SaaS EDI: Everything You Need to Know
SaaS EDI brings all the benefits of EDI delivered via the cloud. For some businesses, it provides a more flexible, less demanding, and less expensive way to use EDI than more traditional on-prem alternatives.
Integrating SaaS EDI with ERP and your other mission-critical applications is easy, enabling you to move data and documents seamlessly across your business and broader supply chain. This connectedness makes you more agile and easier to do business with than your competitors.
Read this article for everything you need to know about SaaS EDI. And to find out if it’s the right option for you.
What Is EDI?
EDI–Electonic Data Interchange–is a set of standards defining how two companies working together (“trading partners”) should share information.
Back in the day, this “information”–an invoice, purchase order, shipping notification, or healthcare claim–was printed onto paper and sent by mail. When the document arrived (assuming it didn’t go missing along the way!), the recipient manually keyed the information into their internal systems. But this was expensive, inefficient, and unreliable–hence EDI was born.
EDI eliminates the need for such unpredictable, manual processes, saving trading partners vast amounts of time. It defines how data should be formatted, keeping entire industries on the same page. And it automates data flow electronically, guaranteeing safe dispatch and receipt.
The Benefits of EDI
- Lower costs: You can save money on printing and paper, but the most significant savings are time-based. Employees are liberated from the most time-consuming, laborious tasks to focus on higher-value work.
- Fewer Errors: Data sent via EDI is never touched by a human hand, which means no fat-fingering and costly downstream consequences.
- Increased Efficiency: Trading partners can collaborate at breakneck speed when the documents they need to forge ahead are created, sent, and received in seconds instead of hours.
- Greater Security: Sending documents by mail–or even by email–is insecure. They can be intercepted or fall into the wrong hands. EDI can encrypt data before it’s exchanged, which is why HIPAA, the U.S. Federal health insurance law of 1996, encourages the widespread use of EDI in the healthcare system.
- Greater Supply Chain Visibility: Information transmitted via EDI can be tracked all the way along the supply chain, enhancing visibility and accountability. Management can spot potential inefficiencies and collaborate more effectively with their trading partners.
- Better Data Management: EDI data is digital, which means it can be searched, mined, scraped, and analyzed for continuous improvement.
What Is SaaS EDI?
What Is SaaS?
SaaS–software as a service–is a new(ish) way for businesses to access and pay for software. Rather than “owning” the software themselves, companies subscribe to software and applications developed by third-party vendors and access them in the cloud.
The alternative to SaaS is “on-premise” or “on-prem,” which is software that you pay for and own. On-prem software doesn’t live in the cloud. It lives–or rather is stored–on a server, which companies usually keep in their office.
As outlined in the benefits below, SaaS is, in many ways, a better way to use software. It’s less onerous, more flexible, and (all things considered) less expensive. It’s no surprise, therefore, that the global SaaS market is growing massively. It’s expected to jump from $130.69 billion in 2021 to $716.52 billion in 2028 (at a CAGR of 27.5%.)
The Benefits of SaaS EDI
SaaS EDI is generally faster to implement than on-prem, so you can quickly benefit from the time and cost savings.
Integrating SaaS EDI with your back-end systems, such as your ERP system, still takes time (don’t trust any vendor that says otherwise!) But most companies experience rapid ROI and are up and running faster than they expect.
Subscription Vs. Upfront Costs
Unlike on-prem software, which companies usually pay for upfront, SaaS solutions are available on a subscription basis. You pay to use the software monthly, which suits many small and medium companies better.
One thing you don’t have to worry about with 1 EDI Source is being “tied in.” Whether you’re an on-prem or SaaS customer, you own your maps. If you decide to switch vendors, you can take your maps with you, which isn’t always the case with our competitors.
Lower Total Cost of Ownership
With SaaS EDI, you don’t “own” the software–you effectively “rent” it, paying monthly for use. The vendor accepts full responsibility for the smooth running of the solution, which includes time-consuming bug fixes, updates, and upgrades.
