18 April 2024

10 EDI Implementation Pitfalls and Best Practices to Overcome Them

EDI Implementation Pitfalls

EDI implementation can pose several unforeseen hurdles and slow down the process of EDI adoption. For every new EDI project that comes to us, we perform an analysis and review and based on the results, we share an estimated time for the project to go live. Unfortunately, despite doing an analysis, we often see companies struggle to meet their deadlines. We have prepared a list of the factors that are responsible for this delay. They range from the lack of planning to changes in business priorities.  

We have seen so many EDI implementation obstacles come up over the years. We hope that putting together this list will help our prospects plan better and benefit from these past experiences. You can consider this as an EDI solution implementation guide for Microsoft Dynamics 365 Finance & Supply Chain ERP. We also share best practices in this blog to keep in mind to better plan and set timelines for your project. 

Before jumping into the pitfalls, there is one big recommendation for organizations implementing Microsoft Dynamics 365 Finance & Supply Change Management or are early in the process.  

It is likely that your business processes are not clearly defined and could change. This could impact your EDI implementation. In our experience, businesses that start implementing EDI earlier in the D365 implementation when business processes are more fluid and less defined, will most likely have more changes and take longer to go live. However, organizations that are already live with D365 F&SCM have a less complex EDI implementation in comparison to organizations still going live. Having said that you can implement an EDI solution while implementing D365 F&SCM but will need to be more flexible with the timelines.

10 Pitfalls you can anticipate during EDI implementation

1. Readiness  

If you don’t have a great plan, most likely your team will set out unrealistic timelines. The implementation will then cost you more than you had estimated since you haven’t charted the right course of action for this project.   

Customer readiness in our experience can prolong projects. A clear plan that defines the scope of work, the list of trading partners, compliance guidelines, and business processes surrounding the EDI integrations needs to be clearly defined. So, for example, if you need to process sales orders, the EDI solution provider needs to know the required fields that the document needs to be able to process the message. They also need to be aware of the triggers, and the data that needs to be sent. This needs to be clear from the beginning of the project. Once the business process is clear, the EDI provider can take the next steps and set up the required automation, work on the fields that need to be populated, and the data that needs to be sent. It is also important that the environment that the EDI implementation team has to work on has complete master data for testing and configuration purposes. 

2. Participation of the D365 implementation partner

The EDI Solution Provider is dependent on the customer’s business processes to set up the solution. The reason why the ERP implementation partner needs to participate in the EDI project is because they are building D365 F&SCM based on the customer’s business processes. The EDI solution provider's expertise is limited to the EDI solution, they cannot step in for any ERP implementation requirements or changes that might be anticipated in the business processes. For example, for EDI, trading partners expect to receive and send out specific data for a sales order. They have a format of all the data that needs to be sent. It could happen that based on the specifications of that partner, for example, Amazon, or Walmart, some fields need to be customized as they are not standard fields in D365. So, if the EDI solution partner uses the standard mapping logic available in D365 F&SCM, that data will not map because there is no receiving field. So, the D365 partner needs to be available for such requirements. 

If you are in your design phase and if you are changing things in your Dynamics 365 implementation that means the EDI solution provider also has to change things. It could reach a point where your business processes need to be customized to meet your business needs. In such a scenario, your ERP partner will need to step in. The EDI solution provider can automate your manual EDI processes, but the D365 implementation partner is responsible for these processes. The EDI partner needs support from your internal EDI team to understand what needs to be automated. If you are still working on the business process with your D365 partner though, your key users might not have the full knowledge and you will need your EDI solution provider and D365 implementation partner to collaborate and be better aligned. 

In the scenario when you are already live and using Dynamics 365, assuming your team is knowledgeable of the existing business processes, the participation of the ERP partner is not necessary. The partner will only need to be involved if you need to make any customizations. 

3. Participation of all stakeholders from the start of the project

When the ERP and IT team work on the EDI requirements and do not have a full view of all the business processes, they might not be able to share the complete picture with the EDI solution provider. Involving the whole team at the time of planning and training will help you plan better and have a smoother implementation.  

When you don’t have teams communicating, such as the business teams and IT, and only involve IT teams during planning, training, and implementation, it will present challenges. You cannot go live unless your business teams are trained and can manage errors or there will always be a dependence on the IT team. Additionally, you might not have all the EDI documents set up as you did not include functional and technical team members during the planning and implementation stage.  

EDI implementation requires knowledge of implementation and an understanding of how the EDI needs to be tailored to suit your business needs. A partner or external consultant might have technical knowledge but will have no information or experience of your organization’s business processes and EDI requirements. Additionally, ensuring you have the right team members and expertise assigned the responsibility to validate processes will make the implementation smoother.  

4. EDI formats and number of trading partners

Although EDI standards are regulated, you might have trading partners in different countries/regions, and that can complicate the EDI implementation for you as region/country-based standards are more difficult to implement. You need to spend more time understanding your trading partner’s specifications compared to message specifications.  

