What Is the Connection between ERP and EDI?

EDI systems and ERP solutions are essential for supply chain firms to do business. On the front end, EDI facilitates communication with trading partners, while the ERP serves as the system of record on the back end.

Currently, integration technology has improved substantially, allowing EDI and ERP solutions to share data streams.

Recognizing the usefulness of EDI software, a number of ERP businesses have decided to provide EDI services as part of an ERP package.

Nevertheless, EDI integration is intrinsically challenging since it needs the connecting of a great number of moving pieces.

Complete EDI-to-ERP integration may provide your supply chain organization a significant increase in productivity and visibility if performed correctly.

When badly setup, EDI to ERP integration produces a rat’s nest of cumbersome bespoke integrations that impede corporate operations.

Before delving deeper into the benefits of EDI and ERP integration, let’s define each component of EDI ERP integration.

What’s EDI?

EDI is the interchange of business documents between company partners using a common electronic format.

Two trade partners exchange a Purchase Order and an invoice to demonstrate a fundamental EDI procedure.

What is an ERP?

Generally, ERP (Enterprise Resource Planning) refers to a type of business management software — typically a suite of linked applications — that a company may use to gather, store, manage, and understand data from a variety of business operations. ERP systems monitor corporate assets including:

  • Cash Raw
  • Materials
  • Production
  • Capacity

ERP systems also track business commitments:

  • Orders
  • Purchase Orders
  • Invoices
  • Payroll

Why EDI?

  • Transactional automation increases productivity.
  • Reduction of manual data entry mistakes

     

  • To initiate or maintain a business connection with certain trading partners, vendors, and/or suppliers, you may be required to do EDI.

     

  • Transaction fees can be quite costly. EDI offers a fixed charge regardless of the amount of transactions.

Integration Benefits

  • Transactional automation increases productivity.
  • Reduction of manual data entry mistakes
  • Validation of content (through EDI standards and receiving software) that verifies
  • transactions have all the necessary information for appropriate processing, tracking, etc.
  • Reduced operating expenses
  • Rapid processing
  • The capacity to sell in additional locations.

A Trusted Integration Solution

We have already assisted a large number of outstanding businesses in establishing connections with their EDI trade partners. Here are several:

What Is the Connection between ERP and EDI?

Transactional automation increases productivity.

Reduction of manual data entry mistakes

EDI is frequently used by ERP systems to facilitate company communication. The 1980s-introduced EDI technology was utilized to transport electronic documents both within and between enterprises. ERP functions to manage an organization’s internal and external resources, enhancing communication and decision-making by unifying company activities and processes. By integrating possible communication facility and supply chain management technology, ERP and EDI collaborate to make programs more efficient.

Transactional automation increases productivity.

Reduction of manual data entry mistakes

EDI replaced conventional forms of business communication, such as the telephone and fax, with electronic ways of document transfer. Using computers to transmit messages and documents online has significantly reduced administrative expenses.

Enhanced productivity through the automation of transactions

Error reduction in manual data entering

Although ERP and EDI systems can function together to connect all corporate participants to the same communication and database system, EDI does not require ERP. EDI may be utilized with a computer and Internet connection.

ERP systems connect supply chain management with EDI communication exchange to streamline administrative operations. ERP solutions may eliminate human error, making the firm more cost-effective, and improve communication, therefore increasing the original advantages that EDI offered to conventional business. Together, ERP and EDI solutions decrease the paperwork required for inter-business communication.

EDI is the supply chain management system that focuses on the transmission of electronic business communication. This can include orders, payment notifications, and shipment confirmation. As a result of the use of EDI in business, many ERP systems incorporate EDI technology within their software. ERP and EDI systems work in tandem to guarantee that these documents adhere to industry and legal requirements.

Consulting firms and other businesses frequently employ ERP and EDI professionals to assist with system requirements. EDI professionals manage translation procedures and interface approaches, as well as provide support for EDI partnership systems. ERP professionals comprehend the organization’s requirements and operations and develop an ERP system to satisfy these requirements. Both ERP and EDI professionals may also be responsible for training users to maximize their utilization of the enterprise’s systems.

Some contend that Extensible Markup Language (XML) can replace EDI in some enterprises. While XML and EDI are similar in essence, they are distinct due to the method in which their respective data structures are organized. XML format is now too broad and lacks standards to be implemented on an industrial scale comparable to that of EDI technology. XML does not pose a danger to EDI, as all types of e-commerce enable greater advances in e-communication, hence bolstering EDI technology.

