After a great deal of consideration, you have decided to outsource the task of handling your EDI system to a third party. However, that is only the first step in the process. Now, you need to find the right EDI service provider for your firm.
No single EDI service provider has a monopoly on the market because there is no one-size-fits-all solution. You need a service provider that has deep expertise in your industry, one that will offer the most services at the most reasonable prices, and one that will form a long-term relationship with your company so that it stays agile and competitive.
What is EDI Outsourcing
When you outsource your EDI system, you have a third party manage the process of using EDI to communicate and exchange data with your trading partners. Most businesses that outsource their EDI needs are on the smaller side. There are three main ways to outsource your EDI:
- Total EDI outsourcing
- Customer and supplier onboarding
- EDI service bureaus
Total EDI Outsourcing: If you choose this option, the third party will provide a cloud-based or SaaS service that does not require your company to purchase any software or hardware. The provider takes full responsibility for setting up EDI services, including translation software, operating systems, maintenance contracts, mapping, and more. The amount you pay is generally dependent upon the number of documents exchanged, trading partners involved or integration points used.
Customer and Supplier Onboarding: Going this route involves purchasing the needed software for EDI but handing over its operation and maintenance to a third party. Customer and supplier onboarding can be a good choice for smaller retailers that lack the manpower to manage their EDI needs on their own premises. The model has several variations so it is flexible to fit a variety of businesses. Costs to consider comprise initial and ongoing licensing fees for software and the price of software-hosting infrastructure.
EDI Service Bureaus: The most common type of EDI outsourcing is through a service bureau. Typically a small business dealing with a larger manufacturer or retailer will choose this option as a means of ensuring EDI compliance. While it can be costly for long-term use, it can be a sound option for low-volume clients using it for shorter periods.
EDI Outsourcing Checklist: What to Consider
- Is your outsourcing partner-hosted or multi-tenanted?
- Do timelines correspond with your SLAs with trading partners?
- Who is going to be the point person, and what processes are in place for that person to follow?
- Is the point-person customer-facing, or will the outsourcing partner be customer-facing?
- Do you need an outsourcing partner who specializes in particular niches?
- What does the support package include?
- Does the outsourcing partner have a long customer list, or are they new in the field?
Three Integration Questions to Ask
Before you get started, there are three integration questions to ask yourself:
- Is integration a differentiator in your industry?
- Is your integration complex?
- Do you want to control your environment, but lack the capacity to maintain it on your own?
If integration is a differentiator, then keeping it in-house might make more sense. However, if everyone in your industry is doing it and it is not a core competency, outsourcing is the better choice. Additionally, simple integrations are easier to outsource, whereas complex ones might best be handled by in-house staff.
What Kind of Outsourcing Partner Is Needed?
There is more than one kind of outsourcing partner. Some outsourcing partners offer hosted services, in which you own the software and the provider performs the services. Other providers offer multi-tenanted services, in which you own the environment and share the infrastructures and the services of the outsourcing party.
This difference might be more important than you think. Hosted services give you more control over the environment, although someone else does the “dirty work” of the day-to-day maintenance. Moreover, when you do not have to share the outsourcing partners’ services, you will be first in line to get your integration requests met, whereas that is not the case with a multi-tenanted service provider.
Those wait times can have a negative influence on your SLAs with trading partners. You do not want to lose a contract because your outsourcing partner could not fulfill your integration request in a timely fashion.
What Internal Processes Do You Have in Place?
There is a misconception about outsourcing EDI solutions; the outsourcing partner will not maintain your data for you. Someone on your team must be responsible for that. The question becomes, who will that be?
More to the point, what internal processes do you have in place if you are going to outsource? Have you asked who will be responsible for which tasks, and what deadlines should be maintained to ensure SLAs are met?
In addition, think about who the customer-facing person will be. Will it be the internal point-person, or will it be someone from the outsourcing company? Answering these questions now will make the outsourcing process go more smoothly.
Experience and Longevity Matter
You want to choose an EDI provider with experience in your industry and with a strong track record of stability. Different industries have different EDI requirements. Some EDI providers specialize in these industries and are experts on the specific regulatory obligations their clients have to meet. If you are in an industry with such requirements, you need a specialized EDI service provider; if you are not in a niche, you may be better off choosing a provider with broader experience.
When you choose an EDI service provider, you want assurance that the company is stable and has a future, and that the provider will work with you to implement solutions that will serve you well into the future.
One of the best ways to research this is to talk to the provider’s long-term customers. The more loyal clients the provider has, the higher the chances are that your provider is not suddenly going to disappear.
Additionally, you should look for an EDI provider that will enable you to stay agile and competitive far into the future. Technology is changing rapidly. You do not want to be saddled with an EDI system that creates barriers to business down the road. While no one can predict what is to come, the right EDI service provider has a keen grasp of what solutions are flexible and adaptable.
You will know you have chosen well when your EDI provider presents a system that meets your current and future needs as well as your budget requirements. Are you ready to investigate your EDI capabilities and see what can be done to enhance them?
How you can Benefit from EDI Outsourcing
There are a few main benefits to outsourcing your EDI services. These are:
- Simplified operations
- Shorter implementation time
- Better partnership management
- More focus on your company
Simplified Operations:Simplifying the workings of your business means that everything runs more smoothly -- including service to customers, the lifeblood of your company. With a qualified third party handling your EDI needs, you can provide faster customer support, better meet expanding and ever-developing customer technology needs, and upscale your infrastructure to handle increased sales volumes.
Shorter Implementation Time:An experienced third-party EDI services provider will take care of everything for you, so you'll be up and running much sooner than you would have been with in-house EDI. Technology can be burdensome for smaller companies; outsourcing a highly technical portion of the business to a knowledgeable provider allows you to pass on those complexities -- and know they'll be handled ably.
Better Partnership Management: Using an outsourced EDI service provider means you're engaging real expertise that can respond to your trading partners on your behalf. This streamlines those partner relationships, making your entire business run more smoothly.
More Focus on Your Company:You probably didn't go into business to manage your own EDI integration. Outsourcing manages it all for you so that you can get back to focusing on what will make you a continued success: work that increases revenue and profits.
EDI Outsourcing FAQs
Can you outsource EDI?
You can absolutely outsource your EDI needs, and many businesses do. While having an in-house EDI service offers its own set of benefits, outsourcing means you don't need to hire dedicated staff or consultants. It means you don't need to purchase, install or configure required software and software, or translate and map data, among numerous other tasks.
What is an EDI provider?
An EDI provider is a company that offers EDI services and/or software. Though they tend to focus on specific segments of the market, all EDI providers help businesses transfer standardized data to and from their trading partners, including customers, manufacturers, and e-commerce sites.
What is EDI managed services?
Think of EDI managed services as a set of outsourcing tools for your current EDI program. With EDI managed services, your business owns or rents its B2B integration solution, and a service provider operates the solution for you. Offerings span from architecture solutions to testing, data mapping, and more.
