order cycle.

Read next

Learn about the questions an ideal EDI provider should be asking you when you inquire about their services in order to decide whether they are the right partner for your business or not.

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