What is ERP and EDI integration?

EDI ERP integration is the process of facilitating automated data flow between the “front-end” EDI application and the “back-end” ERP system of a business. Automating the transmission and translation between EDI and ERP solutions minimizes the need for human re-entry of messages, orders, and invoices and the chance of user mistake.

The following EDI to ERP connectivity is illustrated in the diagram below.

  1. On the upper left, a retail, wholesale, or manufacturing partner transmits an inbound EDI 850 purchase order.
  2. This EDI 850 transaction is automatically tallied and converted to an internal format (Idoc, XML, FF) prior to being ingested into a right-hand ERP (SAP, NetSuite, Acumatica, Dynamics 365, Oracle E-Business Suite, Oracle JD Edwards).
  3. Using an API connection, the information formerly included in the EDI papers is then pushed into the ERP system on the right-hand side.

The Value of Automated ERP and EDI integration

Historically, EDI and ERP relationships have been separated by the limits of each software system. Each would control its own business process, but the two components could not be effectively integrated.

Companies would either manually feed EDI data into their ERP system or develop a haphazard, proprietary interface in an attempt to generate a data flow between the two systems.

Currently, this calculus has evolved. The integration of modern EDI solutions with your ERP is both smooth and revolutionary.

Creating an ERP and EDI connectivity provides a number of benefits, including:

  • Improving data accuracy

    accelerating business cycle rate

    augmentation of supply chain visibility

Automating EDI ingestion and translation into your ERP reduces the need for human data entry, resulting in accurate data. Manual data entry will typically result in mistakes since data will be entered incorrectly. Even if only 1 percent of orders are entered erroneously, the erroneous figures will cause problems for the whole firm. Creating an automatic connection between EDI and ERP avoids errors from ever occurring.

Integration of EDI and ERP enables your company to significantly cut processing times, hence accelerating business operations. When EDI transactions can be automatically exchanged with trade partners in minutes as opposed to days, business cycles may be completed more quickly.

Visibility over trade partners: An automated EDI and ERP integration enables your organization to devote more time to expanding its company. Because the data going between EDI and ERP is precise, automatic, and easily accessible within your ERP, you may instead concentrate on how your EDI partners effect your organization as a whole. No more anxiously hunting for missing orders or EDI transmissions that failed.

Advantages of an EDI-ERP Integration

Admittedly, the complexity of combining EDI and ERP may be a formidable obstacle for many firms, particularly smaller businesses just beginning their digital transformation journey.

Due to the fact that the two systems utilize distinct data formats, a substantial amount of integration effort is required to make them see the data in the same manner.

However, commitment to the process may significantly increase the value of the outcomes. Investing in EDI-ERP integration has numerous significant advantages.

Enhanced Data Accuracy

Both ERP and EDI are crucial for optimizing corporate procedures. By automating data collecting, processing, and reporting, an ERP system reduces the amount of manual labour and paperwork required.

In addition, EDI avoids the time-consuming and error-prone process of document translation before exchanging them with business partners.

When applied together, EDI and ERP provide end-to-end automation in which data is automatically gathered, processed, shared, and received, therefore decreasing mistakes along the supply chain.

In addition, these systems share a standardized view of business data, preserving synchronization and data integrity and making it easier to discover and resolve data errors.

With precise and timely information, you can make better business decisions, prevent supply chain interruptions, and increase customer satisfaction.

Accelerated Business Cycle Speed

Using EDI and ERP to automate document processing and sharing eliminates bottlenecks such as manual data entry and many rounds of review, enabling firms to operate more quickly and effectively.

Purchase orders, invoices, inventory management, and payments may be generated, authorized, and transmitted with minimal human participation.

Moreover, EDI-ERP connectivity enables you to track internal and external data on the same platform, therefore providing a full perspective of ongoing activities. Having quick access to all pertinent information and data accelerates decision-making and reduces error margin.

Improved Supply Chain Visibility

ERP is a good tool for handling internal transactions on its own. However, the conventional supply chain also includes vendors, partners, and even customers.

Integrating EDI with ERP expands the data perimeter outside your organization, allowing you to view more, if not the whole supply chain.

With enhanced supply chain insight, you can manage inventories and resources more effectively and even anticipate potential issues before they become severe.

