I started work in the B2B and EDI industry almost a decade ago and many of the same EDI myths that were prevalent then are still common. Even in the face of a decade of evidence to the contrary, they seem to persist. In this blog, I want to address three of the most common myths about EDI.
Here are the top three EDI myths that I encounter:
- EDI is on the decline. The top myth by far is that EDI will disappear in favor of Internet standards such as XML and its variants or some unknown technology to be discovered. Though this notion comes up less often than it used to; however, this myth does not go away, even after years of continued EDI traffic growth. IBM Sterling Collaboration Network, which is IBM’s value added network, has seen year over year growth in traffic during the decade since I started working there.1 Additionally, companies continue to depend on EDI. Looking at 2013 research, 46% of the companies surveyed use EDI “heavily” with an additional 31% reporting "some: EDI usage2. On its face, this is an easy myth to bust; EDI has worked for decades and is deeply entrenched in companies and supply chains. And as the old saying goes “if it ain’t broke, don’t fix it.” I don’t see companies ripping and replacing EDI anytime in the foreseeable future. Sure companies will add on to EDI and complement it with newer technologies and formats, but EDI shows no signs of going away.
- The Internet will replace EDI. When the Internet and World Wide Web first came into wide usage, many industry commentators speculated that EDI could not be used with the EDI network technology. Nothing could be further from the truth. As we have seen the Internet is the communications backbone of choice for most current EDI systems. Instead of being incompatible with EDI or replacing it, the Internet has spurred growth in traffic and in EDI users, making it more accessible to more organizations.
- EDI is prohibitively expensive, and ROI is hard to achieve. As with any technology, EDI has start-up costs and a learning curve as companies get ramped up. Programming interfaces, creating maps and other upfront tasks can be more than new organizations expect when they first begin down the path to implementing EDI. However, that does not mean that return on investment (ROI) is difficult to achieve. Automating transactions that were done manually provides a significant savings on each transaction. For example, on average the cost savings from automating a manually processes purchase order is $9.89, for an invoice is $11.58 and a remittance is $12.963. So you can see the savings for each document transacted and when you multiply that savings by the number of manual documents that are automated, you understand how a positive ROI can be achieved.
1 Traffic growth calculated factoring out new clients and departing clients.
2 “2013 B2B and MFT Global Study for IBM”, Vanson Bourne, March 2013.
3“B2B Integration and Collaboration: Strategies for Building a ROI Business Case” Aberdeen Group, June 2011.