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EDI – What should I look out for?

EDI stands for “Electronic Data Interchange”, a type of electronic transfer of business data, which has been in use for many years.

The basic idea behind EDI is the direct transfer and processing of data without human intervention. For example, a purchase order is automatically entered as an order in the supplier’s IT system. This eliminates the typical work steps during which the file must be opened and the contents transferred manually, etc. In addition to the huge cost savings and time savings, the risk of errors during data entry is also reduced considerably by the elimination of the manual steps. Processes such as ordering and order processing can be carried out quickly and smoothly. Sender and recipient benefit equally. 

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What should you look out for when selecting an EDI solution?

Does the solution support all transfer protocols, data formats, EDI subsets? Previously common standards have increasingly been replaced by new protocols such as AS2 and OFTP2. In particular, larger companies frequently push their partners to switch to the new protocols and data formats, even though most of the EDI solutions only cover a fraction of the standards. 

If sender and recipient use different data formats, the message must be converted in an intermediate step. This conversion of messages from one format to another is referred to as mapping. If deviations occur during mapping, problems are inevitable. Most EDI solutions are similar to a black box, which enables you to transfer data over and back but where the intermediate steps remain unseen. If purchase orders do not arrive at the supplier, troubleshooting can be a drawn out and tedious process.

Should I take the risk of incalculable costs, for example, using a transaction-based pricing model?

Many EDI providers base their pricing structure on the number or size of the sent or received messages. This frequently sounds attractive to customers at the outset but these offers can quickly turn out to be very expensive. In many cases, the volume of EDI data transfer increases unexpectedly. If, for example, purchase orders to one supplier have previously been bundled and sent as one collective order, but now the supplier wants a separate notification for each order, the costs can quickly multiply.

Our advice:

Companies who are looking for suitable EDI software should pay special attention to the protocols supported. In the coming years, protocols such as EDIFACT, OFTP2 and the AS protocols and formats (variants AS1 to AS4) will likely continue to be widely used. However, both the universal formats and the industrial standards in the relevant sectors are important. This applies especially to the industrial sector with its many special formats. 

With regard to pricing structures, flat-rate offers with unvarying costs are preferable to transaction-based models. If the costs are clearly defined in advance, and if they remain constant during the term of the contract, then EDI solutions are usually the most efficient and most economical option for large-scale data exchange. 

Check out the EDI solution from Scheer PAS:

  • All common data formats are included as templates. 
  • Thanks to simple administration and monitoring of the entire electronic communication, maximum transparency is achieved. 
  • The solution supports diverse message formats such as XML, CSV, SAP IDoc, X12, UN/EDIFACT formats and EDIFACT subsets as well as industry-specific standards. 
  • All endpoints can be used if the partner is using one of the message protocols for data transfer that are listed below: 
  • EDI data transfer: AS1, AS2, AS3, AS4, OFTP2, FTP, FTPS, SFTP, SMTP, SMTPS, RNIF 2.0 
  • Encryption method: 3DES, DES, AESCBC128, AESCBC192, AESCBC256 
  • Signatures: SHA1, SHA256, MD5 

Also, the complex requirements for archiving of incoming and outgoing messages and the retrievability of archived messages can be implemented. Numerous predefined archive functions, integrated mapping rules and the configuration of retention periods enable maximum flexibility when implementing internal archiving requirements. External archiving solutions can also be integrated. And also, communication via EDI can be controlled and evaluated via user-friendly monitoring. 

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Patric Schuh, Account Manager Scheer PAS
Patric Schuh
Account Manager
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