Higher Customer Satisfaction

Constant EDI-ERP connectivity enables you to maintain a dependable and constant information flow between your business and trading partners. On the same platform, you can simply track transactions, identify faults or exceptions, and take fast action.

Streamlined information flow and visibility enhance your effectiveness in resolving process, quality, and customer support concerns, hence reducing the likelihood of negative feedback and lost consumers.

More effortless synchronization of data

Both EDI and ERP enable electronic file transmission. Consequently, they minimize paperwork and save significant time. Moreover, users may enter into their ERP systems to access synced files. They no longer need to rely on faxes.

Improved visibility

The supply chain may be lengthy and intricate. Fortunately, EDI connectivity with ERP improves the visibility of even the most intricate supply networks. Due to increased visibility, a business may process orders more quickly, shorten its order-to-cash cycle, and accept partners that are already utilizing EDI.

Efficient communication

The supply chain may be lengthy and intricate. Fortunately, EDI connectivity with ERP improves the visibility of even the most intricate supply networks. Due to increased visibility, a business may process orders more quickly, shorten its order-to-cash cycle, and accept partners that are already utilizing EDI.

Promotes customer care

It is important how your customer service staff reacts to inquiries from consumers. If clients must retrieve and exchange paper documents, the retrieval and exchange procedure will be lengthy and tiresome.

EDI in ERP facilitates a swift resolution process and facilitates the recovery of client data. Prompt response leads to satisfied customers who return repeatedly.

Quicker order processing

Customers from all around the world like businesses that provide prompt and efficient service. A combined EDI and ERP system helps expedite the processing of orders and the resolution of difficulties.

Additionally, they will minimize manual labor and lessen tiredness. In addition, if you process orders rapidly, you can increase your sales.

Expand your business faster

A business that desires to build new alliances must be prepared to pay the price. Progressive firms might readily embrace partnering with a company that employs an EDI enterprise resource planning (ERP) solution.

Therefore, integrate EDI into your communication platforms to gain more lucrative bids and chances.

How Can You implement EDI with ERP?

Often, integrating EDI into an ERP system is more difficult than it sounds. The faultless connection between these two systems is necessary for optimal processing times, low mistakes, and continuous compliance, but many firms struggle to achieve it.

EDI integration with ERP is particularly difficult for firms switching to a cloud-based ERP platform while still utilizing heavily-patched legacy EDI.

Although third-party connectivity plugins exist to connect classic EDIs with ERP systems, they sometimes require further human modification to meet the needs of unique organizations, which adds expense and complexity.

To eliminate compatibility difficulties and maximize the performance of your systems, you must invest in an EDI solution that connects easily with your on-premises or cloud-based ERP.

If you are like the majority of businesses, you likely lack the in-house ERP-EDI integration knowledge necessary. Therefore, the optimal course of action is to coordinate with a third-party partner, particularly an EDI services provider familiar with your ERP system.

With the correct vendor and platform, you can save configuration time and eliminate costly downtime throughout the integration process.

How is EDI different from an API?

The fundamental difference between EDI and an API is that EDI is a custom-built data exchange mechanism. It is anticipated that each business would apply its own modifications.

Consequently, although a human-readable data format such as JSON/REST may be slightly simpler to create, a similar mapping procedure to the partner’s data format will be required during system setup.

As long as there is clear documentation and support for two-way protocols such as system receipt acknowledgements, there is likely no difference in implementation timeframes between an elegant JSON interface and a rudimentary ODETTE document for seasoned EDI integration suppliers.

Companies that now manage their supply chain interactions manually can frequently realize the greatest cost reductions by implementing EDI.

The ability to interact with large national partners, many of which need a specific EDI implementation in lieu of human communication by email, postal mail, or telephone, is another advantage for smaller businesses.

As ERP technology has become a crucial connection between manufacturing, transportation, and retail businesses, the requirement for smooth data transfer via EDI has grown.

By integrating sophisticated backend EDI connections with front-end management and administration capabilities, software systems such as abas ERP have filled this need. Implementing EDI has never been simpler than with contemporary ERP software.

Why avoid using ERP “plug-in” EDI Modules?

Integrated ERP system EDI is becoming an increasingly common entrance point for EDI ERP integration, particularly among small and medium-sized businesses. However, as you will see later, this solution has numerous significant restrictions.

Costly Integration Delays

A fundamental advantage of separating EDI and ERP is the streamlined deployment of system modifications. A qualified EDI supplier may set up new partner connections on a stand-alone EDI solution within hours, independent of ERP system integration.

