EDI companies have made a splash in the business world over the last 50 years. EDI, or electronic data interchange, is the exchange of computer-based business documents like invoices, transaction histories, and shipping notices.
The practice of EDI came about to simplify the exchange of this vital information between business partners around the world, and it has certainly worked. The main perk of EDI is that if cuts down on the time it takes for a document to get from point A to point B. This is by no means the only benefit, though.
How does EDI work?
Before we cover the benefits of EDI, let’s talk about how exactly it works. All of your company’s information is stored within an ERP (enterprise resource planning) system. This includes everything from purchasing information to shipping details. An EDI solution will link to the ERP and have full access to all of the company info.
Everything is stored in one easy-to-access place, but that’s not the point of EDI. The point is to collect the data, but then translate it into an easy-to-understand standard format before transmitting it to your business partners. There are a few different EDI solutions available; you can either download a software onto company computers or use web-based EDI that is accessed via an internet browser.
What are the benefits?
The fact that your company will majorly cut down on paper costs is just one of the many perks to EDI. Another huge benefit is that you no longer need to rely on human processes to manually input data. This saves on labor costs and allows your employees to focus on more important tasks.
EDI provides more accuracy
It also significantly reduces the risk of errors on business documents since data is computer generated. Whether you like it or not, computers are much less likely of making a mistake than humans. With EDI, everything is more automated and more likely to be 100% accurate.
EDI is a time/cost saver
EDI has been proven to save on time and costs throughout every business that utilizes it. Saving on time is a huge benefit; since basically everything is automated, orders can be filled and tasks can be completed almost immediately.
Information flows at a much faster speed when a company has an EDI system in place. There are no delays between information passes through different time zones since info can be transmitted 24/7. You won’t need a human to receive the document, analyze it and act on it.
EDI offers high levels of security
According to The Answer Co, “EDI solutions are set up to be only accessible to pre-defined authorized users, equipped with audit trails and archives to track use and ensure security. With electronic confirmations to ensure receipt of documents between parties, it brings transparency to business relationships.”
EDI companies takes the security of your company information and the information of your business partners very seriously. If security is your main concern, opt for a software version rather than a web-based EDI solution.