researchHQ’s Key Takeaways:
- While traditional electronic data interchange (EDI) refers simply to the exchange of electronic data format types, modern EDI includes the governance, onboarding and data transformation processes that enable traditional EDI.
- Common issues with traditional EDI, such as rising costs, poor scalability, complexity and a lack of automation, are causing companies to shift to cloud EDI solutions.
- The right cloud EDI solution helps enterprises to accelerate partner onboarding, meet new integration requirements, scale to meet changing market demands and increase revenue.
Companies across the world continue to rely on EDI for their important B2B data exchanges because it’s a standardized and effective way to communicate with all the members of their business ecosystem, which today includes trading partners, customers, suppliers, and vendors, and so many other entities. While the demise of EDI has been predicted for years (and greatly exaggerated), it’s the demise of traditional EDI mechanisms that’s more likely happening right now. That’s because as businesses look to improve agility and IT flexibility, cloud EDI software has become a preferred way to get there.
Traditional on-premise EDI usually refers to the exchange of electronic data format types, which are defined by standards organizations, usually X12 and EDIFACT. Modern EDI generally includes more of the governance, onboarding, and data transformation processes that enable traditional EDI, and it reflects how diverse a business ecosystem really is in the era of today’s digital commerce.
Traditional EDI methods have worked for many years and become tried-and-true solutions that enterprises rely on, but there are more modern solutions that offer new and effective ways for companies to conduct business using EDI and even non-EDI. Because there are so many partner and customer data requirements that companies must manage, from protocols to support for connections across systems, applications, and other data resources, a modern cloud-based EDI solution gives companies more flexibility than a traditional EDI solution.
Here’s how the modern enterprise can benefit from cloud-based EDI software as part of a hybrid integration platform.
Here’s Why Companies are Migrating to Cloud EDI
Certain traditional EDI tools become restrictive and inflexible, which is why many organizations are turning to a form of cloud EDI instead. Cloud EDI software offers a combination of technological and business process improvement designed to meet the demands of a 2020 business. From data transformation capabilities to streamlined automation, cloud EDI tools put your enterprise in a position to tackle any potential integration challenges that arise, without having to deploy and manage the software and hardware.
A centralized cloud integration platform capitalizes on an EDI translator that can accept and transform EDI (as well as most other data formats like XML and flat files) and then move that data to other systems and applications, whether internal or external. In short, when you need to connect legacy, on-premise processes, systems, and applications within your environment to cloud applications – which is the case for most businesses today – cloud EDI offers more elasticity and business agility.
Common Challenges with EDI
Because many traditional EDI solutions have become outdated as more companies embrace cloud IT strategies, it becomes more difficult for enterprises to conduct successful EDI in order to keep up with the demands of modern customers. Here are some of the most common challenges enterprises face from their EDI technologies and why they should strongly consider a move to a cloud-based EDI solution.
EDI certainly is an expensive investment. But maintaining outdated and legacy EDI solutions can further exacerbate costs. When an enterprise owns software and hardware for EDI, that also requires various financial and employee resources to manage all of it. Additionally, when something does go wrong, the hours and costs for maintenance also add up quickly.