Bundled EDI ERP systems frequently fail to deliver the same degree of efficiency when connecting new partners, partly because ERP vendors emphasize their core product over add-ons such as EDI.

Your trade partners cannot afford to wait while you set them up on your system, so they will likely move on to a more agile company.

Choosing a dedicated EDI solution from a professional EDI provider will provide timely updates and expedited onboarding, resulting in strong partner relationships.

ERP Limitations

Typically, ERP systems are not suited for EDI transactions due to their intrinsic role as data stores. Even enterprise resource planning (ERP) software of premium quality may lack the EDI routing and translation functionality required for optimal operational effectiveness.

Therefore, selecting a bundled EDI ERP system may limit your capacity to swiftly adapt to changing industry norms and consumer demands.

Working around the restrictive EDI add-on frequently needs bespoke coding to accomplish the desired outcome. In addition to the unanticipated expense, these extra configurations can raise integration complexity and system failure risk.

Limited Integration With Other Enterprise Platforms

Other programs, including as TMS, WMS, CRM, and eCommerce channels, must also interface with EDI, despite the fact that most EDI data flows through the ERP.

A packaged EDI ERP solution may operate effectively with the ERP, but not with the other enterprise systems in your organization.

You may even be compelled to manually circumvent the EDI service or install costly bespoke integrations, which can compromise system affordability and dependability.

What does abas EDI offer?

abas EDI is an ERP module that facilitates the mapping of data between EDI files and abas system transactions.

The abas EDI software abstracts the intricacies so that disparate corporate EDI systems may be united, regardless of the backend EDI technology and file formats. Data fields in the EDI file will be mapped to corresponding fields in the ERP interface.

EDI is frequently the most cost-effective option for businesses that now manage their supply chain communications manually.

The establishment of the EDI system can be accomplished concurrently with other onboarding tasks for businesses that are implementing abas ERP.

While initial configuration may necessitate interaction with specialists, continuous maintenance of the system may be performed by anybody using the abas EDI Configuration tool in a self-service approach.

abas EDI Configuration enchants the intricate EDI mappings of data into place. Due to the fact that EDI formats vary from company to company, a setup phase is typically necessary to ensure the ERP can interpret the data.

Both standard EDI formats, such as EDIFact, ODETTE, and VDA, and universal data formats, such as ANSI and XML, are supported.

With abas EDI Configuration, this data association procedure is carried out using a graphical desktop interface that depicts the field mappings between the ERP system and the segment numbers and columns of the EDI data files.

This is a significant improvement over previous ERP systems, which may have required software developers to write thousands of lines of code to indicate what actions must be performed on the data fields.

Data synchronization with EDI

Once EDI and ERP are connected, individuals from two distinct firms can access synchronized versions of the same data. Their different ERP systems are able to show the information that was originally held on paper papers.

A paper shipping order, for instance, might instruct a warehouse to dispatch merchandise to a merchant. Now, in any ERP system, a worker may examine the identical information on the shipping destination, the billing address, and the list of product numbers and quantities.

Whether a business processes a few hundred or millions of orders, EDI can lead to cost savings. Manual communication regarding invoices and shipping sometimes consumes a considerable amount of staff time.

Modern-day EDI Solutions Can Seamlessly Integrate With ERP Systems

EDI suppliers are aware of the significance of a flawless EDI ERP interface and are always refining their platforms to enhance this relationship. Cloud-based or on-premises, the best EDI solutions can accept a variety of ERP systems and updates.

In addition, prominent EDI service providers are able to implement EDI ERP integration rapidly and affordably, hence dramatically reducing the ROI realization period.

In light of the advantages of a separate EDI platform, the expense and complexity of integrating EDI with ERP are no longer a valid reason for opting for an integrated solution.

Instead, choose for a specialized EDI solution that is compatible with your current ERP and other business systems and gives you the freedom to install future updates and onboard new partners without difficulty.

Here are 3 reasons why you should not combine your EDI and ERP solutions:

1. Risk to partner relationships

One of the primary advantages of separating EDI and ERP software systems is the flexibility to perform software infrastructure modifications more quickly.

A well-oiled EDI supplier may establish partner connections in days rather than months, but ERPs’ bolt-on EDI solutions do not provide the same pace. This distinction results from a shift in emphasis.