If you have several trading partners, each with unique specifications, you might need to customize each message for every trading partner. Here the number of trading partners impacts the implementation time as the more the trading partners and messages, the higher the number of customizations.  

Understanding this and checking if your EDI Provider is aware of these country/region-based standards prior to implementation will help you evaluate the EDI partner’s capabilities. Complexity and duration can be impacted depending on the number of trading partners. If your supply chain involves several business partners each of whom has different business requirements for EDI, then you might have issues and delays unless you streamline EDI and set up a process. 

5. Technical compatibility issues

If you use legacy systems in your warehouse and buy cloud-based EDI and want to integrate your ERP and warehouse management system, it might present challenges as you will need to hire an integration specialist. This should be considered before the implementation of the EDI solution. You need to check if the solution works for your organization and whether the EDI solution provider can help you resolve your business challenges. 

6. Data governance 

Lack of validity and inaccurate data can result in the rejection of EDI documents or even compliance issues. As you scale and have to meet the requirements of more business partners, perhaps in different formats or new EDI documents, your solution provider and EDI partner need to be flexible and capable enough of supporting your business requirements. Additionally, it might be the right time to consider data governance to improve data quality. The more trading partners you consider, the more complex the project becomes. 

7. Test plan with scenarios 

Sending out EDI documents without adequately testing the system and setting up a process can harm your relationships with trading partners and lead to issues and errors. If you rush testing and haven’t had time to identify risks and potential problems, they will only amplify when you go live.  

The test plan needs to be available when the EDI Providers need to work on the business requirements. If you do not work on a test plan at the beginning of a project and work on trial and error and add test scenarios as you go, it will delay your project or cause issues after the implementation. If you do not have a well-thought-out test plan with a list of every possible test scenario based on your EDI requirements at the start of the project and later realize that something needs to be designed or changed at a later stage, then that increases the time to go live. So, if this is done at the start of the project it will be easier to meet go-live dates.  

8. Lack of change management

Any new process or solution needs to include change management as part of its plan to ensure an organization-wide adoption. If employees feel threatened by process automation, ensuring communication about this change is crucial to ease EDI implementation. If there is no communication and training to facilitate change management, it will delay implementation and the solution's adoption.  

9. Implementing an incorrect EDI scenario

You could use a VAN/Broker or a Hybrid EDI Integration approach if you want to manage EDI partially in-house. Or you could use a Direct or an Indirect EDI Integration approach if you want to manage EDI completely in-house or then via a VAN/broker if you are planning to use the Indirect EDI approach. If you have not made the right choice, you could be stressing out your team, and also causing delays as your EDI process will take longer to set up as you have to change your EDI scenario.  

To explain this, let’s take the Direct EDI Integration approach as an example. In this scenario, you omit the VAN partner and have to set up and maintain those connections in-house. If you have 10 trading partners and 1 message, the EDI solution provider will need to build 10 messages. If the customer requires multiple documents in the same scenario, for example, sales process, invoice, and sales order, then the team will need to build 30 messages and that takes more time and increases the cost of implementation. If you use a VAN, then the EDI Solution Provider needs to implement just one message for each EDI document and the VAN needs to then distribute that message to the 10 trading partners.  

10. Limited scalability and flexibility 

Some EDI solutions might not be able to scale as your company expands and you need to add on more legal entities in D365 F&SCM, messages, and trading partners. If you need some customization or development of a message, it might be difficult to work with the EDI provider and you might need to hire developers which will delay your project and also considerably increase the cost. So, it would be best to clearly explain your business requirements about the EDI messages so that you are not hit with this blocker after you begin implementing the new EDI solution. 

Best practices for EDI implementation

1. Ensure compliance 

Focus on each trading partner’s specifications. Every trading partner, especially big retail giants, provide a document that outlines in detail what their expectations are for each EDI document. If your EDI output does not corroborate with the specs listed by them then they will reject it. So, it is important to study the EDI specifications of each trading partner and ensure that your EDI output equals their EDI expectations 100%. There might be some fields or data that the trading partner expects that might not exist in D365 F&SCM. You then need to involve your ERP implementation partner and add those fields to your D365 environment. So, if you identify the needs of the trading partners at the start of the project, the EDI solution implementation will go quicker. The assigned EDI team should take responsibility for this task during the planning stage. 

2. Planning for testing 

The first thing is to work on the test plan from the beginning of the implementation. So, this should be solid covering all the scenarios that you anticipate experiencing. Every scenario in the test plan needs to be passed. Second is that your key users or end users should be trained. And the environment and your production protocol should be set up.  

We recommend focusing on testing especially if you have a complex EDI scenario. Besides internal testing, it is also important to conduct testing with your trading partners. And your partners need to verify that your EDI data is correct.  

3. Testing and go-live readiness

Let's assume that you have not tested all your scenarios and want to go live. In such a situation, if one of your trading partners receives incorrect information, it can become a compliance issue and they can levy a fine. We recommend that you do not go live without testing all your scenarios. But if you haven’t tested all your scenarios and the implications of delaying go live are worse, you can always go live partially. And manually send out the EDI messages that you haven’t adequately tested.  

