The Definitive Guide
This is a complete guide to Internet EDI
In this in-depth guide you’ll learn:
- Definition of internet EDI
- Internet EDI vs other EDI solutions
- Internet EDI for small and medium businesses
- How internet EDI works
- Top 18 benefits of internet EDI
So if you’re ready to go “all in” with EDI, this guide is for you.
Let’s dive right in.
Internet EDI is more suitable for small to medium business, as it’s cost-effective, easy to manage, and require no prior EDI knowledge or any complicated software to be installed. The modern digital transformation is forcing many small to medium businesses to adapt to cloud-based solutions such as internet EDI which can be accessed from anywhere in the world with just a laptop and internet connection.
The Demand for cloud-based EDI solutions is skyrocketing with many small and medium-sized businesses are planning to invest in it and many large trading partners are forcing small businesses to use EDI to do business with them. With that in mind, it makes a lot more sense for smaller companies heavily focused on growth to turn to iPaaS providers like Commport Communications rather than integrate EDI in-house.
Introduction to Internet EDI
In this chapter, we will talk about following topics
- Definition of Internet EDI
- Internet EDI Technologies
- Internet EDI Communication
- Internet EDI Challenges
- Internet EDI Retailers / Trading Partners
Let’s dive right in.
1.1 Internet EDI Definition
Communication of EDI messages via the Internet. Internet EDI is most often considered in contrast to doing EDI via a VAN (Value Added Network). In this situation, Internet EDI is simply a communications pathway, where EDI data is passed between trading partners using Internet protocols.
Internet EDI is done via a variety of protocols, such as file transfer protocol (FTP), secure file transfer protocol with SFTP (SSH File Transfer Protocol) or FTPS (FTP over SSL), and AS2 (applicability statement 2)
Internet EDI also makes it easier for companies to conduct business electronically with smaller partners that don't have sophisticated IT infrastructures. Although traditional EDI requires each trading partner to install complex, proprietary software, Internet-based EDI lets companies conduct EDI through a Web browser or by installing basic client software.
Another advantage of Internet EDI is it lets a company migrate some of its partners to the Web while maintaining other proprietary connections in situations that demand it.
1.2 Internet EDI technologies
Whether you are just getting started in the world of Electronic Data Interchange or you have low-volume data exchange needs, Internet EDI is an economical solution that is easy to use.
Even smaller or mid-sized vendors need to be compliant with their large retail customers. Our Internet EDI enables you to get up and running with very little investment required as a low-cost option. All you need is an Internet connection and a web browser and you can begin exchanging EDI with your trading partners today.
The straightforward Internet EDI document interface is user-friendly and doesn’t require a lot of experience with EDI systems. It tailors the screen to include only the information requested by your trading partners. All forms include business rule validations and controls, ensuring effortless compliance with your trading partner’s EDI programs.
The basic operational aspect of Internet-based EDI is simply to use already existing communication protocols available on the Internet to exchange EDI data. For this reason Internet-based EDI uses SMTP (email), HTTPS, and Secure FTP communication protocols to exchange data. When using SMTP for Internet-based EDI the common terminology is AS1, while HTTPS is AS2 and Internet-based EDI through secure FTP is known as AS3.
1.3 Internet EDI Communication
Internet EDI will sometimes also be referred to as AS2 or AS3 EDI; these terms are simply the technical protocols used by Internet EDI to connect two trading partners. Internet EDI is becoming increasingly prevalent because the use of Internet EDI can provide significant cost savings over other more traditional means of EDI communication, such as modem connections to a VAN.
Internet EDI offers an Intuitive, modern user experience providing step-by-step transaction processing. All you need is a web browser. Seamlessly transition from web edition to full integration with your accounting/ERP system. Filter real-time information based on your speciﬁc roles and preferences. Eliminate delays and quickly respond to critical transactions with real-time notiﬁcation alerts.
Internet EDI software offers a combination of technological and business process improvement designed to meet the demands of a 2021 business. From data transformation capabilities to streamlined automation, EDI tools put your enterprise in a position to tackle any potential integration challenges that arise, without having to deploy and manage the software and hardware
1.4 Internet EDI Challenges
Yes, it’s true that internet EDI requires Minimal IT resources, hardware, and software costs but choosing the right internet EDI solution is challenging for many businesses. A small business should be aware that the best Internet EDI solutions are required to go through a certification process to ensure that the Internet EDI communications are functioning according to accepted standards. This method of certification of Internet EDI software is often referred to as Drummond Certification,
The modern architecture supports many popular web browsers, including Microsoft Edge and Internet Explorer, Mozilla Firefox, Google Chrome, and Apple Safari
1.5 Internet EDI Retailers / Trading Partners
Internet EDI is being adopted more frequently by more and more retailers. Today all major retailers can support small to medium suppliers by allowing them to do business with them via internet EDI. Many research firms estimate that Internet EDI will become the dominant EDI exchange method in the next few years. Over time, many businesses found that the internet-based EDI solution is the most profitable, cost-effective solution due to its low fees and a high degree of compatibility with trading partners /retailers.
