by CData Arc Marketing | April 15, 2020

Your Trading Partner Says You Need EDI, Now What?


You've started a business selling products, and they're catching on. Now, a big box retailer like Walmart or Target wants to put your products on their shelves. But in order to cement that partnership, your new partner is asking you to adopt EDI.

How do you get started?

Defining EDI and Its Benefits

Electronic Data Interchange (EDI) is a standard for electronically exchanging transaction-related business documents with your trading partners — such as purchase orders, invoices, and shipping notifications. It follows a tried and true process.

EDI Mapping & Translation

Performing an EDI transfer starts with mapping, or translating, data from your ERP, accounting or other business systems into a document that adheres to one of the standard EDI formats, such as X12, EDIFACT, or TRADACOMS. In most cases, your partner will specify the EDI format you should use.

EDI File Transfer, or Managed File Transfer

You must then transmit that document to your partner securely using a transport protocol such AS2, SFTP or through a managed service such as a value-added network (VAN).

EDI-Backend Integration

When you receive an EDI document, the data in it must be entered, manually or automatically, into the appropriate backend system.

EDI Benefits

The goal of EDI is to simplify logistics workflows through standardization, automation, and simplification of critical data exchanges. Among EDI's many benefits are cost savings due to more predictable and controllable document exchange workflows, greater efficiency because transactions can be completed faster, and greater accuracy from eliminating manual rekeying of data into backend systems. Finally, you can of course achieve your primary aim of complying with your trading partners to do business.

To learn more about all the EDI basics, see our full beginner's guide to EDI.

How Do You Get Started with EDI?

You have a number of options for getting started with EDI. These include manual web forms & Excel spreadsheets or automated solutions that include managed services, in-house EDI via automated EDI software, or a combination of these approaches.

Manual Web Forms and Excel Documents

For organizations just starting out with their first EDI trading partner, a fast and easy way to get up and running is with Web EDI or the CData Arc Excel Connector.

With Web EDI, a managed service provider gives you a web-based form where you manually enter transaction-related data. The service provider then sends your partner the document. When you receive documents through Web EDI, you must key the data into your backend systems.

With the CData Arc Excel connector, you create forms yourself in Excel, without having to pay a managed service provider. You use a provided, pre-configured template to generate an Excel file, fill in the data your partner wants and submit the data.

While Web EDI and the CData Arc Excel Connector are a great way to get up and running quickly with your first trading partners, once you start completing more transactions with more vendors, you'll likely outgrow these solutions and need an automated process.

Managed Services

One traditional way to obtain EDI services is to use a value-added network (VAN) or work with a managed services provider. These services will translate the data from your backend systems into an EDI format for you, then send & receive the files/data to & from your partners. They temporarily eliminate the immediate need for you to install and manage software, letting your IT team focus on other projects.

However, it's critical to understand exactly what services the managed service provider or VAN delivers.

Some vendors provide both translation and file transfer services, others provide only file transfer. Moreover, the managed service provider will almost never be able to enter incoming EDI information into your backend systems. You will still need IT experts on staff who understand your business and how your business processes work to develop integrations with your backend systems.

In addition, though managed services providers and VANs_ start off_ affordable when you have small numbers of transactions, managed service providers charge fees based on usage, increasing significantly as your transaction volumes grow. Typically, if you start exchanging even 50 total documents per day or add a second EDI partner, you'll actually save money with EDI software you manage in-house.

In-House EDI with Automated EDI Software

In the long run, managing EDI in-house will be your most cost-effective option because your costs will remain constant, regardless of your transaction volume or the number of partners you bring aboard. Moreover, once you set up initial mappings with your first partner, you'll be able to make minor modifications to add subsequent partners using the first mappings as a template.

You'll need the proper hardware and software, as well as dedicated in-house teams or an implementation consultant with EDI knowledge to set up your mappings. You'll also need internal teams on hand to manage your integration with backend systems.

Learn more in our comparison article on Direct, In-House EDI vs. VANs.

Hybrid Solutions

Of course, these options aren't all or nothing. You can combine tactics.

For example, if your aim is ultimately to cost-effectively run EDI in-house, but you don't have a core competency in EDI, you can purchase the hardware and software, hire a consultant to do the configuration, setup, and mappings for you to get started, and then have the consultant transfer that knowledge to your internal team so your staff can take over when you are ready to build out your internal EDI team.

What You Need for In-House EDI Management?

If you decide to implement your EDI solution in-house, you need to plan, develop a timeline for your implementation, and be prepared to manage EDI on an ongoing basis.

Planning Checklist

Here are steps to consider for effectively planning your in-house EDI implementation:

  • Define your goals and constraints, such as partner & technology requirements, budget, and risks.
  • Create an inventory of any legacy systems you may have.
  • Determine which EDI standards, EDI documents and file transfer protocols you need to use. Your partner will likely provide this information.
  • Select a modern EDI solution and the appropriate hardware.
  • Define roles for the EDI department, and hire staff.
  • Make sure your EDI staff understands your business processes and how EDI fits.
  • Specify your integration architecture.

Establish Your Project Schedule

Next, you'll create a project schedule.

If you're using a managed service provider, this step may be as simple as communicating timelines to your partner to avoid hiccups.

If you're performing your EDI implementation in house, you should include the following tasks into your schedule:

  • Implementation: Set up the technical mapping/translation and transmission to partners.
  • Testing: Send test documents to your partners to ensure your workflow proceeds properly.
  • Training: Initial EDI training can take a short or a long period, depending on whether your project is in-house or outsourced.
  • Go Live: Progress from production to production stabilization and support to ensure processes are functioning properly

Perform These Daily Tasks

Once your EDI project is up and running, your organization will need to perform the following daily tasks:

  • Monitor EDI operations and performance on an ongoing basis
  • Analyze transaction files to identify any data or transmission errors
  • Research, track and resolve EDI issues — even if with a VAN or managed services provider, your IT team needs to be heavily involved in troubleshooting
  • Work with your partner to resolve transmission issues
  • Maintain EDI documentation

Get Started in Weeks, Not Months with CData Arc

Whether you decide to take a manual approach to EDI, implement an automated solution in-house, or use a hybrid approach, you'll need a reliable EDI solution.

CData Arc can provide all the EDI capabilities you need to seamlessly connect with partners, send and receive EDI documents, and quickly automate EDI processes with ease. To see how CData Arc can benefit your business, download a 30-day free trial or explore CData Arc EDI here.