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What Is Modern EDI? (Top 6 Features)

The EDI market is crowded with numerous providers, each claiming to offer the most advanced, feature-rich, and cutting-edge platform. This abundance of choices can make it challenging for businesses to discern what truly constitutes modern EDI.

May 08, 2024

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Electronic Data Interchange (EDI) has been the backbone of B2B interactions for decades, enabling companies to streamline processes and build strong trading partner relationships.

However, as the digital landscape evolves and business requirements become more complex, traditional EDI systems are struggling to keep up, prompting the need for modernization.

To help businesses stay competitive in this rapidly changing environment, EDI has undergone a transformation to revolutionize how companies connect, collaborate, and thrive in the digital age. With seamless ERP integration, enhanced functionality, and user-friendly design, modern EDI systems empower businesses to take their efficiency to the next level.

The EDI market is crowded with numerous providers, each claiming to offer the most advanced, feature-rich, and cutting-edge platform. This abundance of choices can make it challenging for businesses to discern what truly constitutes modern EDI.

In this article, we dig into the heart of this question, exploring how the latest advancements in EDI technology are revolutionizing the way companies exchange data and interact with their trading partners. We'll examine the key features and benefits of modern EDI systems and provide insights to help you make informed decisions about your business's EDI strategy.


What Is Modern EDI?

Modern EDI is an evolved form of the Electronic Data Interchange technology we’ve had since the 1960s and 1970s. It offers flexible deployment options, seamless integration with core systems like ERP and WMS, and user-friendly interfaces that enable smaller companies to manage more EDI processes in-house.


The Key Features of Modern EDI

So, what sets modern EDI apart and makes it a strategic investment for businesses looking to take their B2B transaction workflows to the next level?

Let's discuss six key features defining the future of B2B data exchange. If your EDI platform lacks these capabilities, it could be time to reevaluate your options and future-proof your operations.

1. Cloud-Based Architecture

The shift to cloud-based EDI solutions is arguably the most transformative development in modern EDI. Business cloud spending, in general, has rocketed over the last decade and continues to climb at a CAGR of around 15%.

Cloud EDI (where the software is hosted and run on remote servers (the cloud) rather than on your own on-premises hardware) offers numerous advantages over traditional on-premises deployments, from security to scalability and low-maintenance workflows that require very little in-house work to keep in shape. Here’s what it offers:

  • Scalability: With a cloud-based solution, you can quickly and easily adjust your EDI systems without substantial upfront costs and complexities associated with scaling on-premises infrastructure.
  • Access: Authorized users can securely access EDI systems from any internet-connected device anytime, anywhere in the world. This helps businesses take advantage of remote work and expand strategically across multiple sites without saddling themselves with local deployments.
  • Security: Leading providers such as 1 EDI Source invest in end-to-end encryption, multi-factor authentication, and 24/7 monitoring to ensure their platforms are always up-to-date with the latest features, performance enhancements, and compliance standards.

In short, cloud EDI has become the new standard, growing into a multi-billion industry in its own right. It makes EDI simpler and more accessible while cutting the costs and maintenance burden associated with on-premises alternatives.


2. Robust Analytics and Reporting

Data visibility is power for those operating in modern supply chains.

According to data overviewed by Forbes, organizations that leverage data effectively are 23 times more successful in acquiring new customers, nearly 19 times more likely to achieve sustained profitability, and almost seven times more effective in ensuring customer retention.

The best modern EDI platforms are equipped with analytics and reporting tools that provide insights into the inner workings of your B2B transactions. This equips you with the data infrastructure required to:

  • Track KPIs: By tapping into the goldmine of data flowing through your EDI systems, you can truly understand your operations and make informed decisions to optimize performance. EDI analytics tools allow you to track key performance indicators (KPIs), such as order processing times, fulfillment rates, and invoice accuracy.
  • Spot Patterns: Advanced EDI analytics also empower you to spot trends and patterns that might go unnoticed. For example, by analyzing historical transaction data, you can uncover valuable insights, such as seasonal demand fluctuations or shifts in customer ordering behavior.
  • Predictive Analytics: Predictive analytics is an exciting frontier in modern EDI. By applying machine learning algorithms to your EDI data, you can generate powerful predictive insights, such as forecasting future demand or identifying trading partners at risk of churn.

1 EDI Source customer John Mitterko, Vice President of Information Technology at World and Main, captured the usefulness of EDI analytics when he told us:


"We've started delving into POS data from our customers so that we can do reordering. Just to be able to accumulate that data is a win in itself because now we can see what we sold at the customer level, where it's being sold and how much…we can do sales projections and other things we just didn't have access to before, and we can mine that data for valuable insights."


3. Seamless API Integration

Gone are the days when EDI systems existed in isolation, cut off from the rest of your business technology ecosystem.

The best EDI platforms leverage the power of APIs (Application Programming Interfaces) to break down your data silos and enable fluid communication between your EDI and other critical business systems. API integration solves the following:

  • Integration: By integrating EDI with your ERP (Enterprise Resource Planning), CRM (Customer Relationship Management), WMS (Warehouse Management Systems), and other key applications, you can create a cohesive, connected business ecosystem.
  • Automation: API-driven EDI integration opens a world of automation possibilities for your business. For example, when an EDI 850 Purchase Order is received, it can automatically trigger a cascade of actions across your integrated systems.
  • Supply Chain Efficiency: EDI integration also supercharges your supply chain visibility. By connecting EDI with your other business systems, you gain end-to-end traceability of your orders, from initial placement to final delivery and invoicing––a single source of truth.

