Why should you give up on your outdated interactions and analogic processes today?
The world is moving, and so should your business. The ongoing health crisis has shown us that we need to cope with the new normality and find ways to continue existing and even thrive. The same goes for the businesses, as technology has (re)shaped all known human domains and industries, spurring economic development.
The same McKinsey research shows that 50% of today’s work activities could be automated by 2050, as the next-level process automation and vizualization trend continues to grow. So the question is: where do you position yourself in the next decade’s big picture?
Automation is addictive and its benefits are countless: from tangible cost savings to data transparency and real-time availability while streamlining processes to stimulate business growth. It allows continuous enrichment and process improvements and stimulates others which get pulled into its fast spinning. Within the B2B industry, there has been a long time standard for doing business with other organizations. A standard that remains today and for years to come, which is fundamental to automation and digital transformation.
That standard is EDI.
What does EDI stand for and why is it important for your business?
So, if you want to start off on the right foot your journey to automation, you will have to consider getting rid of the „paper”. Why? Because paper destroys even the most carefully planned out processes and is a liability. Paper documents cost hundreds of hours to fill in, and hundreds of euros to transport and store. Worse yet, paper or image document errors can easily disrupt your business processes and your partners’. This is where “EDI” comes in.
EDI, which stands for electronic data interchange, is the intercompany communication of business documents in a standard format. This standard electronic format replaces paper-based documents such as purchase orders or invoices.
Before EDI, business was done by moving paper-based documents, which would consume huge amounts of time and resources and could not provide the flexibility that an electronic exchange would. This is the “traditional” invoice cycle i.e. the transfer of information from your back-end computer system to your supplier’s back-end system: from one ERP to another ERP, or from one accounting solution to another accounting solution.
By nature, EDI replaces postal mail, fax, and email, which burden organizations with more manual work, lost revenue and more errors. EDI electronically sends and receives documents in a structured format according to a defined set of standards established between you and your trading partners and creates a secure and paperless way to directly connect to them. Any EDI transaction document must contain a specific amount of vital data.
The first step is to digitize your data – meaning that all the information available on paper will be transposed into a digital format, so that it can be stored, processed, and transmitted on a computer. This process is also called „dematerialization” or “digitization”. Digitization is performed through a series of actions such as: receiving the document, sorting and indexing it, scanning, OCR – Optical Character Recognition (a technology by which the scanned text is transformed into an image, which in turn is analyzed automatically for character recognition), fiscal and custom validations, and finally export to business applications or electronic archive.
Companies across the world rely on EDI for their important B2B data exchanges because it’s a standardized and effective way to communicate with all the members of their business ecosystem i.e. all the trading partners such as customers, suppliers, vendors, and other entities. By automating paper-based transactions, organizations can save time and eliminate costly errors caused by manual processing.
According to this Aberdeen’s report, investing in automation significantly reduces the turnaround time, while increasing the exactness of invoice processing. 46% of the companies leaders in automation are following the strategy to invest in the automation of invoice receipt and workflow processes with the purpose to increase processing time, decrease the invoice processing error rate and increase the on-time payment rate.
EDI is evolving
Disruptions affect supply chains in different ways. For this, you would need modern EDI solutions, able to help you quickly adapt to the ever-changing landscape and pace of how business partners exchange transactional documents. Expanding EDI with application programming interface (API) capabilities or connectors enables a more flexible B2B integration approach with your partners. APIs and connectors facilitate a direct linkage to a transactional system, like an ERP. At the same time, modern EDIs are already programmed to integrate with multiple ERPs, making the data transfer path simpler since the intermediary file transfer server and associated processes are eliminated.
Benefits of modern EDI
“So, what’s in it for me?”, you would ask… Implementing a modern, cloud-based EDI or migrating to a cloud-based one, will enable you to:
- Save time and money: reduce low value-added manual tasks and save on invoice processing, data controls, exception management and physical document disposal.
- Improve data accuracy: no more manual data entry. As a rule, manual data entry will result in errors as data is erroneously entered. Even if 1% of orders are entered incorrectly, those misplaced values will create headaches for the entire organization.
- Speed up sales and purchasing cycles: reduce processing time. When you can automatically exchange transactional documents with your trading partners in minutes instead of days, your organization can complete business cycles faster.
- Gain visibility and compliance: gain real-time visibility into your processes and compliance throughout the entire business ecosystem. Both you and your partners will know when a document has been created, sent or approved.
- Improve relationships with your business partners: working in a common language and resolving disputes faster (fewer exceptions, errors or complaints).
Then and now…
Along the history, EDI has facilitated “frictionless” commerce, helped to eliminate manual paper processes, and streamlined supply chain efficiencies through automation. It will remain widely used in its established areas for years to come and is definitely here to stay.
DocProcess has developed one intelligent, customizable modern EDI platform to help you digitize every interaction, document and process and join the dots within your business ecosystem. BEA is a SaaS cloud platform, flexible and easy-to-integrate as it is able to support over 200 ERPs and accounting softwares. Our modular solutions are completely platform-agnostic and can be used by businesses regardless of their size, type, or technical capabilities. We help you stay on top of your business and unlock the opportunities that lie inside your ecosystem.
Succeeding in doing business nowadays is like riding on a merry-go-round: to remain enthusiastic and on top of things, you must keep moving and adapting to the new normality of life.