There are many advantages of sending and receiving trade documents electronically. For instance, it can increase productivity, be more cost efficient than alternatives, and it will give you a better overview of your business as you can exchange all your trade documents digitally through one platform.
In this article, we will look into some of the aspects you should consider when choosing an EDI provider.
What is EDI?
EDI (Electronic Data Interchange) is a concept for electronic exchange of trade documents. The goal of EDI is to make the exchange seamless between systems and formats that are not directly compatible.
A common use of EDI is the exchange of electronic invoices between businesses. However, EDI also includes the exchange of other electronic trade documents, such as catalogues, orders, order confirmations and despatch advice messages.
There are many EDI providers supporting the exchange of invoices, but when you need EDI for other types of trade documents the list of providers gets shorter.
The selection of providers will be further limited if you are involved in international trade and the documents need to be sent cross-border and globally.
In this article we will provide a few questions that may be useful to ask yourself when you consider using EDI for the first time, or when you are looking for a new EDI provider.
Which business processes shall be supported?
It is important to ask yourself this question to sort out your actual needs. Are you looking for an EDI provider to support your purchasing process? Or is the focus on accounting and invoice management? Do you need EDI to support order management and outbound logistics?
To evaluate the possible providers, you need to understand the processes that EDI will support so that you can make the right decisions. You may need several providers to help you with specific processes, or you can find a single provider that can handle all your needs. Further, each industry and business may have its specific needs, and you may need to look for a provider that understands your business and industry.
Does the EDI provider support the formats you need?
An EDI provider must support the formats used by your internal systems. In addition, the provider must support the formats used by your trading partners and be able to provide a mapping between these formats and your internal formats.
The more experience the provider has with different formats, and the more pre-configured mappings between formats the provider already has, the shorter time-to-market will be for your EDI project.
EDI and interconnectivity
If you have international customers or suppliers, you need to learn whether the EDI providers you consider have interconnectivity agreements with other providers (also called VANs) around the world.
The most important thing for you is to be able to reach your trading partners electronically through the EDI provider, either directly or through interconnection with other providers and trading networks. Some EDI providers have a large and expanding interconnectivity network, others are more limited.
Some countries, such as Sweden, Finland, and Denmark, have their own “closed” networks (I.e., NEA, TIEKE, and Nemhandel). If these are countries you trade with, the EDI provider must have access to the networks relevant to you.
Does the EDI provider have a PEPPOL access point?
An access point is like a mailbox where you can deliver and receive messages that are sent to or received from your trading partners.
PEPPOL (Pan European Public Procurement Online) is a digital infrastructure for electronic trade in Europe. PEPPOL ensures a simpler exchange of electronic information such as invoices and other trade documents to- and from customers and suppliers across borders. PEPPOL also operates with their own document formats, which again can simplify communication between the parties.
The prevalence of PEPPOL varies between countries, and Norway has taken a lead when it comes to adoption. Whereas Norway has approximately 250.000 participants (businesses) in the PEPPOL network, Spain (as an example) on the other hand only has approximately 4.500 participants.
To have an EDI provider with a PEPPOL access point is therefore vital in the Norwegian market, and it can be useful to evaluate the experience the EDI provider has with PEPPOL (how much traffic, how much competence, etc.). However, you may also need to reach businesses in countries where PEPPOL is not as widespread as in Norway.
Can the EDI provider help you with an analysis of your needs?
The choice of EDI provider may affect several areas of your organization, not just IT and finance. This means that you need to assess other challenges and opportunities that may arise based on the EDI implementation. Processes may need to be adjusted, there may be changes to IT systems, and employees may need to be trained.
When you choose an EDI provider, look for their experience with similar projects and whether they can advise you throughout the process.
Does the provider offer services other than exchange of documents?
While the EDI provider’s main task is to make sure documents are transported and translated between sender and recipient, some providers also offer value-added services to their customers. These services may include automation services, archiving services, portals, data- and insights services, and more.
One example of a value-added service that some, but not all, providers offer is validation and control of documents on behalf of their customers. This type of process automation will verify the content of the business documents, validate it against customer-specific requirements, and then stop or correct the document based on what is possible. Such services can potentially be extremely timesaving for the recipient, who would otherwise need to verify the content in the documents manually.
Customer support
To have access to high-quality and professional customer support may prove to be utterly important once you need help with your EDI challenges. While all EDI providers will offer customer support, there may be many differences in how it works when you need help.
You should investigate issues such as how long the response time for customer support is and what competence you will meet once you get help. Will you reach subject matter experts that can answer your questions directly, or will customer support merely be a gatekeeper restricting your access to the help you actually need? Will they be able to help you fix your technical issues as well? You should be able to ask for references from other customers of the EDI provider, and contact these to get a non-biased opinion about the provider’s customer support.