1 EDI Source offers seamless, out-of-the-box integration with a wide range of leading ERP systems, including Epicor, Infor, Microsoft Dynamics, NetSuite, Oracle, Sage, and SAP.


4. User-Friendly Interfaces

Historically, EDI has been viewed as a complex and technical domain requiring specialized knowledge and expensive IT resources to implement and operate.

Modern EDI platforms challenge this perception with user-friendly interfaces that make EDI accessible to a broader range of users.

The number of true EDI professionals has dwindled hugely in recent years, often leaving businesses with a talent vacuum they struggle to fill. The solution lies in adopting intuitive, modern platforms and, for some companies, engaging in managed solutions where EDI is outsourced to the EDI provider.

Some key features of modern EDI user interfaces include:

  • Intuitive Design: Modern EDI platforms offer clean, intuitive interfaces using familiar web-based navigation. This reduces the learning curve and makes it easier to operate EDI workflows without extensive training.
  • Visual Workflows: Many modern EDI systems provide visual tools for designing and managing EDI workflows, such as drag-and-drop mapping and flowcharting. These tools allow your business users to understand and optimize your EDI processes without writing complex code.
  • Customizable Dashboards: Modern EDI platforms provide you with customizable dashboards that allow your users to view key metrics, alerts, and tasks relevant to their specific roles or departments. This puts actionable information at your users' fingertips.

Danielle Finch, Compliance Coordinator from 1 EDI Source customer Adidas, summed up these impacts perfectly:


“We’re skipping the whole step of waiting for the EDI team to come back to us to supply information on a transaction…Now we can just pull it up ourselves in IntelligentXchange and do what we need to do. I love it. I’ve had my coworkers use it a couple times with me, and they love it too.”


5. Extensive Automation

It’s estimated that automation could increase global labor productivity by up to 3.4% through 2024.

Attitudes towards automation in the workplace have changed, with studies showing that employees want their employers to handle certain workloads with minimal manual input.

Automation is a key driver of efficiency in modern EDI. By automating routine tasks and decision-making, you can reduce manual effort, minimize errors, and accelerate transaction processing. This benefits both the business and its employees.

Some examples of automation in modern EDI include:

  • Document Processing: EDI systems can automatically parse and validate your incoming documents, such as purchase orders or invoices, based on predefined business rules. This reduces the need for manual data entry and ensures that only accurate, compliant documents enter your system.
  • Workflow Triggers: Modern EDI platforms can automatically trigger actions based on specific events or conditions. For example, when your business receives an advance ship notice (ASN), the system can automatically update your inventory records and trigger a goods receipt process in your WMS.
  • Automation Validation: Automating validations involves detecting an error or discrepancy in your transactions, such as a missing data field or a price mismatch. This helps address problems and ensures automated processes flow without error.

At 1 EDI Source, we consistently see the time and cost savings businesses can achieve through EDI automation. Tom Cin Metals, for instance, previously dedicated an entire day each week to order processing and scheduling. After implementing HQXchange, this task and others were completed in just half a day. In the first year alone, the company saved $70,800 and reduced employee overtime by 80%.


6. Comprehensive Managed Services

For many companies, especially those with limited in-house EDI expertise, managing the complexities of EDI is an ongoing challenge.

We’ve already touched on the impacts of lacking expertise and clunky on-premises setups built for what is fast becoming a bygone era.

This is where managed EDI services come into play. With a managed EDI model, you can outsource your EDI systems' day-to-day operation and maintenance to a third-party provider like 1 EDI Source.

Some primary benefits of managed EDI services include:

  • Expertise: Managed EDI providers have deep expertise in EDI technologies, standards, and best practices. They can provide guidance and support to help you optimize your EDI operations and comply with your trading partners' requirements.
  • Scalability: Managed EDI services can scale up or down based on changing transaction volumes and business needs. This provides flexibility and helps you avoid the fixed costs of in-house EDI staffing.
  • Proactive Monitoring: Managed EDI providers use sophisticated monitoring tools to proactively identify and resolve issues before they impact your business operations.

1 EDI Source offers a cutting-edge managed EDI service through our EDI ManagedXchange (MX) platform. We handle all aspects of your EDI exchange and ensure compliance with trading partner requirements, allowing you to focus on your core competencies.


Summing Up

Modern EDI represents a transformative change in how companies approach B2B data exchange.

However, the transition to modern EDI is not without its challenges. Companies need to carefully assess their current systems and processes, define clear goals and requirements, and choose the right technology partners to support their journey.

This is where 1 EDI Source comes in. With our extensive trading partner network, industry-specific solutions, and flexible deployment options, we’re a leader in forward-thinking, modern EDI.

If your company is still relying on traditional or legacy EDI systems, now is the time to start exploring the potential of modern EDI. To learn more about how modern EDI can benefit your organization, reach out to one of our experienced EDI experts who can put you on the right track.