The limitations of outsourcing only hardware and software become even more apparent when compared to a fully managed service approach, where the whole process is contracted out to a third party rather than just the transmission of messages. Fully managed EDI can save organisations both time and money and provides a whole range of additional benefits, including business intelligence and improved visibility and accuracy, which can be harnessed to boost performance across the supply chain.
Fully managed EDI also removes the onus on suppliers to comply with a broad range of customer mandated industry standards and message formats. Choosing a provider that is fully compliant with all standards and formats ensures that a business can accommodate new EDI directives and on-board new customers without a large additional financial outlay. This is now achieved through a single connection to the fully managed EDI provider that carries out these tasks on the client’s behalf.
With the connection and service being paid for through a fixed annual fee, the fully managed approach also allows businesses to keep EDI costs under control and forecasted more effectively. The high capital expenditure required for an on-premise solution is no longer needed to kick-start the process, replaced by annual fees that can be managed within operational budgets. With the majority of large customers now expecting EDI to be in place, the fully managed route also permits even the smallest of suppliers to comply while still concentrating on their core business.
Managed service providers work behind the scenes to ensure all customers get optimum EDI performance. For example, individual real-time message management removes human error and ensures that messages reach the required target, while invalid documents are flagged and amended before being sent. Changes can also be made across the board, so if a particular buyer or supplier alters an invoice or purchase order, the new format is available for all organisations using the system.
Supply chain performance is also enhanced through the increased business intelligence provided by managed EDI. Partners are able to share and access information in real time, integrating it into existing ERP systems. This allows for more accurate forecasting, as point of sale information can be distributed back through the supply chain allowing organisations to get a far more accurate picture of future demand.
Disputes between buyers and suppliers can also be kept to a minimum as supply chain information is freely available to all parties. Order acknowledgements and Advanced Shipping Notices (ASNs) can be checked to make sure that deliveries have arrived on time and match what was originally promised. If complications do arise the intelligence is available to allow organisations to work together to solve the problem.
Outsourced EDI is a growing trend as organisations seek to remove the burden of in-house solutions, look to create real time visibility and efficiency or face growing trading complexities. However, if the decision has been made to outsource the EDI process careful consideration of the choices available and their cost benefits is a vital step. A fully managed approach offers many benefits. Not only does it free up time and resource by removing the problems that come with on-premise or simple outsourced approaches, it also turns EDI into so much more than just a secure message transfer system, enabling organisations to have far greater control of their supply chains and of their business too.
