10 Factors to Consider While Evaluating an EDI Service Provider

You are here because you probably understand the basics of EDI or Electronic Data Interchange and how it can help you streamline and ease communications with your trading partners and within the organization. However, the next steps can be challenging as there are a myriad of options to choose from and you are also evaluating what kind of EDI solution best suits your business.

Before we dive into the factors to consider we cover some frequently asked questions about EDI implementation.

EDI implementation

You might be considering the kind of implementation best suited for your business, big or small. You probably have questions such as:

Should I use an in-house integrated EDI program?

If you have the resources and find a SaaS solution that works for your organization, then an integrated EDI solution can help you remarkably streamline the communication process while having full visibility of all your data.

However, you will be looking at investing in an EDI software, mapping and translation add-on, a team to manage EDI and support any upgrades or requirements around EDI.

Would my organization benefit from an externally managed EDI platform or a service provider?

If you decide outsourcing the process is the way for you, then your EDI provider is responsible for everything from customer support to translation of EDI messages.

You will have many more questions as you go. But it is essential to note them down and check with the list of EDI vendors that you are evaluating before you make a decision.

In our experience over the last 16+ years as a renowned EDI solution provider, we elaborate on 10 factors shared by our customers that have helped them evaluate their shortlisted top EDI providers.

The 10 factors to consider while evaluating an EDI service provider

1. What connections and integrations are supported?

There are a lot of connection possibilities within the solution. So, you need to evaluate what kind of connections your business needs and cross-check whether the EDI Solution provider can help you with those.

Next, you need to consider what kind of integrations you need between your ERP and business systems and EDI. Evaluate if you need to update your ERP system especially if you are looking at an integrated solution.

We recommend an integrated solution within the ERP as that is easier to manage and track rather than having isolated islands of technology that will be needed to be connected with another piece of software. Once you decide on this factor, check whether the solution is within the ERP or outside and if it is capable of integrating with your ERP.

2. Do you prefer an on-premise or cloud-based EDI solution?

The set-up of on-premise EDI requires you to have EDI specialists in-house besides the infrastructure to support the implementation. Therefore, this kind of deployment works for businesses with a low number of trading partners and ideally trading partners using the same EDI standards and formats.  

In the case of Cloud-based EDI, the process takes place over an external network. This kind of EDI setup works for businesses that have no EDI experience or in-house resources to manage EDI transactions, organizations with several trading partner connections in various formats and standards and also for businesses looking for more scalability.

Once you decide, you need to check with the list of EDI providers how their solution works and whether that works for you. Whichever path you choose, make sure the solution is capable of integrating with your current and future infrastructure.

3. What pricing model works best for you?

Pricing is usually the deciding factor for most businesses. Most EDI Providers offer three pricing models such as pay-as-you-go, monthly or annual. If you decide to use an embedded solution in-house, most EDI service providers charge you an annual fee. However, if you decide to go down the VAN Provider route that offers everything from EDI mapping to translation, then you have to pay per transaction.

When you do discuss pricing with your EDI provider, check on any hidden or additional charges such as character limits, free VAN service, EDI mapping, or record lengths. If you are dealing with large amounts of data exchange, it might be better to look at all-inclusive packages.

So, to narrow down pricing you need to first assess the volume of your data exchange. That way you can select the pricing model that best suits your business scenario.

4. Does the EDI provider offer a secure platform?

Security is a growing concern as cyber-attacks can disrupt business stability and lead to losses. So, it is important to ensure that the EDI provider has a secure platform as you will be exchanging crucial documents with your business partners using EDI. Also, ask for proof of accreditations and certifications.

5. Which EDI offerings are available with the software?

Outdated EDI technology that requires manual entry processing doesn’t work very well as your company scales and business transactions increase. An EDI solution that has pre-configured maps can ease the process of data exchange. For example, an EDI user posts a packing slip, the system figures out the format and the correct EDI message is processed and sent in the background to the correct trading partner.

As a best practice, check with your business partners on the kind of formats used. Then you can check with the EDI provider on the different types of formats provided with their solution. Additionally, it is also important to check whether the translation services will be provided during imports or exports for your customers or vendors’ documents that you receive.

6. How much customer support and downtime can you expect?

If the EDI solution is down then that can prevent you from receiving or sending important documents so this becomes an important aspect to evaluate. For example, you receive a sales order and you need to send out an agreement but if the customer doesn’t get a response, then that could lead to a business loss. Make sure that your EDI agreement states response times to protect your business from downtime, to ensure you can minimize SLA fines and penalties.

You probably have an idea of the downtime that would be okay for you to manage. But you do need to check what kind of backup and processes the EDI solution has in place in such a situation. Also do clarify, if any kind of support is expected from your teams during a downtime.

Another crucial thing to consider is round-the-clock support to ensure business continuity especially if you have global operations working in different time zones. Also, this means you will need EDI translation services if there are different formats in use in different regions within the organization.

7. Is the EDI vendor customer-focused? And is the solution user-friendly?

While you check with the EDI provider for a demo, also check on available resources and their processes to address issues and concerns during and post-implementation. If you think you need certain customizations, check if that is possible with the EDI vendor.

EDI mapping and data management should be easy in an automated platform and streamlined so that you don’t have to spend any time sorting out data manually. It should be easy for you to add business partners and use the solution. For example, our customers often share feedback on tutorials embedded in the EDI Solution, as it makes onboarding a breeze.

8. Does the EDI provider have relevant experience in your industry?

EDI has been able to streamline communications remarkably for various industries, thanks to the standard formats that exist. And standard formats vary in the automotive industry for example compared to food or retail. An EDI provider that has experience in your industry will already understand the format and have existing connections for your trading partners in your industry circle.

9. Can the EDI solution scale as you grow? 

A good EDI solution should be able to let you extend or increase the number of EDI business relations such as customers, vendors, or warehouses with ease. So, if you decide to scale your business, the solution should be able to handle the changes. Additionally, when you implement the solution, the EDI provider that offers an expedited onboarding process for all your vendors and customers can help you get started with EDI quickly.

10. Do you need any add-on services?

What is your EDI provider providing besides the EDI solution? For example, is integration with your ERP included, data mapping and EDI translation if required? Having to go to multiple vendors for EDI can be time-consuming and frustrating for you.

As your business scales, if you decide you need an additional service like Master Data Management for instance, in the future, can your EDI service provider help you with that, and can the software easily integrate with those add-on solutions?

The last step in vetting any EDI partner

The most important step after considering the top 10 factors is to check for references of past implementations. Once you learn about other companies and their experiences and challenges, it might be easier to make a decision. After all, a well-implemented EDI solution can help you reap several benefits such as improved processing time, cost savings and accelerated growth.

Our recommendation

At To-Increase, we highly recommend implementing an integrated solution as an EDI software integrated with your ERP system can truly help you ease business communications. Implementing an integrated EDI solution can help you reduce costs while improving the speed of data exchange and the overall accuracy of your data.

An embedded solution that is built within the Dynamics 365 ERP, such as EDI Studio has even more advantages than a standalone integrated EDI solution. An embedded solution gives you a holistic view of all your EDI transactions, automates the entire EDI process and simplifies troubleshooting. Besides, being embedded within the ERP means there is no need to log out of the ERP system. If you currently use Microsoft Dynamics 365 or are considering migrating to the ERP, then as a next step we recommend reading our blog that explains the benefits of investing in an embedded solution and download our infographic below.