This blog could also be entitled the triumph of substance over style.
We had a new customer sign with us last week, not in itself unusual, but that fact that we were replacing an alternative solution, and at the same time becoming the partner of choice for another software house is worth mentioning. At a more technical level it gave me an insight in to the limitations of some of the older methods for EDI integration.
The client concerned required a particularly rapid turn around of one specific trading relationship and asked if we could move faster than our standard Service Level Agreement (SLA). We had a quick look at the data, the format required by the recipient and the how the missing data could be deduced. We then said yes.
However, the reason for the rush was that this particular Trading Partner (a customer of our customer) had been waiting for over six months. The reason was that whilst the previous EDI vendor had claimed that their tool was flexible and did not need rigid formats. The truth was more like "we have several different formats that we can use, but outside of these formats we will struggle or it will be a an expensive consultancy exercise".
I have a problem with this approach. I do see the benefit of standard data formats being developed, in fact I really admire the business analysis that has gone in to the development of standards such as UN EDIFACT. However these standards are rarely rigidly adhered to and that is both the problem and the beauty. Different businesses have different data requirements, sometimes based around restrictions in the ERP system, sometimes around the business process. Therefore, your EDI solutions must have the flexibility to change as the business requirements or you or your partner changes, this may involve merging data from various sources, using a message intended for one purpose to provide the data for a different message, splitting or concatenating data to provide different data and the use of look-up tables or catalogues. Sometimes we are even asked to use one message between trading partners to add data to another message between the same partners. Obviously, because our service is Software as a Service (SaaS), the idea of such data merging is easier than for software deployed at the end user site, especially when like us you can be using industry catalogues that are shared amongst many users.
One thing is certain, the format of the data (XML, EDI, csv, Fixed Width or even MS Excel) is irrelevant as long as the data that is required by the recipient is either present or can be deduced. You see the style of the message is not as important as the substance (aka content) of the message.
Thursday, November 22, 2007
Friday, November 16, 2007
Some times you can process EDI too fast, Nice Problem to Have
A client rang me this week with what I believe to be a first in terms of customer requests for us. His problem was that we were processing the EDI invoices TOO FAST. I guess sometimes speed isn't everything.
This was however a genuine business problem as follows. The sender of the invoice issues the invoice upon dispatch of the goods, not an uncommon practice. Both parties are linked via our FREE AS2 service. When the invoice is issued it is placed in the AS2 outbox, received by our service, translated and sent via AS2 to the recipient. The whole process takes less than 1 minute from the time the invoice is issued, to the time it is received by the recipient. The recipient then loads the invoice in to their system (all automated) and it is immediately rejected because the goods have not been received by the warehouse. Hardly surprising because the goods have just left the loading bay at the supplier and still have hours of road time before they will arrive.
It's good to be able to have a laugh at work and the client and I found this quite amusing (maybe we're just a bit sad), but it is worth noting that no matter how efficient and fast we make the technology it still has to take the actual business practice in to account.
There are many resolutions to the problem. The first would be for the invoice issuer to delay sending the invoice until the following day. The second would be for us, as the central hub service, to stall the invoices until the following day. This was the option that was taken as our systems were easier to configure than any one Else's. The recipient could delay processing invoices until the following day as another option.
However the best solution would be for the invoice to be raised not upon dispatch, but upon receipt of an electronic Goods receipt Note (GRN), sent by the recipient of the goods when they are received in to the warehouse. This would be electronic trading haven, you could even make the invoice match the GRN, so that there would be no chance of the invoice being refused by the recipient. There is a flaw in this process though. If the recipients systems and/or the senders systems cannot process a GRN they will have to alter their ERP systems, which has a cost. It might be possible to cost justify but it is a major change of business process and proper thought must be put to the business/profit advantage to be gained. Too many times we see technologists come up with a great technology solution to a problem without thought to the true business benefit.
For these customers the simple solution worked best. We have other customers using the GRN process and they have established a huge cost reduction by doing this. Luckily with SaaS it is easy for one system to accommodate both customers, so both customers get the electronic trading that their business justifies.
