Is Online EDI the Future of Order Management?

The advent of web based or online EDI is greatly improved the future prospects of the retail and wholesale order management market.  There are several reasons for this, so let’s take a look at them.  But also for discussion is whether online EDI has any limitations which still need to be addressed.

What Online EDI Achieves

Let’s just define it first, online EDI, or web EDI as its also called is exchange of data electronically via a web based application.  As opposed to Internet-based EDI, its predecessor, which used internet based protocols to send data between software sat on a company’s own servers.  Like a lot of software now, EDI has gone SAAS, due to cloud services, it is now possible to run software that is installed on a cloud via a web browser or an app on a device.  Historically we were dependent on local area networks where a company would have a server room with software installed on that server and on any computers connected to that server.  The data would be stored on the server.  Internet EDI sent data from the server using internet protocols to a customer’s or supplier’s server which then translated that data into an order and so on.

With online EDI the availability of access to the order data is opened up to multiple types of devices, from laptops to tablets, and smart phones.  As long as an app can be downloaded, or an internet browser accessed the software can be opened up and used.

The other factor with online EDI is that it has opened up the opportunity for smaller suppliers to now engage with larger customers.  Compliance with EDI requirements was once a large barrier for entry into the large supermarkets for small suppliers, because the investment in EDI software and hardware to host it was a large outlay at a time when cash flow would also be tested.  But with web EDI the costs are spread monthly so that a supplier can quickly and cost effectively adopt EDI and comply straight away with a larger customer’s requirements.

Linked to this is the fact that the web EDI software suppliers have the capabilities and interests in keeping the software as up to date as possible to ensure that every EDI connection is possible with other systems, and that integration with ERPs, accounting software and other systems are as slick and as up to date as possible.

Limitations of Online EDI

Some larger companies stick with Internet EDI because Online EDI does have its limitations.  Due to packeting of data the web EDI software providers save money, but in doing so cause delays in sending of data, so if you have a phone conversation with a  customer about an order it may be an hour or more before you’re both seeing the same data.

Another factor is that while entry cost for Web EDI is low, ongoing costs can easily escalate as data usage increases, which may warrant looking at internet EDI as a cheaper long term alternative.

Ramone

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