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EDI Saves Time and Money

Most people working directly with vendors and customers have heard the term, “EDI”. The acronym simply means “Electronic Data Interchange”, which is just a way to communicate business information between your business’ information to another business. Most trading partners today provide avenues for your business to send information such as purchase orders, invoices, product availability or expected delivery dates in one electronic format or another.

Most people working directly with vendors and customers have heard the term, “EDI”. The acronym simply means “Electronic Data Interchange”, which is just a way to communicate business information between your business’ information to another business. Most trading partners today provide avenues for your business to send information such as purchase orders, invoices, product availability or expected delivery dates in one electronic format or another.

The original EDI software solutions were created to allow customers to securely communicate with their vendors. The vendors install software on the client’s machines that creates the secure connection needed to communicate. The client can then login and send data to the vendor by adhering to certain standards established by the vendor. This method of data exchange still exists, but is losing favor due to newer options that are simpler and less costly to implement.

One of the most common ways for two companies to communicate is via “FTP”, or “File Transfer Protocol”. This approach requires one company to upload files to a secure location locked down by username and password. Usually FTP transfers are the simplest way to communicate, however, there are typically manual steps involved to create the files needing to be uploaded. This could be a one way communication, such as requiring one of your users to run a report and send to the vendor using an FTP client program, or it could be bi-directional, also requiring your users to monitor a folder for files sent back from the vendor.

Another way that is becoming increasingly accepted to transmit data is through the use of “Web Services”. This method of communication is more tightly integrated between both companies as one will define standards for communicating in a programmatic way and the other company simply will implement those standards through their own software. Web Services can eliminate any potential user errors by not requiring manual manipulation of files before information is exchanged between your company and others.

All of the approaches provide benefits of reduced manual work and better, more accurate information exchanges with the companies you work with. The best solution for your organization depends upon your current user and office situation and what your goals are in the types of communication you are providing. In one case, a report that is run daily may be best suited for either an automated FTP upload by a system or a web service communication, but on the other hand, an availability report that has to be uploaded only weekly may be best suited to be handled by the staff with an FTP client connection to the vendor directly. Also to keep in mind that some vendors prefer to use one method over another, so it is best to discuss with the company you plan to exchange information with and pick the approach that is best for both of you.

At IAS, we’ve worked with each solution with great success. We’ve even written custom solutions for customers that required a tighter integration than the “out-of-the-box” features provided. If this sounds like something your company needs or even if you have any questions about your company’s current EDI setups, please feel free to contact us. We are more than happy to talk with you and your vendors or customers to provide the best solution that gives everyone the clearest view of the data that drives your business.