Is Internet EDI is for everybody?
In this chapter, we will talk about the importance of internet EDI and is Internet EDI is for everybody?
That’s why many companies are looking for more modern, internet EDI solutions (Cloud EDI solution) which gives companies more flexibility than a traditional EDI system.
In the following chapters, we will discuss is Internet EDI is more suitable for small to medium businesses?
Let's get started,
Today, companies worldwide rely on EDI solutions to exchange B2B documents with their trading partners, customers, suppliers, vendors, and many more. The main reason behind choosing an EDI solution is that it’s a standardized and effective way to communicate with all the members of the business ecosystem.
Even though EDI adoption is growing among all business verticals, the traditional EDI solutions are becoming more restrictive and inflexible that enterprises rely on to exchange B2B documents and it requires more governance, onboarding, and data transformation processes that companies must manage and which in turn delays the overall business process. That’s why many companies are looking for more modern, internet EDI solutions (web EDI solution) which gives companies more flexibility than a traditional EDI system.
However, Internet EDI is more suitable for small to medium business, as it’s cost-effective, easy to manage, and require no prior EDI knowledge or any complicated software to be installed. The modern digital transformation is forcing many small to medium businesses to adapt to cloud-based solutions such as internet EDI which can be accessed from anywhere in the world with just a laptop and internet connection. Not only that, internet EDI offers a combination of technological and business process improvements designed to meet the demands of today’s market.
Internet EDI solutions manage data transformation, streamline automation, tackle any integration challenges that arise, without having to deploy and manage the software and hardware.
In today’s hyper-digital business landscape businesses need modern EDI capabilities to manage B2B document exchange between trading partners, suppliers, vendors, and more. Many businesses are not that well-versed with EDI technology and its integration challenges within the supply chain. That’s the reason many businesses today are opting for cloud-based EDI solutions which can be accessed from anywhere in the world, require minimal to no EDI knowledge and any complicated software and hardware interface to manage. This helps employees within the business to focus their time on core business initiatives and leave the tedium of EDI to experts.
Internet EDI trends
Internet EDI vs. In-House EDI Solutions
In this chapter, we will answer few questions related to internet EDI in comparison with other EDI solutions,
- Is Internet EDI Cost Effective solution?
- Does Internet EDI Require Large IT infrastructure?
- Is internet EDI more suitable for small and medium businesses?
In-House EDI Solutions
No software needs to be installed
Need to install a software
Access from anywhere with just internet connection and computer
Cannot be accessed via the internet and the system is installed within the organization
Does not require prior EDI knowledge to use the system
Require full technical understanding on how to use integrated EDI solution
Low startup costs
High setup and operational costs
Large IT resources not required
Require large IT resources to fully integrate the system
User-friendly and minimal training is required to use the system
Requires prior EDI knowledge, training, and experience to use the system
Suitable for small to medium-size business
Suitable for large multinational companies
Internet EDI for Small and Medium businesses
There are 3 key aspects of finding the right internet EDI solution
- Easy to use and manage
- Easy expandability to add more trading partners
- The high degree of automation
- Cost-effective EDI solution
A small and medium-sized business that wants to build relationships and partners with large organizations (trading partners) should always consider integrating an effective EDI solution into their current IT infrastructure.
Electronic data interchange (EDI) was initially invented to benefit large organizations to exchange B2B documents among their trading partners and other business. However, as the digital growth progressed, there were many other cost-effective EDI solutions like internet EDI were introduced which made EDI more affordable to small and medium-sized businesses. Nowadays many large retailers are forcing small and medium-sized businesses to find easy and affordable EDI solutions to start doing business with them. Many small businesses believed that EDI is the only way to expand their business and started implementing it as an investment to business growth.
There are 3 key aspects of finding the right internet EDI solution that is easy to use and manage, allows easy expandability to add more trading partners in the future, and additionally, the internet EDI solution should provide a high degree of automation, which allows the business to manage an EDI solution with minimal to no human intervention.
Some of the real-time examples of small and medium businesses which use internet EDI are,
Companies in the financial sector: Internet EDI helps financial businesses to reduce manual processes in payables and receivables by automating document transfer and generations preventing errors caused by manual work.
Retail Industry: Internet EDI helps in reducing costs without compromising on customer services. It also helps reduce the time taken in manual transactions and increases efficiency through the supply chain.
Healthcare Industry: Health care is a prime example as critical patient health information and insurance data can be processed and transmitted accurately in minutes instead of hours or days
Supply chain companies (retail, automobile, and manufacturing):
How Internet EDI Works
Internet EDI is suitable for all business types and you start exchanging EDI document with very little investment.
All you need is just a web browser and internet connection to start exchanging your EDI transactions with your business partners.
To understand how exactly the internet EDI works,
Let’s dive right into this chapter,
Even smaller or mid-sized vendors need to be compliant with their large retail customers. Internet EDI enables you to get up and running with very little investment required as a low-cost option. All you need is an Internet connection and a web browser, and you can begin exchanging EDI with your trading partners today.
