Why ERP and EDI Belong Together

Posted by Brooke Lester on Mar 23, 2022 2:35 PM


EDI systems and ERP solutions are essential for any business that relies on a properly functioning supply chain. EDI handles communication with trading partners on the front end, while the ERP system manages records on the back end.

EDI integration can be challenging, especially if your supply chain involves several different players and numerous moving parts. When done correctly, it can give you a significant boost in visibility and efficiency. However, when improperly configured, integration becomes a mesh of custom integrations that create more problems than it solves.

Optimal integration requires EDI and ERP systems to be deployed together. An EDI solution essentially retrieves files from the ERP, translates them, and shares them with the respective partners. Therefore, upgrading one without the other can be a recipe for disaster.

In today's article, we unravel how implementing EDI and ERP together maximizes their value. But first, let's first understand the critical individual roles of EDI and ERP in modern-day enterprises.

What is EDI?

A primary focus for any business is the ability to seamlessly exchange data within and beyond its walls. Electronic Data Interchange (EDI) facilitates this exchange by converting business documents into standard electronic formats shared among different data systems.

EDI enables enterprises to move from paper-based to digital document exchanges, reducing processing costs, increasing transaction speeds, minimizing errors, and improving partner relationships.

What is ERP?

Enterprise Resource Planning (ERP) is a system used by companies to integrate and manage the critical parts of their businesses. A comprehensive ERP solution integrates functions like planning, purchasing, production, sales, marketing, finance, and human resources onto one platform, enabling the different departments to share information seamlessly.

ERP delivers value by creating a single point of truth for the entire organization, eliminating costly duplicates and incompatible technology.

The Value of ERP and EDI Integration

EDI and ERP integration has long been done independently, with each software solution handling its respective business processes. To establish communication between EDI and ERP systems, enterprises would either manually feed EDI data into the ERP or haphazardly create custom integrations.

Thanks to technology advancements, EDI solutions can integrate with ERP systems to automate the exchange of information between the backend and the front-end applications.

EDI-ERP integration enables data to flow autonomously from one end to another. By implementing EDI and ERP together, your enterprise can enjoy:

  • Improved data accuracy by eliminating manual data entry
  • Faster transactions by automating data transfers between ERP and EDI
  • Enhanced supply chain visibility by enabling you to focus on your trading partners instead of trouble-shooting errors.

Not All EDI Integrations Are the Same

When undergoing an EDI migration, a critical decision is whether to use your existing ERP system for EDI or implement a separate application. However, while choosing a bundled solution may seem like the best way to go, most companies that choose a combined ERP-EDI solution end up disappointed down the road.

Deploying EDI with the patched-on functionalities offered by ERPs like Oracle and IQMS can expose your business to significant risk. Below are three compelling reasons why EDI integration must be implemented with a standalone EDI platform.

  • Greater Flexibility

A top benefit of separating EDI and ERP systems is the ability to execute infrastructure changes faster. ERP providers that offer EDI add-ons focus more on improving their primary product's capabilities, such as inventory management and order processing, than refining front-end EDI functionalities.

Prioritizing ERP often comes at the cost of deploying critical EDI features. Consequently, ERP providers tend to take much longer to deploy changes in partner connections than specialized EDI vendors.

EDI systems with new-age EDI mapping tools and intuitive designs make trading partner onboarding and changes more efficient. They offer streamlined updates to custom integration codes and a faster turnaround of change requests, increasing revenue and reducing operating costs.

Furthermore, unlike ERP vendors, EDI providers come with the experience of integrating numerous trading partners and pre-packaged maps for quick deployment.

  • Superior Functionality

Choosing ERP-based EDI can dramatically minimize the effectiveness of your EDI integration. Because ERP systems are designed as data repositories and have limited data sharing capabilities, an ERP with EDI capabilities can reduce your ability to respond quickly to new customer requirements and standards. More often than not, enhancing functionality requires creating custom code outside the EDI component.

Modern standalone EDI platforms offer visibility layers that a bundled ERP-EDI solution cannot match. Market-leading EDI providers develop solutions specifically designed to deliver real-time status updates, timely error resolution, and accurate process tracking. That way, you can perform EDI alterations within a single proper platform.

  • Reliable Integration Beyond ERP

Although the ERP handles most external enterprise data, you probably also have other applications requiring EDI integration, such as CRM, TMS, WMS, or even eCommerce solutions.

Implementing the EDI infrastructure necessary to create connections beyond your ERP can be an extensive project, requiring in-depth EDI and API knowledge. Unlike standalone EDI solutions, most ERPs with EDI add-ons do not offer "out of the box" connectors or the expertise to build custom integrations.

Therefore, if your supply chain involves many different partners with varied applications, you are better off with a dedicated EDI integration platform than an ERP with EDI tools.

Let REMEDI help you implement a standalone ERP compatible EDI integration

ERP-EDI integration is best done by allowing both solutions to perform their intended functions while communicating seamlessly. The best EDI technologies offer capabilities and expertise that far outmatch ERPs with simple EDI tools.

EDI is integral to supply chain integration. Therefore, a modern enterprise needs a robust EDI solution that works seamlessly with its ERP and other backend systems to deliver all its intended integration functions.

As the leading provider of EDI expertise, REMEDI can help you deploy the ideal EDI integration and streamline communication with your trading partners. Our experienced EDI experts will help you automate your EDI processes without the pain points of ERP-based EDI tools.

Contact REMEDI today, and let's help you implement a modern EDI solution for greater supply chain visibility and efficiency.

Are You Ready to integrate?Make the business case to management for preparing your integration infrastructure.