How EDI can help your business

One the biggest inefficiencies in business to business commerce is the inability of systems from one organization to talk to another. Unless both companies have identical systems that were set up in a such a way that communication was possible, the process of coordinating orders etc would be manual. This takes time, and introduces the possibility of human error as a factor. What would be ideal is something that would act as a bridge between various systems. This is where EDI comes in.

EDI, also known as Electronic Data Interchange is a protocol for inter-system communication.

One example of EDI in action is when ordering raw materials. A manufacturer could have a system in place that automatically orders supplies from a vendor when certain reorder levels are reached. That order will get placed directly within the vendor’s system. This greatly simplifies the order process and be applied to several similar situations.

For any organization that relies on business to business dealings EDI provides efficiencies and cost benefits that cannot be ignored. The easiest way to check if you can use existing systems is to check for edi compliance. In the event that you don’t have any compliant system, you can retool your systems to use EDI. There are protocols and standards like ucc128 that will need to be implemented. There might be an initial cost, but that it would pay off in the long run.