4 Benefits of Cloud-Based EDI Managed Services
The continued expansion of eCommerce is fueling the need for companies to deploy a B2B Integration solution that includes EDI capability. In 2016, global e-retail sales grew 24.6 percent and made up nearly nine percent of the total retail market worldwide according to a report from Statista. Walmart, Amazon, and other major retailers demand EDI connectivity from their customers and suppliers as a prerequisite for doing business with them.
Companies continue to choose an EDI solution because of its simplicity in extracting data from business systems and the widespread adoption throughout the industry. A recent study by Forrester revealed EDI transactions exceed 20 billion per year and growing. EDI is easier to connect to legacy systems than many non-compatible APIs.
Many companies have decided to implement their EDI solution using inexpensive off-the-shelf software. While that may be an expedient choice, the reality is that many forward-thinking businesses now outsource this functionality to take advantage of a third party managed services cloud based EDI solution.
There are four major benefits to using a managed cloud EDI solution.
Flexible and scalable
Most businesses have a diverse customer and supplier base. Larger organizations with highly digitized processes will likely require EDI connectivity. Small to midsize customers and suppliers will likely want to share information through web portals using API’s.
This need to accommodate both EDI and API requirements presents a challenge to organizations that attempt to manage their connectivity solutions in house. They will often end up with a series of point solutions for EDI, API’s, and other data sharing technologies. This can be expensive and resource draining.
Outsourcing a cloud managed services platform eliminates those obstacles since it can easily address any communication or collaboration format including EDI, API’s, or any other required technology. Using an outsourcing partner offers a seamless integration path with both low tech and high-tech companies through web portal and other connectivity methods. A cloud based EDI managed services solution removes the need to build a series of in-house point solutions and its flexibility means it can scale as your business needs fluctuate.
Many organizations believe that implementing an in-house solution collaboration solution is more cost effective than engaging with a managed services partner. This assumption is especially strong if the business only requires one or two EDI connections.
However, these organizations often don’t take the full Total Cost of Ownership (TCO) into account when they are making their in-house/outsource evaluation. Resources needed to support an in-house solution include expensive EDI experts and staff to monitor the system 24/7 and make corrections when there are transmission errors. There is also the expense for hardware and software maintenance and upgrades. These costs are often categorized as overhead, but they are actually direct costs linked to maintaining an in-house connectivity solution. With those costs included in the analysis, an outsourced managed services solution becomes a much more attractive option.
Provides cloud computing advantages
A cloud based EDI solution provides the advantages that come with cloud computing. It minimizes the capital expense of purchasing and upgrading hardware – an ongoing cost as the business strives to keep up with constantly evolving technology. Cloud computing eliminates the need to constantly buy and upgrade software since an outsourced partner maintains that responsibility.
A cloud based solution also reduces the need to maintain an extensive IT staff that must manage a vast array of servers and applications to support the solution. Data in the cloud has also proven to be more secure than on-premises since outsourced partners servicing multiple clients must maintain the latest in data protection safeguards. The cloud also provides an effective business continuity/disaster recovery data protection solution to ensure critical data is always available.
Supports B2B eCommerce
The explosion in B2B eCommerce is driving significant change for businesses of all sizes. Organizations now face new challenges to support this dynamic growth. They must look to automate and integrate their business processes to enable a clear, streamlined transfer of products and information. They must provide a federated, single view of their eCommerce business including inbound, inventory positions, and outbound product integrated with internal systems. They must also offer complete visibility to their supply chain including virtual inventory inbound, supplier PO’s and ASN’s with ETA dates, and multiple inventory positions.
It is no longer possible to meet these needs with emails and spreadsheets. To compete effectively, businesses must digitize their communication processes. They can accomplish this by choosing a platform that can handle EDI, API, Web Portal, and other connectivity technologies. Managing this complexity in-house is becoming increasingly difficult and can drain valuable resources from other necessary value-added activity.
It may be true that eventually API will take over as the dominant communication and collaboration format, but for now, EDI connectivity continues to grow and providing EDI functionality is still a requirement. Implementing a cloud based EDI managed services solution not only provides an efficient EDI process to meet today’s business needs, but also perfectly positions businesses to take advantage of the advanced technologies to come.