Shifting the maintenance burden to the vendor reduces pressure on your IT team and means you don’t have to pay for expensive third-party support. You get all the new features that come down the pike automatically, keeping you one step ahead of the competition.
With SaaS EDI, you can scale freely, accessing additional resources at the touch of a button. Performance isn’t affected by high-pressure events like traffic spikes, and you don’t have to worry about outgrowing your solution. On the other hand, If things suddenly go south and your business contracts, you can drop down to a less expensive package, reducing your costs.
SaaS EDI is delivered via the cloud. It’s accessible not from your desktop but in your browser. The untethered nature of cloud-based software means your employees can access your system anytime, from any location, and often from any device, giving you the flexibility required to adapt to remote and hybrid work models.
Cloud-based systems integrate via APIs (application programming interfaces), which enable two applications, like EDI and ERP, to “talk to each other” seamlessly. With APIs, it’s easier to design stable integrated systems for end-to-end automation. You can add and remove additional SaaS solutions easily without threatening the stability of your IT ecosystem.
EDI + Cloud = SaaS EDI
With SaaS EDI, companies can leverage all the benefits of EDI and the cloud in one piece of software. The cloud delivery element compounds the speed, efficiency, and visibility improvements any type of EDI solution provides. Throw lower costs, maintenance, and time-to-benefit into the mix, and SaaS EDI becomes an attractive choice for many businesses.
If you’ve any questions about this article or want to discuss SaaS EDI further, reach out to one of our experts at 1 EDI Source.
6 Enormous Benefits of Supplier Integration
In this world of complicated supply chains and skyrocketing customer expectations, companies that are siloed from their trading partners struggle to compete. They experience inefficiencies, unnecessary costs, and lower customer satisfaction because they can’t get products out to customers fast enough.
These companies will benefit massively from supplier integration, a strategy for uniting their entire value chain via a seamless flow of data. Once connected, suppliers and sellers can start communicating and collaborating effectively, working together to increase efficiency and customer experiences.
If supplier integration isn’t a top priority for your business–it should be–and this article explains why. We explore the six key benefits of supplier integration and the most accessible and impactful technology you can use to experience them.
Read on to find out more about:
- Collaboration and communication
- Agility and Flexibility
- Sending and receiving a PO the old-fashioned way (without EDI)
- Sending and receiving a PO the modern way with EDI
Why Supplier Integration Is a Strategic Imperative
The speed of business is accelerating every day. Today’s customers are used to buying from Amazon and, rightly or wrongly, have come to expect rapid, seamless delivery of goods, whatever it is they’re buying.
A complicated, siloed supply chain with hundreds of suppliers, all pulling in different directions, makes meeting today’s customer expectations impossible. If you want to dominate your industry and reach your profit goals, you need a tightly integrated supply chain connected via a seamless flow of data. In short: you need supplier integration.
Supplier integration leads to improved overall performance and a seamless customer experience—efficiency, productivity, and profitability all increase. You can pass cost savings on to your customers or reinvest them back into your business. Either way, you can rest assured your customers will get their products on time, every time.
Here are six of the biggest benefits of supplier integration.
Supplier operational integration unites management, suppliers, and customers around a single source of truth for data. Partners’ systems talk to each other (push and pull data in real-time), which keeps everybody in sync. Fewer conflicts, stronger relationships, and improved collaboration all serve to improve the customer experience, driving satisfaction and retention.
A single source of truth gives management total visibility across the entire value chain. From this elevated viewpoint, management can spot potential points of failure and operational inefficiencies. As fuel prices, raw materials, human resources, and warehousing costs continue to rise, the ability to pinpoint unnecessary expenses quickly can provide substantial savings.
Fragmented supply chains are inflexible, but integrated supply chains are agile. They enable businesses to react at lightning speed to fluctuating demand, shifting safety and compliance standards, competitor behavior, and other changes in the marketplace.
