With the world of business digitally advancing by the day, many companies are using Electronic Data Interchange (EDI) for all their vital B2B communications. But, this technology holds a greater potential and can offer astonishing levels of automation through EDI integration solutions.In simple words, EDI is an exchange of business documents in a standard electronic format via the internet, between different trading partners. This system enables cost saving, lesser errors, faster processing, and improved partner or customer relationships in your organization. Business users and the IT department are the two main stakeholders in EDI automation.
- Business users (such as sales, purchase, logistics, and helpdesk teams) are ideally looking for all the required information that is easily accessible and maintainable. EDI integration can help them make informed decisions faster through accurate, intervention-free data.
- IT department’s main goal is to have happy business users who are capable of independently handling data issues so that the IT team can focus on other technical challenges. Also, they are looking to have easy, flexible, and configurable multi-purpose tools to manage new business needs efficiently.
Therefore, a flexible EDI solution that can be set up in different ways and scenarios would be considered ideal. In this blog, we’ll talk in detail about the three types of EDI integration, based on different business scenarios.
- Direct EDI integration
A direct EDI integration involves a direct connection through the internet between your ERP and your business partners using a specific protocol. However, the business partners can include your customers, suppliers, and maybe the logistic service providers too. That can mean managing thousands of connections individually, which can be a complex process without a standardized protocol in place. Direct EDI integration can be ideal for heavy integrations that require a lot of data going back and forth.
2. Indirect EDI Integration
An indirect EDI integration is the exchange of communication via a broker or value-added network (VAN), between your ERP and customers, suppliers, or 3PL. First, the message, with all the information you need from your partners, goes out from your ERP to the broker or VAN. The broker splits the message further in different formats as preferred by your customers or suppliers and sends it to them.
3. Hybrid EDI integration
Some companies prefer both indirect as well as direct EDI integration. Such an EDI that enables you to exchange messages, directly and indirectly, is known as the hybrid EDI integration. In this type, you will need to be flexible in several areas of the integration process and have the knowledge and tools to do so.
The second version of the hybrid type leverages the non-EDI communication to enable integration with customers that are not familiar with EDI. A lot can be done using non-EDI communication too. For instance, many brokers or VANs exchange messages via other types of communication, such as email with a PDF or excel in it. This can enable the non-EDI capable partners to, maybe, send an email with order details, which the broker can translate into the existing data connection. As a result, the ERP gets to exchange all the order documents through the same channel—a true digital transformation.