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How to Select the Right EDI Software for Your Business

If you’re new to EDI or looking to upgrade to a more robust system, this article is for you. We’ll take a deep dive into how EDI works and the benefits of using a cutting-edge solution. We’ll also explore the different types of EDI available and provide a list of key questions to ask when evaluating EDI vendors.

January 31, 2023


Whether you’re just starting out or looking to improve your current setup, this article will give you the information you need to make an informed choice.

Let’s get into it!

What Is an EDI Solution?

EDI (Electronic Data Interchange) software allows businesses to efficiently and securely exchange important documents such as invoices, purchase orders, and shipping notices electronically. The software standardizes and automates the process, providing a faster and more reliable alternative to traditional mail and email. As a result, many large companies, such as Amazon and Walmart, require their trading partners to use EDI-compliant systems.

The Five Core Components of EDI

EDI can transform your company by streamlining data transmission and automating business processes, making your company more agile, efficient, and a pleasure to do business with. But how exactly does EDI work? Good question. Below are the five core components. Keep these top of mind when evaluating EDI options.

1.   Flexible Communication

Each potential trading partner will have their own approved method of communication. These methods vary from secure FTP to AS2 communication protocols and private Value Added Networks. Make sure your EDI solution is flexible enough to meet any communication requirement today and in the future.

2.   Automatic Translation

Your EDI solution should be able to validate and process received documents according to industry standards without requiring manual intervention. This includes the capability to check for compliance and send Functional Acknowledgements (FAs) as digital receipts.

3.    Straightforward Data Management

Maintaining consistent data exchange with trading partners requires ongoing management and attention. But, with the right EDI solution, this management should be simplified and streamlined. A user-friendly dashboard with built-in alerts is essential for efficient management. It enables you to monitor your EDI transactions easily and identify and resolve any issues that may arise quickly.

4.    Seamless Integration

To ensure seamless automation of your business processes, it’s important that your EDI solution is integrated with your Enterprise Resource Planning System (ERP), Warehouse Management System (WMS), Transportation Management System (TMS), and any other relevant software. A capable and experienced EDI partner can help you establish this integration, facilitating automated workflows and eliminating manual data entry.

5.    Flawless Mapping

Handling the constant flow of EDI data requires translating it into formats easily understood and utilized by your back-office systems. This process, known as mapping, is crucial. Many EDI providers offer mapping as a service, so it’s vital to look for this when evaluating EDI solutions and providers.

Why Invest In a State of the Art EDI System?

All EDI solutions are not created equal. Poor solutions are challenging to use, maintain, and scale. They’re prone to errors, have poor data security, and have patchy support. Best-of-breed EDI systems, like 1 EDI Source, are the opposite. With 1 EDI Source, you can expect the following benefits.

Greater Accuracy

Effortless integration of EDI and back-office systems eliminates manual data entry and reduces errors.

Low Maintenance Requirements

1 EDI Source runs by itself. It doesn’t require constant monitoring–only exceptional events trigger notifications. You can handle these quickly and get back to higher-value work.

EDI Consulting

The top EDI providers offer consultation for custom solutions. Our EDI specialists have 30 years of technical experience and can guide you through your EDI journey as trusted advisors.

An Easy Life for Accounting

Enjoy timely customer payments and eliminate pricing mismatches, fines, deductions, and chargebacks.

Accelerated Business Growth

Outdated systems and manual processes make your trading partners less efficient. A best-in-class EDI system improves customer efficiency, increasing satisfaction and loyalty.

Greater Productivity

Reduce manual data entry and human error to get more done with less.

Effortless Scalability

Handle large volumes of transactions, spikes in use, and dramatic long-term growth without flinching.

Outstanding Support and Training

Your EDI provider should have an impeccable track record for implementing, integrating, mapping, and driving the adoption of EDI solutions, ensuring a rapid return on investment.

Choosing the Right Type of EDI Solution For You

Finding the right EDI solution for your business can be challenging, as there’s no one-size-fits-all solution. However, this also means you can tailor a solution to your specific needs for the greatest impact. The decision can feel overwhelming with various options like on-premises, cloud-based, managed, unmanaged, or web-based solutions. But fear not. The brief explanations below will help put you on the right track.

On-Premise Vs. Cloud

On-premise EDI software is installed on your company’s servers, while cloud-based EDI software is stored on your EDI vendor’s servers.

Cloud-based software is frequently called Software-as-a-Service (SaaS) because you don’t have to manage or maintain the solution yourself. You effectively “rent” the software from the provider and access it on-demand over the internet. The vendor handles updates, upgrades, and bug fixes for you, saving time and money.

On-premises software, on the other hand, comes with a greater management burden. But, because your company “owns” the solution, you can customize it to your heart’s content and maintain total control.

Managed Vs. Unmanaged

With a managed EDI solution, everything from onboarding, data mapping, and ongoing monitoring and management of your EDI operations is done for you. You don’t have to lift a finger. With an unmanaged solution, you have to take care of it all yourself.

If you expect high document volumes, have a complex back-office system to integrate, or cannot manage EDI yourself, you should probably opt for a managed solution. Just make sure you can bring everything back in-house easily if you decide to do so in the future!

Web-Based EDI

Web-based EDI is a lightweight solution for companies that expect to exchange a limited number of documents (under 200/month) with less than five trading partners. These solutions can be implemented immediately without the need for back-office integration. EDI data from trading partners is displayed on easy-to-read web pages, and you can respond through a simple interface in your browser.

Is My EDI Vendor Legit? Crucial Questions to Ask

We recommend conducting thorough research on multiple EDI companies before making a decision. To aid in your evaluation, we suggest asking the following crucial questions when grilling vendors:

1.   Can I see a demo?

This one’s obvious, but you’ll want to see the EDI solution in action. Survey every step from setup to mapping and data management. Look for an intuitive, easy-to-read dashboard. Test how quick and easy it is to find information, create tailored views for different users and user groups, and design workflows.

2.   Show me how your solution deals with errors.

Errors cost money, damage relationships, and create additional work. Your EDI interface should display a live transaction status, provide alerts for every potential problem, offer search and repair functionality, and let you resend documents in seconds.

3.   Can I customize your solution to suit my needs?

You want a solution that’s flexible and responsive to your evolving business needs. Check that you can configure rules and settings without custom coding. This no-code functionality limits the total cost of ownership and avoids hidden fees!

4.   What are your solution’s security capabilities?

There’s no point asking, “Is your solution secure?” You know the answer is going to be “Yes!” Instead, delve into the specific capabilities. Find out if the database is encrypted and if user access can be restricted through role-based security.

In Summary

EDI makes exchanging documents with trading partners faster, more reliable, and more secure, stripping away manual work and human error. It keeps your business agile and efficient, giving you a competitive edge in the digital age. 

Investing in a state-of-the-art EDI system, like 1 EDI Source, can provide numerous benefits, such as greater accuracy, low maintenance requirements, rapid onboarding, hassle-free data management, and effortless scalability. Most importantly, you’re free to configure and customize your solution to the unique needs of your business.

To discover the benefits of our cutting-edge EDI solutions and find the perfect fit for you, speak to one of our experienced EDI experts. Let us put you on the path toward a more efficient and profitable future.