To consistently meet customer demand, B2Bs are adopting new sales channels that were traditionally reserved for B2C, such as D2C, B2B e-commerce, and even Amazon. But each additional sales channel adds another layer of complexity to a convoluted supply chain. A connected and cohesive supply chain allows you to embrace new channels without destabilizing your ability to provide outstanding customer service.
Supplier operational integration provides the efficiency and visibility you need to reduce carbon emissions. A smoother flow of business processes means fewer part loads, refused deliveries, returns, and poorly optimized routes. You can significantly reduce your carbon footprint in line with customer, employee, and regulatory demands.
Automation is the key to greater efficiency and productivity, improved workplace safety, and dramatically reduced costs. With automation, you can free employees from the boredom of repetitive work and redirect them to higher-value activities.
With self-driving vehicles and other technologies on the horizon, the dream of fully automated end-to-end supply chains (with zero human involvement) could be closer than you think. Document generation, fulfillment, and warehouse management can all be automated already. But this level of automation is only possible when your people, processes, systems, and suppliers are integrated.
EDI–Electronic Data Interchange–is a means of sharing information between businesses in a structured digital format. It emerged in the 60s, was formalized in the 70s, and is now the go-to standard for B2B exchanges.
EDI is the optimal solution to integrating your systems with your most important suppliers. Instead of transmitting and receiving information manually using pen and paper, EDI shares data electronically and instantaneously without human input.
By automating data exchange, you not only save money on postage and couriers, but you also eliminate costly mistakes and miscommunication. Lines of communication are always open, keeping suppliers and sellers in sync at all times.
There are three main reasons why EDI should be your first choice for supplier integration.
EDI is a highly efficient system for sharing information. Developed at a time when sending data was expensive, it relies on smashing lengthy documents down into a few short lines of “code.” These documents can be created, transmitted, and stored with ease.
EDI uses industry-accepted standards. It provides a common “language” for interacting with suppliers. You never have to worry about sending documents in the wrong format or layout. Compliance is guaranteed.
As your business grows and you start transacting with larger companies, EDI turns from a nice-to-have into a requirement. Big players like Amazon and Walmart won’t do business with any company not using EDI.
EDI is the industry-standard method of information exchange across a broad range of industries, from healthcare to distribution, manufacturing, logistics, and business services.
For the below example, however, we’re going to focus on the retail industry, specifically how trading partners can exchange one of the most common business documents–a purchase order.
The below process generally takes several days:
Step 1: The buyer peruses the suppliers’ offering and decides what they want to purchase.
Step 2: The buyer manually creates a PO–probably in Excel–and emails or mails it to the supplier.
Step 3: The supplier receives the purchase order and manually keys the information into their internal system. If everything goes according to plan, they send the buyer an acknowledgment of the order.
The above process sounds straightforward enough, but it’s full of inefficiencies and unknowns. Creating POs and manually keying information into systems is slow, labor-intensive, and prone to error. Sending letters in the mail is slow and unreliable. And emails can be missing attachments, sent to the wrong person, or go to Spam.
Fortunately, there’s a better way to transmit business documents.
The below process generally takes minutes.
Step 1: Same as above.
Step 2: EDI software automatically generates an electronic PO and transmits it to the supplier’s order entry system.
Step 3: The order entry system receives the PO and transmits an acknowledgment back to the buyer’s EDI solution.
With EDI, there’s no risk of manual error, delays, or back and forth. Transmission and system updates happen automatically, ensuring speed and alignment. The recipient is never sick or on annual leave–EDI is always on.
Supplier integration gives you a substantial competitive advantage in a world where supply chain complexity is getting ridiculous. If you want to increase efficiency, sustainability, agility, and visibility, all while reducing costs (who doesn’t), then supplier integration is the answer.
There are multiple ways to integrate your systems with your mission-critical trading partners. But one of the most accessible and impactful ways is EDI. Contact one of our EDI experts to start communicating and collaborating more effectively with your suppliers.