Outsourcing EDI: What is EDI outsourcing and why do businesses need it?

What is EDI outsourcing?

An outsourced ED service is any type of EDI service where a third party handles the process of using EDI to communicate data between suppliers and trading partners. Implementing and managing EDI capability in-house can be a complex and time consuming task. For many small and midsize companies, outsourcing EDI is an easy, affordable and more time saving option. Most companies now use EDI for electronically exchanging business documents with their suppliers and customers. Outsource EDI is also known as cloud EDI or full-service EDI. Many now require their trading partners to be EDI compliant as a condition for:

• doing business with them
• for taking a business relationship to the "next level"
• for getting paid more quickly
• for considering a new vendor application

There are three major ways to outsource your EDI:

• Total EDI outsourcing
• Customer and supplier on boarding
• EDI service bureaus

Total EDI Outsourcing:

Using this option, an organization outsourcing their entire EDI process to a fully managed service provider (third party). A fully managed service provider offers cloud-based service so that organization does not require any component such as purchase software or hardware, IT resources, Manual data entry. The provider manages all your day-to-day EDI messaging, EDI integration with your ERP and other systems, translation, communication and technology. You are charged based on the number of transactions & trading partners and points used.

EDI Outsourcing with Service Bureaus:

Service bureau is the most common type of EDI outsourcing among most of the smaller companies. Small companies choose this option as a means of ensuring EDI compliance when they trade with a large manufacturer or retailer. Service bureau is the best option for low-volume suppliers using it for short-term.

Customer and supplier onboarding:

onboarding: It is a very appropriate choice for enterprises that lack capabilities and resources to manage EDI and outsourcing EDI is an easier and simpler option for them to share their EDI requirements with others. With this model enterprise uses EDI outsourcing for its "onboarding" purpose. Customer and supplier onboarding process helps to make a supplier EDI compliant.

Checklist to evaluate an EDI outsourcing provider:

Suppliers that outsource EDI (Electronic Data Interchange) to a third party ensure that they enhance internal processes without the need for on-site infrastructure or expertise by leveraging the capacity of a team of EDI experts.

• Can your outsourcing partner integrate directly with your existing ERP system?
• Can your outsourcing partner fulfill all your trading partners needs such as communication protocols and documents?
• What payment structure is Best for your Company?
• What kind of support system does outsourcing partner offer?
• WDoes your outsourcing partner fulfill your technical needs such as mapping, onboarding, and training?
• Does your outsourcing partner have experience in relevant industries or are they new in the industries?
• Can the outsourcing partner be capable of working with your online e-commerce platforms?
• Can the outsourcing partner establish connections with your 3PL’s and warehouse?

Benefits of EDI Outsourcing:

Gain significant cost and time savings by outsourcing all or part of your EDI department

• Make your company more responsive and proactive to trading partner requirements
• Tailored client solutions to satisfy all your EDI outsourcing requirements
• Specialist Mapping and Document delivery services
• Low Risk, Low cost, High Speed, Highly Secure and Fully Auditable Outsourcing

To learn more about how Infocon Systems can take care of your EDI needs for your business, please don’t hesitate to give us a call at +1 888-339-0722 or email sales@infoconn.com. We’d love to hear from you.