How to Choose an EDI Provider

by | Jun 1, 2021 | Compliance, Order Fulfillment, Solutions, Suppliers

Whether you are new to EDI or re-evaluating legacy systems, choosing an EDI provider can be a challenge. But finding the best fit for your business while navigating the confusing jargon has never been more important. Armed with the right information, you can find an EDI provider that sets your business up for long-term success.

We’ve compiled common EDI questions and answers to help you make an informed decision.

What is an EDI provider?

An EDI provider is a business that sells EDI services, including web-based or on-premise software. EDI providers may also deliver other EDI-related services, such as value-added network (VAN) services or EDI testing.

EDI providers often specialize in a particular industry, such as retail, grocery, distribution, healthcare or automotive.

Is EDI still used?

Yes. For almost 50 years, EDI has been a standard method for data exchange. It is used today by organizations around the world and continues to expand every day.

EDI has become a shorthand way of describing various modes of electronic data transmission and the business processes associated with fulfilling an order to a customer. By using EDI, trading partners can exchange business documents such as orders, shipments, inventory updates and invoices in a standard format. Other terms such as B2B integration (B2Bi), order fulfillment and e-commerce fulfillment are also used to describe a similar process.

Rather than EDI, some companies may use XML, AS2, FTP, APIs or other methods to exchange this data. In some cases, these other methods are also referred to as EDI and are supported by EDI providers.

Want to learn more about how to select an EDI provider? Get our free white paper and a list of questions to ask a prospective EDI provider.

What are the types of EDI providers?

On the surface, many EDI providers sound the same. But there are very important differences between EDI providers. There are essentially two types of EDI providers: managed service and full-service EDI providers.

Managed services provide EDI technology that users manage and maintain themselves. In contrast, full-service EDI providers offer EDI technology but also provide the associated staffing resources responsible for customizing, optimizing and operating your EDI solution.

The most helpful question for businesses trying to navigate the full vs. managed service decision is this…. “Do you consider EDI to be a core competency of your business?” Or, if you’re new to EDI, “Will on-site EDI expertise provide a competitive advantage for your business?” Or even, “As you look to compete with others in your space, will having a team of EDI experts on staff set you apart from competitors?” If the answer to those questions is a resounding “YES!,” a managed service partner is likely your best option. If the answer is an emphatic “absolutely not!,” a full-service partner is a great fit as it will allow you, your team and your business to focus on things you know to be foundational to your growth.

What exactly does a full-service EDI provider do?

Full-service EDI providers manage the EDI function on your behalf. Here are a few of the tasks they perform:

  • Take ownership of understanding your trading partners’ compliance requirements and EDI mapping updates and changes
  • Communicate with your trading partners about EDI requirements and issues, including picking up the phone and calling your partner’s EDI department to fix an issue on your behalf
  • Optimize your EDI solution with your ERP and other business systems
  • Centralize all your orders (wholesale, retail, e-commerce and marketplace) in one place
  • Help you share data with 3PLs and other partners
  • Provide a team of trading partner, system and EDI experts available 24×7

What is the difference between EDI providers and vendor portals?

Vendor portals are created from purchased software or developed internally. The retailer manages the software, hardware, infrastructure, personnel and training. In addition, the retailer is responsible for driving adoption of the portal with its vendors. Suppliers need to log onto a separate vendor portal for each of their retail partners.

In contrast, EDI providers deliver a single system that can be used by all retailers and suppliers. An EDI solution frees businesses from the time-consuming process of either managing or using multiple portals.

Where can I find more information about EDI providers?

By applying the foundational principles above, your business can quickly and easily decide which approach to solving this challenge is right for you!

Check out our free white paper on the 7 building blocks of full-service EDI, or download our list of questions to ask a prospective EDI provider. You can also find objective reviews of SPS Commerce Fulfillment (EDI) on the G2 Crowd website.

Kirby Carr
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