Implementing Electronic Data Interchange (EDI)? Avoid Timing Pitfalls

by: The Knowledge Group

April 01, 2020


EDI is a communication technology that stands alone or complements ERP. EDI instantly and accurately relays orders. It carries communications to and from other computer users—in the same building, across the country, or around the globe. Here’s a brief reference guide.

What Is ERP?

Enterprise Resource Planning manages both internal and external resources of a business. It facilitates communication and decisions, consolidating operations and processes.

What Is EDI?

EDI supplants phone, fax, and e-mail systems. It’s an internet-based technology created to transmit electronic files within and among businesses, connecting people through one communication and database system. With EDI, orders can be quickly and accurately processed through the company’s accounting software. Overhead costs go down; customer service improves.

How Does EDI Complement ERP?

Combined ERP and EDI systems reduce the paperwork stream between businesses, effectively coordinating supply chain management and standardizing the delivery of orders, payment notices, and shipment verification. Many of today’s ERP systems come with EDI, and e-commerce companies also employ it.

Bringing EDI into ERP Effectively

Companies implementing ERP may spend months testing it throughout their departments. But if the company is not testing EDI at this critical time, yet its customers rely on EDI to send orders, there can be slowdowns later on: reconciling orders, modifications, or receipts, invoices, advance shipping notices (ASNs), or inventory tracking.

So, companies should consider:

  • Alerting EDI customers early in the implementation, so they work together in the testing phase.
  • Keeping their current system’s production data as material to test with.
  • Running full-cycle testing, comparing all types of production data.
  • Fixing mismatches immediately, with regression testing if necessary.
  • Anticipating the possibility of delay during this time.

Bottom line? There are good reasons to integrate EDI from the start and allow ample time to test.