Keys to a successful EDI project implementation
EDI (Electronic Data Interchange) technology is a commonly used tool which is moving on from the B2G to B2B environment. However, in comparison with Europe and the USA, EDI is not as mature in private relationships in either Brazil or Latin America in general. As an international benchmark EDI and e-Invoicing technology provider, EDICOM has successfully implemented Global EDI projects for companies around the world.
The choice of tech provider is one of the critical aspects of rolling out an EDI project in a company, but the key to success starts with inhouse work in the corporation itself to lay the groundwork that can guarantee a sound and progressive system.
Aspects to consider before starting an EDI project
- Holistic view. A holistic view enables a company to overcome misgivings and see EDI as a competitive edge, a tool that is going to favor corporate efficiency. Understanding the long-term benefits for all of a company’s processes is necessary to better harness the possibilities afforded by EDI.
- Commitment from Management. Implementing EDI requires a change in business mentality. Implementation must stem from conviction, starting with Management, which must be able to provide the economic and human resources required.
- Involvement of all departments. EDI solutions affect different areas of a company: accounting, procurement, customer service, human resources, logistics, etc., and entail changing production processes and routines, necessitating a learning curve and breaking-in period.
- Analysis and evaluation of current management and business processes. EDI makes it possible to control and improve each of a company’s operating processes, streamlining them and making them efficient thanks to automation and error reduction. It’s important to know the starting point, i.e., the deficiencies and areas for improvement, in order to justify implementing the project and to subsequently assess its benefits. On this point it’s a good idea to quantify aspects such as the data volume exchanged, the time employees spend on tasks, and the error rate produced in these communications, among others.
- Identify areas of EDI application. There are numerous ways to apply EDI: invoice dispatch and receipt, purchase orders, inventories etc., as well as specific transactions depending on the needs of each sector (logistics, shipping, automotive, pharmaceuticals…). It is essential to know what type of commercial transactions the company needs to interchange via EDI without losing sight of the fact that one of the big advantages of EDI technology is its scalability. An EDI project can be implemented progressively, in line with the company's needs. To that end it’s important to establish goals and priorities to align EDI with the business plan. Analysis and evaluation, as well as the identification of areas of application, will be important in deciding what type of EDI suits the company most. To evaluate EDI application areas well, you need to consider partners and message types according to the manner of commercial relations.
- Know how many and with which customers or providers the company will exchange documents via EDI. The advantages and benefits of EDI grow when more partners are involved in the supply chain. EDI provides a competitive advantage over other companies that don't have it, and increasingly more large companies are making it a condition for their partners to work with EDI.It is also necessary to analyze the way the partner will be onboarded. Having a tech provider that delivers a full onboarding service will facilitate and simplify this work for the company.
- Identify what type of messages the company needs to exchange with its partners. Within each work area it’s important to analyze the types of messages that can be migrated to the EDI system, according to the relationship with customers and providers. EDICOM has created the Partner Testing and Certification Portal, an online platform where it is the users themselves who validate and verify the EDI messages to exchange. Through this portal, companies and their partners can start to work together in the short term and with the guarantee of complying with all the requirements established in the business relationship.
- Form a work team to head up the process. As with any project you want to undertake, you need to appoint the people to lead it. The composition of the work team will depend on the characteristics of the company (number of employees, turnover, departments, etc.). Regardless of that, there will be a liaison officer who works directly with the chosen technology provider, coordinates the work team, and is the link with Management.
- Establish a work methodology and phases. It is necessary to set deadlines for each work phase and provide a margin for contingencies. It is also important for the schedule to introduce a pilot phase to check that everything is running smoothly prior to implementation.
Factors that slow down an EDI project
Numerous factors have been identified as slowing down the EDI expansion process in companies across Latin America:
- Failure to align expectations: Lack of planning and management can hinder the development of a project or deliver a result not in line with the expectations of the areas that demand it.
- The lack of a holistic view caused by considering EDI an expense instead of an investment, or strongly rooted reticence toward changing management processes.
- Low provider/retail trading partner interaction - less turnover and fewer message types exchanged- makes it hard to harness all the benefits of EDI.
- Failure to understand EDI as a key tool in supply chain operations.