Outsourcing EDI? Ask the Right Questions.

by | Sep 25, 2014

By Angie Thorson, SPS Commerce

Considering that typically more than half of a company’s revenue is transacted via EDI, EDI operations are a critical business function. But many firms have only limited staff to handle such IT functions, often requiring them to look for third parties to manage their EDI operations.

So if you’re not outsourcing all or part of your EDI already, you are probably investigating your options. Here at SPS Commerce, we field a lot of questions every day to help dispel some of the myths of outsourcing. Here are some examples of questions to ask to full understand your options when considering outsourcing EDI:

Real business relationships

The first step is to do some discovery about a potential EDI service provider’s network. We recommend asking questions such as:

  • How many business relationships does the provider have? Be sure to define relationship as more than a paper document. It should include frequent communications and personal connections.
  • Can they pick up the phone and reach out to a person at these accounts?
  • Can they e-mail them on your behalf?
  • Are they communicating on a regular basis with your trading partners so changes are proactively taken care of?
  • How many outsourcing relationships do you manage with my trading partners? (e.g., how many suppliers’ EDI do you manage that transact with Target?)

Supporting all EDI formats

Especially if your company has global sales, you don’t want to worry about the different languages business partners speak in their EDI departments. You need to ask questions such as:

  • How do they handle various EDI format standards like X12, EDIFACT or Tradacoms?
  • Can their staff handle the mapping for all the formats and transactions you need today and in the future?
  • Do they have 24/7 support and monitoring for when things go array or you have questions?

Comprehensive mapping services

Mapping is where tough questions are most needed. If a provider says they will do the mapping for you, it feels like a done deal.  Unfortunately, too often issues arise later in the relationship when their definition of outsourcing doesn’t match yours. To be sure you are well aligned and know who will manage critical aspects of the process we suggest the following questions:

  • Who will make changes to EDI maps to keep them up-to-date with new trading partner’s requirements?
  • Who is in charge of knowing when a partner needs to make a change to the map?
  • Is there an additional cost changes occur? If so, what are they?
  • How long does it take to make changes to EDI maps? (often, you can’t afford to wait)

Understanding managed services

Caution must be taken with “managed services” as these EDI vendors may charge for individual services, in addition to their monthly outsourcing fees. Matt Cook, a veteran of IT projects in supply chain, puts the cautionary tale of managed service providers in perspective. You can read more from Matt in his book, Escaping the Software Money Pit: A Winning Roadmap for Managers and Executives.

Here is his checklist of questions for managed service providers:

  • Who works directly with my trading partners: you or the vendor?
  • Who answers phone calls and emails from my trading partners?
  • Who responds to incident reports?
  • Who does all those mapping changes to meet new trading partner requirements?
  • Who manages trading partner requests for new transaction types?

Cook states: “More than likely, in a ‘managed service’ arrangement, not only will you do all of those things, but you will also pay separately for work above and beyond your normal monthly running fees.” It’s a buyer-beware situation where the customer pays a la carte.

The bottom line: We find that most companies discover true value in an all-inclusive EDI service based on true outsourcing, relying on the experts with no surprises.

Work with the EDI outsourcing experts at SPS Commerce. Contact an SPS representative today to find out how our EDI solutions could work for your business.

Streamline and improve workflows with EDI.

Streamline and improve workflows with EDI.

Enhance supply chain predictability and connect to the retail industry’s largest network with EDI.

SPS Commerce Blog Team

SPS Commerce Blog Team

The SPS Commerce Blog Team is your resource for insider knowledge, news, research reports and best practices that will boost your business.
SPS Commerce Blog Team

0 Comments

Submit a Comment

Your email address will not be published. Required fields are marked *

Did you like what you read? Get updates like this delivered directly to your inbox.

Subscribe to our blog to receive weekly retail and supply chain news, valuable resources, expert tips and more.