Four Fast-Growing EDI Trends Impacting Your Business
While new technologies continue to populate the landscape, EDI is entrenched as the preferred way to exchange B2B transaction documents. EDI is too integrated into daily business processes to be easily replaced and, frankly, why would it be replaced? EDI has been the standard for decades now, and in that time it has emerged as an essential tool for businesses across the globe. But that doesn’t mean it can’t be modernized, or improved.
These recent trends are impacting EDI and are important to keep in mind to ensure its continued value for your organization:
The IT Talent Shortage
The cloud continues to change the rules for EDI technology deployment, and cloud EDI is today’s most popular EDI solution. It only makes sense that more and more businesses are using cloud EDI, migrating their applications and data to the cloud, and as a result, reaping the benefits of speed and efficiency. But its complexity only increases the need for a solid IT department well versed in cloud EDI technology.
Unfortunately, despite the need, there isn’t an infinite number of qualified IT pros to go around. According to an article in Network World, in a report compiled in partnership with the London School of Economics, 71% of IT decision makers believe their organizations lose revenue due to a lack of cloud expertise, and that loss in revenue numbers in the hundreds of billions of dollars. The need for solid IT expertise, and EDI expertise, is apparent.
One option is to outsource IT, and businesses know that outsourcing has numerous advantages compared to hiring talent, including lower costs and more, reliable expertise. At Effective Data, we offer support in many different ways, either per project or on-going, to best match your organization and technical needs. But regardless of whether you have the resources to find, train and keep a team in-house, or rely on Effective Data to be that team, the need for qualified IT professionals will only continue to grow.
Integrating IoT, AI and Blockchain
While EDI is firmly established, emerging technologies such as IoT (the Internet of Things), blockchain-based networks and AI (Artificial Intelligence) solve challenges, especially supply-chain challenges. The combination of these technologies and processes within the EDI environment will enable companies to conduct business process integration quickly and with increased agility. Some refer to this explosion of technology as “modern EDI,” a term that refers to the increased diversity of partner, application, and interfaces available in business environments today.
In the case of IoT, AI and blockchain, these technologies add a great deal of flexibility and advanced capabilities to EDI. EDI will continue to provide the basic core electronic document exchange framework but blockchain technology (which has been in the news quite a bit recently due to its direct relationship with Bitcoin technology) can build trust and certainty by enabling the sharing of a secure and tamper-proof ledger of transactions between business partners and vendors. IoT can boost the sophistication and degree of real-time information and data generation, leading to reporting shortcuts and time-saving, such as using handheld scanners that immediately record and report shipping damage. And AI introduces a wide range of automation and reporting tools to add new depth and analysis.
It’s been estimated that blockchain alone could save the global shipping industry billions of dollars a year. Incorporating this and other fast-growing technologies can pay large dividends down the road.
The Growth of Ecommerce
Ecommerce is everywhere, and growth continues to be massive. The Amazon effect, which refers to the ongoing evolution and disruption of the retail market from increased ecommerce has been well-documented. In 2016, online sales of physical goods was $360 billion in U.S. dollars, and is projected to surpass $600 billion U.S. dollars in 2021. In the U.S., Internet sales account for around 10% of all retail sales. That actually lags behind a number of other countries including China, where online sales accounts for a fifth of all retail. In other words—there is ample room for ecommerce to grow.
The growth of Internet purchases far outpace the sales in traditional brick-and-mortars. And without the costs of retail space, on-floor sales people and more, profit margins can tend to be generous. But this new way of doing business also opens the door to new challenges revolving around the increased complexity of data, logistics and the dependency on transaction technology. This only highlights the importance of EDI to control the supply chain, inventory and retail data.
ERP (Enterprise Resource Planning) is as vital to companies as EDI, but ERP and EDI must work together seamlessly. When they do, organizations can conduct business with greater flexibility and reliability. By connecting ERP and EDI, you avoid manually entering data twice—always a recipe for mistakes—and can take advantage of more robust analytics.
ERP cloud migration can be complex, costly and risky if done without a guiding strategy. But that doesn’t mean you shouldn’t migrate or integrate. According to an article from erpsoftwareblog.com, “EDI has the potential to add significant business value when EDI is integrated with your ERP system. When these two key systems are in sync, companies get even greater supply chain visibility and a host of related benefits. For example, integrating EDI with ERP can help you process orders faster, reduce lead time, accelerate the orders-to-cash cycle, and facilitate on-boarding new EDI-enabled customers.
These capabilities will also lead to more efficient and improved customer service, which in itself can boost revenues.
Effective Data helps you modernize EDI Effectively
EDI is an important part of your business—so maximize its effectiveness, adapt to changing needs, react to new opportunities, and make sure you’re using EDI to its greatest potential. To take advantage of the latest trends, turn to Effective Data. After all, great business and effective EDI isn’t trendy—it’s mandatory.
For help in modernizing your EDI, contact us.