This was however a genuine business problem as follows. The sender of the invoice issues the invoice upon dispatch of the goods, not an uncommon practice. Both parties are linked via our FREE AS2 service. When the invoice is issued it is placed in the AS2 outbox, received by our service, translated and sent via AS2 to the recipient. The whole process takes less than 1 minute from the time the invoice is issued, to the time it is received by the recipient. The recipient then loads the invoice in to their system (all automated) and it is immediately rejected because the goods have not been received by the warehouse. Hardly surprising because the goods have just left the loading bay at the supplier and still have hours of road time before they will arrive.
It's good to be able to have a laugh at work and the client and I found this quite amusing (maybe we're just a bit sad), but it is worth noting that no matter how efficient and fast we make the technology it still has to take the actual business practice in to account.
There are many resolutions to the problem. The first would be for the invoice issuer to delay sending the invoice until the following day. The second would be for us, as the central hub service, to stall the invoices until the following day. This was the option that was taken as our systems were easier to configure than any one Else's. The recipient could delay processing invoices until the following day as another option.
However the best solution would be for the invoice to be raised not upon dispatch, but upon receipt of an electronic Goods receipt Note (GRN), sent by the recipient of the goods when they are received in to the warehouse. This would be electronic trading haven, you could even make the invoice match the GRN, so that there would be no chance of the invoice being refused by the recipient. There is a flaw in this process though. If the recipients systems and/or the senders systems cannot process a GRN they will have to alter their ERP systems, which has a cost. It might be possible to cost justify but it is a major change of business process and proper thought must be put to the business/profit advantage to be gained. Too many times we see technologists come up with a great technology solution to a problem without thought to the true business benefit.
For these customers the simple solution worked best. We have other customers using the GRN process and they have established a huge cost reduction by doing this. Luckily with SaaS it is easy for one system to accommodate both customers, so both customers get the electronic trading that their business justifies.
Monday, November 12, 2007
"Both Parties Must Both Gain Benefits" is the First Golden Rule
You may recall that in "Beware the "cheap" option!" we looked at some of the wasteful abuses that can be imposed on you if a "website" substitute for business-to-business, integrated EDI is presented to you as the means to provide your customer with electronic documents, such as invoices, despatch and remittance advices. The "cheap" option only leads to your staff having to double type all the information from the documents into your systems and into the “website”!
- Your work is doubled.
- Your risks from human error are doubled.
- Your costs go up.
- Your profits fall.
- Your prices need to go up...
- You become less competitive!
What can you do to avoid such abuses?
Well, the remedy is a bit like growing asparagus...
Asparagus?
Yes. To grow asparagus you dig a hole three meters long by three meters wide about one meter deep. You fill it with all sorts of good stuff from stables mixed with exquisite soil and you plant the asparagus – FIVE YEARS AGO!
You must avoid being pushed around by the eBusiness team. They are working to a very restricted agenda. They know nothing and care less about your business value to their employer. You need to maintain and cultivate your highest levels of contact within your customer. You need your relationship to be strong enough for your senior contact to be prepared to instruct the eBusiness team to co-operate with you. To make an exception in your case. You will still be a very willing eBusiness partner, but the job is going to be done properly and, to a certain extent, on your terms!
It is best if you avoid direct contact with the eBusiness team. Let your eBusiness provider do that whilst you maintain your good standing with your senior contact(s)!
What then do you offer to do for your ally in the senior echelons of your customer?
When the “website” was implemented it was configured to receive orders from your customer's purchasing systems. These orders are passed to the “website” in electronic form. They are files and they have a format. All that has to be done is for you to be supplied with this format and for your customer to agree to sending the order files to your eBusiness system by one of the accepted transport methods.
Similarly, the “website” passes the documents (such as invoices, despatch advices and remittance advices) that are inbound for the customer's systems as files and they too have formats. If the formats are made known to you and your eBusiness provider then they too can be passed directly to the customer's systems just as efficiently as the files that are currently passed to them from the “website”.
