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While Electronic Data Interchange (EDI) has been in use since the late 1960s, there are still many organizations that use their existing legacy systems for processing B2B transactions. Traditional B2B transactions like Purchase Order, Sales Order, Invoice, Advance Ship Notice, and Functional Acknowledgement often involve a series of steps to process. And processing these transactions involves many paper documents and a great deal of human intervention, which makes them prone to mistakes and human errors. But with the use of EDI, paper documents are eliminated and human intervention is minimized. EDI enables organizations to automate the exchange of data between applications across a supply chain. This process ensures that business-critical data is sent on time. According to a market report by Dart Consulting, the estimated market size of EDI is expected to reach $1.68 billion by 2018, with projections reaching as high as $2.1 billion by 2020. But what are the advantages of EDI over traditional forms of business communication and information exchange? To better understand these benefits, let’s take a look at some of them: Lower operating costs
Improve business cycle speeds
Reduce human error and improve record accuracy
Increase business efficiency
Enhance transaction security
Paperless and environmentally friendly
While many businesses are enjoying the advantages of EDI, some companies are still hesitant to try it because of a few limitations. Limitations of EDIPerceived high upfront costs
Initial setup is time consuming
Too many standards
Investing in system protection
Robust data backups of systems
Despite being a decades-old technology, EDI continues to be the dominant protocol in the B2B world. EDI hasn’t changed much over the years, but the systems that exchange EDI documents between businesses have mostly moved to the cloud, become cheaper, easier to use, and more feature-rich. When considering EDI for the first time, it is important to weigh the advantages and disadvantages. But even more important is choosing the right provider that can help you get started and scale up as your business grows, while always committing to providing the most up-to-date features and security measures. If you would like to leverage EDI to streamline your operations, OpenText offers EDI solutions that let you efficiently, reliably, and securely share data across a wide variety of EDI message types and communications protocols. Connect with us to learn more.
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