EDI Modernization Strategy: Five Decision Factors (Part 1)

Introduction: blog post is the first part of a series highlighting the five decision factors needed for EDI modernization strategy.

Understanding EDI Modernization

EDI (electronic data interchange) has been a data transfer method used to standardize message formatting by businesses for several years. One of the newer considerations coming into play, however, is EDI modernization, which extends B2B integration and automation capabilities beyond classic EDI to support modern business requirements.

Companies are changing the way they connect, automate business processes and exchange data, all which are evident in modern B2B integration. Its value is in expanding integration capabilities while reducing cost and complexity of partner onboarding and operations. On the other hand, classic EDI still remains essential, but is unable to fully provide modern B2B integration needs.

For this reason, there are some points to consider if EDI remains right for your business, or if you need additional functionality EDI modernization provides. Some key questions to ask whether it’s time for EDI modernization are:

  • How do a business’s value network and role drive B2B integration priorities?
  • What additional requirements apply to businesses that are large, fast-growing, or complex?
  • How can integration capabilities and assets be leveraged to increase value?
  • What factors apply when deciding whether to outsource infrastructure, trading partner onboarding, operations, and / or other services, or source them in house?
  • What strategies and trade-offs apply when adopting a new B2B integration solution?

In answering the above questions, understanding and prioritizing modernization objectives will enable businesses to create a strategy then execute it.

The figure below explains how features from traditional EDI differ from EDI modernization.

Figure 1

Modern B2B integration adds capabilities (black/dark text) that extend Classic EDI (red/light text).

In addition to the differentiators, there are some common modernization drivers to know. The figure below includes some, but others are: boosting partner service levels, reducing charge-backs and other penalties, integrating trading partners with limited technical capabilities, improving visibility, auditability and manageability, reducing service outage risks, consolidating infrastructure, and addressing application and data integration needs.

Reasons for EDI Modernization

Reasons for EDI Modernization

In upcoming posts in this series, we’ll walk through the five decision factors for EDI modernization strategy and further explain what’s involved with each one.

For more information in the meantime, access the EDI Modernization Strategy: Five Decision Factors white paper here.

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