For all the disruption and pain it brought, the pandemic trained us to work and shop from home. In the post-pandemic era, B2C and B2B buyers expect no-friction purchasing and 24/7 access to goods and materials.
Clinging to outdated EDI systems and integration infrastructure can have dire consequences. That’s because legacy data exchange tools limit a company’s ability to connect with ERPs, apps, and sales channels, and properly support trading partners.
Let's delve into the risks of legacy EDI systems and examine how some companies use modern solutions to seize new growth opportunities.
Risk 1. Being Unable to Connect to Online Marketplaces
Perhaps the greatest risk of sticking with outdated EDI systems is not being able to connect with online marketplaces easily.
In last week’s post, we cited how WD-40 grew sales through online marketplaces Grainger.com, Ace Hardware, and Amazon. However, in the digital age, online marketplaces are quickly becoming the piston driving offline commerce.
Retailers from Macy’s to Dick’s Sporting Goods allow customers to shop online and pick up their purchases in bricks and mortar locations. Once they’re in store, these customers often buy more.
At the same time, online B2B platforms like Faire Wholesale connect independent stores and independent brands, to give small businesses a way to compete against Amazon and chains.
Meanwhile, eBay features a Business and Industrial section that lets B2B buyers find deals on everything from office supplies to heavy equipment.
The lesson for today’s businesses no matter their size is clear. Failing to connect to these platforms means missing out on a massive customer base and new revenue opportunities.
Risk 2. Slowed or Blocked Revenue Streams
While we typically share stories with a positive outcome, the following example may be more helpful to challenged businesses. It illustrates the danger of failing to deliver the seamless and reliable data integration that trading partners depend on.
A few years ago a manufacturer who made a quirky but effective bathroom product needed our help to solve a big problem. A major account was withholding invoice payments because of persistent errors with their ASN (Advance Shipping Notice) documents, also known as an EDI 856.
When the 856 works as designed, stuff shows up on time, and people are ready to receive whatever goods or components they’ve ordered. It saves them countless hours of wasted time, and billions in costly mistakes.
When it doesn’t, data and revenue stops flowing.
Risk 3: Being Hard to Do Business With
As Hemingway famously said about bankruptcy, it kills slowly at first, then all of a sudden. It’s the same with poor integration.
The problems stemming from this supplier’s ASN errors led to a situation so dire, that they eventually lacked the funds to pay for the solution that would have gotten their cash flowing again.
How might this story have played out if the manufacturer had a properly configured and managed EDI system? They would have been able to detect ASN errors and resolve them before they became relationship enders.
The outcome also illustrates a bedrock principle of B2B integration: You can’t fix what you can’t see.
Business ecosystems require seamless integration. If your systems can’t play well with others, people begin to question your fitness as a trading partner or supplier.
In today’s digital economy, the companies that are experiencing rapid growth don’t have a secret formula for attracting new customers. They just make it easy for customers to buy from them.
Risk 4: The Wrong Cloud Strategy
Moving EDI and other key data exchange workflows to the cloud offers compelling benefits such as cost savings, increased uptime, and simplified management.
On the other hand, there can be significant downsides. These include vendor lock-in, security concerns, and increased costs, especially for organizations with high EDI volume. Some companies who have migrated to the cloud have migrated all or part of their integration infrastructure back on premises in response to these concerns.
Whether you're considering a move to or from the cloud, it’s critical to ensure that EDI and ERP systems drive the conversation.
Risk 5: Becoming a Dinosaur in the Land of the Giants
In today's competitive landscape, companies have a choice: Meet the customer on their terms and enjoy the success of giants like Walmart. Or follow the example of Blockbuster Video.
Theirs is a tragic American riches-to-rags story. Once as ubiquitous as McDonald’s, they didn’t have to fail. But fail they did, thanks in part to their own titanic success in the years between 1980 and 2000.
As a result, senior leadership never imagined a day when their growth would stop and so they blew off the threat from Netflix. Today Blockbuster is a faded memory of life before streaming.
As of this writing, the market has market capitalization of Netflix (NFLX) is nearly $176 billion.
Want Help Assessing Your EDI and B2B Integration Health?
If B2B integration and EDI system performance issues are dragging down efficiency and growth potential in your organization we can help.
Reach out to learn how we help companies work smarter and faster, save money reduce errors, and pursue new opportunities.
