Since the year began, we’ve seen some customers put EDI system initiatives on hold due to concerns over the direction of the economy. But what seemed prudent in January could be risky now.
In this article, we explain why it might be unwise to delay investing in EDI systems and B2B integration infrastructure. For some, those risks could outweigh the costs of modernizing and maintenance.
Base Investment Decisions on Economic Signals, not Media Noise
Back in 2022, many experts expected a recession. They were concerned that rising interest rates and a red-hot hiring market would conspire to prevent a soft landing.
The media amplified these views, recession fears mounted, and B2B spending began to slow. To be fair, there were a number of warning lights in the economy 12 months ago, such as consumer prices at a 40-year high.
We’re in a different place now.
As of this writing, unemployment remains near historic lows. A soft landing looks more likely than not (fingers crossed). At the same time, other signals point to an economy that’s more resilient than analysts understood, and one that’s poised for solid growth.
For example, U.S. GDP surged 2.4% in the second quarter, accelerating from the first three months of the year. Both consumer spending and business investment, up by 7.7%, drove this growth. And there is evidence that the Inflation Reduction Act is helping to fuel new growth in domestic manufacturing.
Meanwhile, the CHIPS Act has attracted billions in private investments for semiconductor production efforts. It has also turbocharged economic development in places like New Albany, Ohio.
Bottom line, organizations who are still on the sidelines fearing a downturn should consider how much longer they can afford to wait to get in the digital transformation game.
Avoid the Risks of Delayed EDI Modernization
According to analysts, reshoring and nearshoring strategies have helped to heal the U.S. economy faster than other leading economies. All those new systems to connect and trading partners to onboard are driving investments in EDI systems and B2B infrastructure.
For example, in a recent Cleo survey, 80% of company IT leaders report plans to invest in modernizing.
If your organization isn’t among them, you may not be able to pivot quickly enough when the next black swan event comes. In the meantime, closing new deals could prove challenging.
To deliver the level of support today’s trading partners expect, you need a B2B integration solution that offers multiple channels to pass data and connect systems, visibility, and e-commerce readiness.
Be Ready to Compete for Resources Inside and Outside the Organization
On the other hand, an improving economy comes with unique challenges. Others in your organization will be requesting funding increases and priority consideration. You’ll want to build your case with stakeholders. Especially those who aren’t familiar with EDI and its role in high-efficiency supply chain operations.
At the same time, getting the green light to modernize can present another challenge. Depending on timing, it might be difficult to find qualified integration resources. Despite layoffs in the tech sectors this year, competition for qualified EDI (and other B2B integration disciplines) talent is fierce.
Developing a strategic managed edi services plan could save your organization the distraction and expense of a full-time hire. Leveraging managed EDI services over the FTE option also helps you allocate resources smarter. A managed services solution lets you avoid the need to find non-EDI tasks to fill out how the new hire will spend their time.
Leapfrog Hunkered Down Competitors With Legacy EDI Systems
A competitor’s over-caution about the future direction of the economy could be an excellent growth opportunity for those who modernize (or those who already have). For example, organizations can grab market share by offering a better trading partner experience. Or by leveraging APIs to grow sales and revenue by connecting with online marketplaces such as Amazon or Walmart.
Despite signals of economic recovery, some organizations will continue to wait and see before they move forward on IT infrastructure investments. Don’t be one of them if you can help it.
Want Help Assessing Your EDI and B2B Integration Health?
EDI system performance and talent issues cost companies time, profits, and new business opportunities. Instead of one-size-fits-all templates, we work with you to develop tailored EDI solutions that meet your objectives and deliver them on time and in scope. Get in touch here if you’d like a fresh perspective on your EDI challenges—and opportunities.