The straightforward Internet EDI document interface is user-friendly and doesn’t require a lot of experience with EDI systems. It tailors the screen to include only the information requested by your trading partners. All forms include business rule validations and controls, ensuring effortless compliance with your trading partner's EDI programs.
- Your customer sends an EDI Purchase Order (PO) the way they do with all of their EDI suppliers.
- You receive an email alerting you a PO has arrived. Then you log into Commport Internet EDI using a web browser.
- You process your new PO for viewing and printing in a readable format. Commport Internet EDI then sends an EDI acknowledgment back to your customer confirming you received the PO.
- When goods are ready to ship and invoice, you select a PO and an invoice screen appears already populated with billing information from the PO.
- Your invoices are converted to EDI and delivered to your customer. You can also send PO acknowledgments and ship notices and print packing labels.
Top 18 Benefits of Internet EDI
Here are few top benefits of internet EDI,
- Automate process
- Reduce errors
- Cut costs
- Less paperwork
- Speed and accuracy
- Improves supply chain
There are many benefits of internet EDI from automation to cost reduction and many more. Because of these benefits, businesses of all sizes are today planning to invest in an EDI solution to digitalize and improve the B2B communications between the business and trading partners.
Here are some of the top 18 benefits of internet EDI,
- Automate process - Eliminate manual Processes and run 24/7 fastening business operations
- Improve planning process – Companies can plan better thanks to the information available via EDI to make a better decision. One example is checking real-time inventory and ordering for new stocks when there is a dip.
- Increase customer satisfaction – Faster processing and delivery times, help trace and track order status in real-time, and offers, peace of mind for the customer
- Reduce Errors – By eliminating the manual paper-based processing, companies can now worry less about manual errors
- Streamline all your business processes - By embedding EDI within your business process, you can automate the document transaction and translations between the internal/external systems as per the individual system requirements
- Real-time update - Companies using the EDI system can compile the information from different systems easily and make better decisions
- Cut costs – By switching to internet EDI solutions, companies can cut costs as the system requires minimal to no prior EDI knowledge to use, less IT infrastructure is required, and no software needs to be installed or maintained
- Improve Data Exchange – Companies often depend on multiple channels to resource and exchange information to full fill the customer needs and with the help of EDI solution this exchange of information between companies can be faster and improve overall business operations
- Smart stock management – Many companies in the eCommerce and Logistics industry know the importance of stock management and need to keep track of all the inventory data up to date to make better business decisions. An effective EDI solution can help in smarter managing of stocks, further reducing the pressure in the supply chain.
- Less Paperwork – Anything within the supply chain requires a lot of paperwork like order slips, inventory information, purchase orders, and many more, with paperwork comes human intervention, where the data must be entered manually and in turn creates errors with data processing, so to avoid all these disruptions within the supply chain, EDI solutions can make this entire process automatic and paperless.
- Improved Return on Investment (ROI) – Within a few months of implementing EDI most businesses see a marked drop in outgoing costs (paper, printing, and filing supplies) and man-hours dedicated to information processing thus improving business cash flows and ROI.
- Increased Efficiency – Because of EDI automation, manual work is fully eliminated, thus reducing errors and improving productivity.
- Eco-Friendly – By eliminating the paper-based process, you’re not only reducing your errors but also contributing to the environment by supporting the green eco-friendly initiatives
- Enhance transaction security - EDI enhances the security of transactions by securely sharing data across a wide variety of communications protocols and security standards
- Speed and Accuracy - EDI can speed up your business cycles and exchange transactions in minutes instead of the days or weeks of wait time. Also help reduce order-to-cash cycle time, improving business partner transactions and relationships
- Improve your supply chain - EDI enables you to optimize your supply chain as it automates business transactions, speeding up communication and reducing the risk of errors throughout the supply chain
- Better optimize your internal process - As business transactions are sent machine to machine, your digital trading processes are improved. EDI gives you reliable information, so you spend less time interpreting your data and enables you to make proactive decisions.
- Easy business partner integrations – Adding more business partners are easy with internet EDI solutions, The adaptability of EDI facilitates the flow of communications and, in general, improves business relations with any partner.
Internet EDI Solution offers functionality, automation, and control to organizations looking to automate their fulfillment processes and become EDI compliant.
The internet EDI technology has been growing significantly in the last 10 years, mainly because it is more cost-effective making it a viable technology not only for large organizations with hundreds of trading partners but also for smaller businesses who trade with only one or two trading partners.
Whether you are just getting started in the world of Electronic Data Interchange or have low-volume data exchange needs, Internet EDI is an economical solution, that is easy to use.
Internet EDI also makes it easier for companies to conduct business electronically with smaller partners that don't have sophisticated IT infrastructures. Although traditional EDI requires each trading partner to install complex, proprietary software, Internet-based EDI lets companies conduct EDI through a Web browser.
With Internet EDI, you get all the benefits from EDI without any of the headaches. No software to install, no limit to the trading partners or transaction types available, easy access using an Internet browser, and all at a cost that you can afford.