Manual processes and paper-based exchange of business documents might be acceptable at a small scale, say one or two exchanges a week. However, when organizations have to manage hundreds or even thousands of orders together, what happens then?
This is where EDI or Electronic Data Interchange comes to the rescue. It refers to the computer-to-computer transfer of business documents or information over the internet in a standard electronic format. Offering a plethora of benefits to businesses, EDI is now one of the most popular and reliable mediums for data exchange and smooth communication. As it eliminates human intervention, businesses experience speed, accuracy, fewer errors, and smooth transmission of documents, such as invoices and purchase orders which flow directly from the ERP/accounting system to customers’ systems. Hence, shortening the order-to-cash cycle.
For small businesses, the first experience of EDI often comes when their large customers or trading partners mandate it. However, many are reluctant to migrate to the EDI because the transition from paper-based exchange to electronic is time and cost-consuming. Therefore, many enterprises are confused if the change is worth pursuing or not. Well, we agree that there are some barriers when you move to EDI but these obstacles are the same for all irrespective of the size of the business. Moreover, in many cases, small enterprises can overcome these stumbling blocks more conveniently and efficiently than their larger counterparts. Also, if you evaluate and compare the efforts, time, and cost involved in rectifying the errors due to manual data entry and redoing many other tasks, the shift to EDI will look a far better choice.
EDI software solutions not only enhance productivity and efficiency but also offer several more benefits for small businesses, compelling them to make the shift without any delay. If you are also not sure whether to move to EDI or not, then these points will surely clear your doubts:
Automation & Accuracy
A business workforce has many responsibilities and tasks in day to day life. Many staff members and specialists wear several hats which often lead to errors or omissions. Of course, paper-based trading and manual data entry are tedious and complicated jobs. Even for professionals working in the field, there are many problems and challenges throughout the process. There are chances of mistakes during re-keying data from orders, carrying out payment procedures, and initiating returns. These errors can have long-lasting and costly consequences on the entire business. EDI is an automated system that reduces repetitive and manual tasks related to invoicing, purchasing, and shipping. It also provides transparent records which lead to better follow up with customers, fewer botched orders, and wrong entries.
Yes, with digitized business communication and transactions, there are fewer errors, thereby reducing business expenses. Along with that, EDI also saves other operational costs by eliminating paper-based systems. To start with, there is no need to spend money on paper and postages. EDI transactions are electronic and instant so enterprises do not have to set a separate budget for postages, paper, ink, envelopes, forms, transit, etc., as all of them are no more in the equation. Apart from saving wastes and materials within the business, EDI software also proves beneficial for external resources, such as labor and fuel required for shipping and transit activities. Also, filing, storage, and retrieval costs are eliminated which mitigates administrative and maintenance costs. After the initial set-up cost of EDI, the trading partner can deal with the maintenance of the system, IT structure, and day-to-day operations. Thus, small businesses can save costs related to additional staff, hardware, and software. And, the in-house team can focus on core and value-driven activities.
Another major benefit of EDI is that it enables small businesses to respond to market changes and conditions quickly and effectively. As you all know that evolving with environmental factors involves disruptions, hindrances, and various other risks. With EDI integrated into the business, this can be done within seconds without any hassle or hindrances. It also streamlines sales and trading partner activities and ensures precision in order fulfillment, production planning, response time, and delivery. All the tasks are aligned with customers’ best interests and trading network. Also, we are familiar with the importance of accurate, quick, and on-demand updates while communicating with trading partners. EDI facilitates all three elements by delivering information on process statuses, such as changes in purchase orders, acknowledging receipt orders, pending payment status, etc.
True Fact: customer satisfaction is the key to secure business for the long-term and achieve unmatched success. So, you must provide them with what they seek, and you gain happy and loyal customers. Now, the big question is: What do customers want? The answer is- quality products at the right time and place at economical prices. Failing to offer the same can result in the downfall of your business. EDI is the foundation to deliver exactly what customers want as it equips organizations with timely updates and all essential tools. It increases the accuracy of the orders and enhances the speed of the payment process. EDI software also bridges the communication gap between business and customers, keeping them in touch with each other at every step of the supply chain. Clients are always in the loop and know the correct position of their order within the supply chain. Considering the fierce competition in the market and how buyers hold the power, businesses need to leverage the advantages of EDI and offer seamless customer service.
What is the primary goal of every enterprise? Yes, you might say it is to serve customers but that is a pathway to attain business growth and earn higher revenue. Apart from customer satisfaction, another factor that contributes to this objective is brand loyalty. When you provide customers with a positive buying experience while maintaining fluid communication, they appreciate the effort and service. EDI minimizes human touchpoints for interaction and makes it electronic by enabling end-to-end automated processing of business documents, which improves their loyalty and satisfaction. You can gain a competitive advantage, trust, and reliability without putting in much effort, making EDI more important than any other technology. Also, the performance is consistent with a repeatable smooth experience. Online recommendations, good reviews, and word-of-mouth promotion increase which will earn you more clients and retain their loyalty.
Wrapping It Up!
We are sure that by now, you can see that EDI is the best opportunity to expand and grow your business in this digitally-advanced world. Once you implement an EDI solution, you can make the best out of it within a short span of time and take your business to a higher level cost-effectively and quickly.
Author’s Bio: Alicia works with the editorial team of A3logics, a leading company offering IT consulting services and development solutions. Exploring the latest technologies, reading about them, and writing her views have always been her passion. She seeks new opportunities to express her opinions, explore technological advancements, and document the details. You can always find her enjoying books or articles about varied topics or jotting down her ideas in a notebook.