Less emphasis is placed on front-end procedures to improve EDI partner onboarding since ERPs are focused on enhancing their underlying product values, such as their order management and product inventory components.

Frequently, prioritizing development on ERP functionalities comes at the expense of incorporating a crucial EDI capability.

Waiting for business partners! Obviously, an ERP software vendor attempting to market his EDI module would dismiss such issues by stating that EDI services are “completely integrated” in the ERP platform.

This approach fails to recognize the true location of EDI migration and integration activities, which are the establishment of trade partners and the testing of interchanges.

Modern EDI systems and cutting-edge EDI mapping tools will make EDI onboarding more efficient by minimizing the amount of work necessary to establish and maintain trade partners.

A system for electronic data interchange (EDI) simplifies the modifications to custom code required to accommodate the needs of new business partners.

It gives a quicker response time for modification requests, which generally results in higher income and decreased operational expenses.

In addition, EDI companies have expertise connecting to tens of thousands of trade partners and frequently have pre-packaged EDI maps that may be rapidly implemented to establish a new connection. ERPs cannot make the same claim.

Evaluation and selection of EDI and enterprise resource planning (ERP) software typically occurs at a level above that of the operational EDI team.

IT managers who are fueled by adrenaline must grasp the significantly increased risk associated with the deployment of haphazard EDI solutions on top of an ERP.

2. ERP Limitations

Attempting to deploy a new EDI system from an ERP provider can increase the possibility of system failure by a factor of two.

The most advanced solutions provide EDI visibility in layers that cannot be matched by an ERP system. EDI suppliers design their platforms to provide real-time status updates, precise mistake remediation, and accurate business process tracking.

A vendor without a proven EDI interface cannot compete and frequently introduces various risks to time, cost, scope, and quality.

ERP systems are structured as data destinations and storage locations. They have inherent functional strengths and shortcomings. Good ERP software with “integrated” EDI capabilities may inhibit your capacity to adapt rapidly to new standards and client requirements.

Users lose alternatives inside rigidly connected systems lacking in adaptability and flexibility.

Frequently, the only “solution” to get around a fragile EDI solution provided by an ERP is to spend unbudgeted funds building bespoke code outside of the EDI component to accomplish the required business outcome.

ERP constraints might force firms to bear the expensive expenses of continuing maintenance, sometimes referred to as “technical debt.”

Alternatively, EDI systems with contemporary visibility tools enable your firm to make complicated EDI modifications on a single, well-defined platform.

3. Integration stretches beyond EDI and ERPs

Despite the fact that a substantial amount of external data will be fed into an organization’s ERP, there are various additional applications, such as your TMS, WMS, CRM, and/or eCommerce solutions, that may also require connection.

TMS solutions are crucial to supply chain firms for planning, executing, and optimizing the flow of incoming and outgoing physical items. These technologies also ensure that the cargo is EDI-compliant and that the necessary paperwork is included.

Notably, TMSs frequently sit between ERPs and external applications such as EDI, transforming orders into shipments before providing data to the ERP.

WMS systems also play an essential role in facilitating the execution of activities such as the tracking of items and manufacturing resources.

WMS systems are crucial to warehouse functionality and distribution centers, since they provide businesses with real-time data on inventory levels.

Integration with a WMS is crucial for third-party logistics providers. For total integration visibility, EDI data flows must traverse both the WMS and the ERP.

The CRM then handles client information, purchases, and contact details. Connecting your CRM and ERP allows a centralized, automated information source that avoids data duplication. The benefit of this connectivity for sales and marketing teams is unsurpassed.

At long last, eCommerce has swept the globe. The supply chain has been shaken by the Amazon impact.

eCommerce has risen the need for last-mile logistics and boosted the demand for shipment visibility among logistics providers. Many manufacturers are contemplating cutting out the middlemen and shipping directly to consumers.

In conclusion, wholesalers are use eCommerce to grow into new distribution channels, diversify their product offerings, and promote transparency.

As your supply chain organization adopts an eCommerce strategy, Amazon, Magento, and Shopify will be implemented as part of this endeavor. The next frontier for application integration will be integrating your EDI, ERP, and eCommerce platforms.

A variety of external ERP connections are depicted in the diagram below. In addition to trade partners such as Walmart and Target, you also have data from eCommerce apps. On the right, these links must be connected with the Acumatica enterprise resource planning system.

Connecting all of your apps to your front-end processes, not just your EDI, has a significant benefit.

