Today, most businesses rely on electronic data interchange (EDI) to exchange documents among trading partners. There is enough research to show that EDI costs just one-third of its paper-based equivalent. A prominent American company reported a reduction in its order processing costs from $38/order to $1.35/order with EDI.
Do you know that EDI we take for granted now was not available a few decades ago? Can you imagine how the world before EDI looked like?
Businesses relied on the manual exchange of paper-based documents, a method that was cumbersome and error-prone. Documents such as invoices, purchase orders, and receipts were exchanged through faxes or traditional mail. Human input was required not only in data entry but also in document transmission. This process took more time and could not keep up with the demands of modern business.
How Did the Introduction of EDI Help Organizations?
By introducing EDI, organizations were able to overcome all the limitations of the manual data interchange process. The EDI software solution facilitated the exchange of important documents, invoices, and other information across various platforms and systems.
EDI digitized the process of document exchange, removing most human intervention. It accelerated the process and increased document security.
Real-time visibility into transactions enables faster decision-making. There is also improved responsiveness to the changing demands of the market and of the customers. Businesses are also able to shorten the lead time for new product delivery and product enhancements.
EDI helps organizations improve their supply chain visibility, and they benefit from faster, more accurate transactions. Retailers get to know what is being delivered to a store or warehouse in advance through an Advances Shipping Notice (ASN) from the supplier. Suppliers are able to send out invoices quickly and the payment is processed faster as the amount of paperwork involved is lesser.
In the long term, all the above factors collectively would help you save a lot of money and, in turn, increase your company’s profitability. If you haven’t already done so, it would be a good idea to review your existing business processes and determine the areas where your EDI implementation can deliver higher cost savings and maximize efficiencies.
You can always work with an EDI service provider to ensure trading partners implement a standardized approach to EDI. Streamline your EDI process with business integration solutions such as the EDI Studio for Dynamics 365 FO.
Get started on improving your business efficiency by learning about the benefits of EDI. Download this free factsheet for more details!