There are several phases in testing. In the implementation phase, the EDI solution provider will run the unit testing with your functional consultants. The unit and functional testing is conducted during the building stage. Once that is done and acceptable, next comes Systems Integration Testing (SIT) and User Acceptance Testing (UAT). Different organizations might use different terms for the testing. SIT checks the compatibility of the solution with the environments and UAT is focused on testing the scenarios. It is like the dress rehearsal for production. 

How can an organization assess its readiness to go live? When all scenarios are tested, key users and end users are tested, all technical aspects tick off and the environment is ready, the trading partners are also tested, that is your green signal to go live. 

4. Communicate changes to your EDI provider

If you have a clear test scenario or scope defined and shared with your EDI partner, and then decide to make changes to the processes, the developments need to be communicated to your EDI partner. If these changes impact the EDI solution implementation, you can discuss and figure out the best way forward. But if you make changes and forget to share this with your EDI solution provider, it is possible that the integrations won’t work even after the implementation.  

5. Communicate internally 

If you are going to change systems, the best practice is to communicate that change internally very clearly. Alongside plan a training schedule for employees before testing or implementation to ensure a smooth transition to the new EDI solution. 

6. Set up processes for error management

The responsible people will need to have the D365 F&SCM screen active and running at all times to ensure they don’t miss out on errors and this needs to be part of their day-to-day tasks to monitor the accuracy of orders. Dynamics 365 will show all the orders/documents in the system with the status of each EDI message alongside. Prior to implementation, they can check if they want to set up a process for error notifications.  

7. Maintain documentation

If an employee goes on sudden leave or decides to exit your company and even on the EDI solution provider’s side if there are changes, and there is no documentation to refer to then it can be extremely challenging. If there is no recorded history of the project, it will be impossible for the new team members or consultants to catch up. After implementation, if documentation has been maintained and there are any issues, it can also be used for troubleshooting and will be easier for the support team to find a resolution faster. In case there is no documentation they need to check with the consultants who worked on implementing the project and also the internal EDI team and then try and find a solution based on the information shared with them. You should begin the documentation process phase when you are analyzing your business processes. Additionally, your D365 partners should also be creating their functional design documents so that the EDI solution providers can understand how the EDI solution needs to be implemented. 

8. Complexity

If you have a very complex EDI scenario, you need to present and communicate your business challenges and processes with your EDI solution provider while involving your ERP implementation partner. Next, these can be considered in the analysis phase and if there are any gaps, they can be addressed. Questions about customizations, or any other workarounds can be discussed with both partners and the best resolution can be worked out in close collaboration between all parties. 

9. Evaluate the maturity of processes in D365

As we mentioned earlier in this blog, the later you are in your D365 implementation, the easier your EDI implementation will be as your business processes will be better defined and changes are likely to be minimal. When you decide to make changes to business processes that impact EDI, then the EDI Provider needs to be informed as they might need to make changes too.   

So ideally, if you start the project scope with the EDI solution provider, they might offer an analysis that could last anywhere between 8 to 40 hours. During this time, you need to translate your business requirements, your goals, and your project scope, keeping in mind how well your business processes are defined at the moment. The EDI solution provider will share a timeline for the project based on this analysis. Any changes made in the middle or after the EDI implementation work begins will impact EDI go-live timelines.  

10. Level of expertise

The EDI solution provider will need an internal EDI team that they can reach out to for any knowledge sharing and required clarifications about the business processes and technical systems. You need to identify a mix of functional and technical key team members who are knowledgeable and can explain your organization’s business processes to the external EDI consultant.  

11. Standards

During the planning phase, it is important to reach out to every trading partner and understand the standards and specifications. It is also important to understand the tax rules and industry regulations during this phase. This review will help you understand if you would need any customizations and then you can reach out to your D365 F&SCM implementation partner and EDI provider and clarify your business processes and EDI requirements. 

Are you looking to implement an EDI solution for D365 F&SCM?

At To-Increase, we offer an EDI solution built within and for Microsoft Dynamics 365 Finance and Supply Chain Management – EDI Studio. Our no-code solution has been built for business users, empowering non-technical team members to track and monitor sales, and invoice transactions, and handle exceptions within the ERP. Since our solution has been built on our integration engine – Connectivity Studio, connecting to D365 F&SCM and integrating with other business systems is also easier.  

If you are considering migrating from a legacy on-premise ERP system to D365 F&SCM, our Data Migration Solution can help you transform, clean, and move all your transactional and EDI data without any development. 

We have helped 600+ customers streamline their business communication and synchronize data across their business systems using our Business Integration Solutions. If you are looking for an EDI solution that can help you fast-track your supply chain efficiency and simplify business document exchange between trading partners, reach out to our experts. If you are looking to understand how we helped our customers transform and modernize their EDI processes while moving to D365 F&SCM, download our case study from the link below.  

Read about how Walraven reduced their partner onboarding time from 4 months to 3 weeks using EDI Studio. 

Kaustubh Durve
Kaustubh Durve,
Kaustubh Durve,
Product Manager

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