However, integration encompasses much more than merely connecting apps. The EDI implementation infrastructure necessary to set up an EDI-to-TMS-to-ERP might be large and requires in-depth understanding of EDI and API.

If your organization requires integration beyond EDI and ERP connectivity, the majority of ERP systems will not have “out-of-the-box” connections or the expertise to develop a bespoke integration.

If your integration encompasses several trade partners and diverse applications, a real EDI integration platform is better to an ERP provider that has bought an EDI tool.

4. Modern EDI Systems are already made to integrate with your ERP

After determining the needs for EDI and ERP connection, the reality of EDI integration becomes obvious. Allowing each software system to accomplish its intended role will result in the greatest efficiency and lowest cost.

EDI was developed to facilitate the management of front-end interactions with trade partners.

As universal record-keeping systems, ERPs were designed to manage back-end processes.

Because each solution serves a fundamentally distinct function, it is in the best interest of any organization to maintain them distinct.

The finest EDI technology connects with enterprise resource planning (ERP) systems and can manage both incoming and outgoing transactions.

Companies must have a thorough grasp of how EDI interfaces are maintained and the possible drawbacks of placing back-end systems in control of front-end operations, regardless of whether the environment is flexible or run-time.

Modern EDI systems include B2B integration knowledge and platform features that cannot be matched by a simple EDI tool bolted onto an ERP.

If your company places a premium on real-time supply chain visibility, automatic EDI document ingestion into your ERP, and speedier trade partner onboarding, then an ERP cannot replace your EDI system.

Business scenarios in EDI integration

Consider a scenario in which Company A has a production unit in Europe and utilizes a logistics service provider in the United States to transport its products throughout the United States.

Very few of Company A’s trade partners use EDI, and the amount of documents exchanged between Company A and its logistics service provider is quite high.

What are the choices available to Company A in EDI integration?

Scenario 1: Direct EDI Integration

Direct EDI integration is a direct link over the internet between your ERP system and trading partners utilizing a particular protocol to build a secure communication channel for exchanging electronic documents (also referred to as messages). Your trade partner and you must employ the same communication technique or protocol.

When you exchange a large number of documents with your trading partners, direct EDI connectivity makes sense.

It is the simplest option and works well for beginners, but its implementation is time-consuming and takes a great deal of expertise when you need to set it up for several trading partners.

When you have several trade partners with diverse systems and communication protocols, you must integrate your ERP system with each of them in a unique way.

With our EDI Studio and Connectivity Studio systems, direct EDI integration is feasible, but labor-intensive. With proper training, you’ll be able to onboard new partners independently.

Scenario 2: Indirect EDI Integration

What if, however, Company A wishes to make EDI scalable by establishing several EDI connections with additional trade partners?

The solution of direct EDI integration is not scalable. When this occurs, indirect EDI integration is utilized.

Indirect EDI integration describes the electronic exchange of documents/messages through a Value-Added Network (VAN) or a Managed Service EDI provider, also known as an EDI broker.

A broker that facilitates electronic data interchange (EDI) provides your business with automated communication channels in many formats for communicating with its trading partners. Brokers also utilize VANs to interact with consumers from around the world.

Create a message with all the available data fields you may use for any of the customers. This is the golden message or document.

The broker is responsible for selecting the appropriate fields based on the customer’s specifications, performing the translation/transformation to the correct EDI format (both document format and protocol), and ensuring that it complies with regulatory requirements.

You may be aware that EDI standards differ across sectors (X12, EDIFACT, Odette, VDA, and Tradacoms are a few examples of EDI compliance standards) and that these standards have particular.

It is difficult for a company to retain all of this knowledge. As they engage with firms from many industries, however, brokers are proficient at conforming to diverse requirements.

To-Increase has a strategic agreement with TIE Kinetix, a leading provider of Document Exchange SaaS solutions, to provide Microsoft Dynamics 365 users with an all-inclusive EDI solution.

Therefore, if your firm is wanting to expand now or in the future, it is easier to establish a pipeline with these brokers, who will handle all EDI connections with your trade partners, allowing you to focus on your core workplace-related responsibilities.

Compared to a straight EDI connectivity, this method is certainly more expensive, but it also provides better scalability and flexibility.

Two-Step Indirect EDI Integration

What would be the next step if firm A has several global trading partners but the broker does not have contacts with each one?

In this situation, two-step indirect EDI integration, a modest variant of indirect EDI integration, would be the optimal option. Here, a broker collaborates with VANs to provide EDI connectivity with international trade partners.

Scenario 3: Hybrid EDI Integration

Consider the case of corporation A exchanging huge amounts of papers with trading partners Y and Z. In addition to Y and Z, it has a large number of additional trade partners with whom it exchanges papers at a lower volume than with Y and Z.

What would be the right option for EDI integration in this case?

You appear to require a combination of direct and indirect EDI integration. This is known as hybrid EDI integration.

In Hybrid EDI integration, electronic documents are transferred both directly and indirectly.

Here is why indirect EDI integration cannot be used in this instance. When there is a high volume of data (any data, not only EDI documents) flowing between trade partners, direct EDI integration is the optimal solution.

Another explanation might be that the trading partner is capable of handling the golden message or document on their own. In any case, it makes no sense for millions of transactions to go via a broker, as this would incur additional costs.

When the number of communications is modest and there are several standards and protocols to follow, indirect EDI integration can be used. Briefly, hybrid EDI provides the choice to select based on the transaction volume, frequency, and complexity.

To-Increase can assist critical firms establish both direct and indirect EDI connections so they may exert greater control over the EDI process.

Scenario 4: EDI Integration 2.0; Connect customers without EDI!

Despite the fact that many of your big trade partners may use EDI, some of the large and mid-sized firms with which you still interchange a significant amount of documents may not. (due to the cost required or technical limitations)

So how do you onboard customers or suppliers who are not able to do EDI messaging?

This situation is referred to as EDI 2.0 because we are introducing a new level to EDI communications; it differs from the ordinary EDI integration that you would normally perform.

The following illustration illustrates this point: Suppose you have customers or suppliers who can produce an Excel document for an order or a PDF for an invoice and email it to you.

The trade partner transmits the document to the broker, who changes and interprets the message into the same integration with D365 as standard EDI messages. There are brokers, such as TIE Kinetix, that specialize in onboarding Non-EDI consumers and vendors.

Users of Dynamics 365 will not notice any differences and will be able to manage all documents in the same manner; this is what I refer to as true digital transformation.

Some EDI brokers also offer web portals with the same branding as the D365-using organization. They may combine this portal with Dynamics 365 using the same integration that allows customers to add orders to this portal.

As you can see, a broker’s ability to manage all the different standards and link consumers or vendors with non-EDI channels may provide significant value.

The Right Way Forward

Organizations must continue to invest in B2B infrastructure to remain competitive in a digital environment that is always evolving. Moreover, EDI is an indispensable tool for businesses seeking rapid integration of business processes and enhanced corporate agility.

At To-Increase, we provide a variety of dynamic EDI solutions tailored to your company’s requirements. We can help you flourish as a competitive firm that offers the maximum value to its trading partners.

Are you seeking further advice on making the best decision about EDI integration? Immediately contact us! And if you intend to digitize your supply chain with EDI for Dynamics 365, be sure to get this eBook.

Modernize Your EDI System and then Connect to Your ERP

EDI is a fundamental component of the supply chain and continues to be the norm. Therefore, contemporary businesses require a contemporary EDI solution to conduct business.

Enterprise integration technology facilitates a successful data transfer for organizations that elect to replace a legacy system with an EDI solution.

Modernizing your EDI with a sophisticated cloud-based EDI platform enables your organization to take on new business and respond swiftly to customer and trading partner needs.

The last thing you need is for your data flow and business operations to be disrupted because your ERP’s inexpensive EDI environment is out-of-date.

Conclusion

EDI and ERP are two sides of the same coin. ERP solutions simplify operations, manage resources, and generate a single authoritative version of firm data. EDI, on the other hand, is the universally approved standard for sending electronic documents between firms.

The link between ERP and EDI derives from the fact that ERP systems are used to generate documents transferred over EDI, such as purchase orders and invoices.

Before transmitting documents to their intended users, an EDI platform transforms them into a pre-configured EDI standard that can be read by the data management system of the destination and processed automatically.

Similarly, when a trading partner shares data through EDI, the organization’s EDI platform automatically translates it into ERP-ready information.

EDI and ERP were once separate entities, independently deployed and handled by different IT teams. However, thanks to technological advancements, EDI platforms that can readily integrate with existing ERP systems now exist.

By integrating EDI with ERP, your enterprise can maximize the use of both technologies and achieve significant benefits.

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