The benefits here are that you avoid doing the work twice.
All the risks listed above are eliminated.
You have reinstated the first GOLDEN RULE:
BOTH PARTIES MUST BOTH GAIN BENEFITS!
In that same WIN-WIN vein, you are perfectly entitled to follow the example of Oliver Twist and ask for more. You are being asked to make an investment in money, time and effort to help your customer. Are you getting as much business from your customer as you could? On a number of occasions I have seen the Sales Director of a supplier use the “request” for electronic trading as a very sound reason to visit the customer and literally “ask for more”. In one instance a customer of mine, a supplier of specialist tools and devices to the construction industry, went to her customer and said something along the lines of, “We would be happy to do as you ask, but currently you only give us about ten per cent of your business. You give ninety per cent to our competitor! Give us fifty per cent and we will do all you ask and do it immediately!”
She won the extra business, increasing her company's sales to that customer by 400 per cent!
In summary so far then:
You must be informed of exactly what is required, IN FULL. It can be too late to get a decent working relationship if you fail to cultivate your senior contacts in your customer and just become part of a target list drawn up by the customer's eBusiness team or their vendor. You and your customer must get worthwhile benefits out of the eBusiness relationship. Get these things right with your customer and you have both made a good start towards successful and beneficial electronic trading.
You may even find an early opportunity to multiply your sales to this customer!
Thursday, November 08, 2007
The use of catalogue data in EDI
One of the big issues that faces companies exchanging data electronically in any industry is the alignment of the data on all trading partners systems.
As a simple example we can look at a purchase order sent from a retailer to a supplier. The purchase order contains data that has been produced from the retailers back office system that is required by the suppliers back office system in order that the order is fulfilled efficiently. This data will include information such as the delivery point and the code for each product ordered.
When the order is processed by a human, the human interprets the data they see and translates this in to the data required by the suppliers ERP system. When the data is exchanged electronically this "translation" needs to be done automatically. For a lot of suppliers ERP systems this has already been accommodated, but we still get requests from customers to help with this process.
One of the advantages of a Software as a Service (SaaS) is in the nature of having a centralised hub. We have taken the approach of hosting catalogue data on the hub which means that ALL customers that need access to this data, to enhance the data they send or receive, can use it. If our software was deployed at our customers sites then each customer would need a copy of each catalogue they use, and they would have to be regularly updated. With the SaaS approach one catalogue is shared by all relevant users, and is regularly updated in one place.
I should say that to us a catalogue is a name given to ANY look-up data which we process. This could be a list of valid delivery points, a list of product groupings and, of course, products and prices. The important thing to do is to enhance the data received by the recipient so that they can process the incoming data automatically without human intervention. After all that is what EDI is about.
Whilst we have found this approach to be some use in the retail sector, the real advantages have arisen in the construction sector, where EDI is still a maturing technology and the back office systems of both sides of a trading relationship are not a well configured for electronic message exchange as those in the retail sector. But as we are adding construction trading relationships at the rate of 20 to 30 LIVE trading relationships per month, this technique is proving its worth.
As a simple example we can look at a purchase order sent from a retailer to a supplier. The purchase order contains data that has been produced from the retailers back office system that is required by the suppliers back office system in order that the order is fulfilled efficiently. This data will include information such as the delivery point and the code for each product ordered.
When the order is processed by a human, the human interprets the data they see and translates this in to the data required by the suppliers ERP system. When the data is exchanged electronically this "translation" needs to be done automatically. For a lot of suppliers ERP systems this has already been accommodated, but we still get requests from customers to help with this process.
One of the advantages of a Software as a Service (SaaS) is in the nature of having a centralised hub. We have taken the approach of hosting catalogue data on the hub which means that ALL customers that need access to this data, to enhance the data they send or receive, can use it. If our software was deployed at our customers sites then each customer would need a copy of each catalogue they use, and they would have to be regularly updated. With the SaaS approach one catalogue is shared by all relevant users, and is regularly updated in one place.
I should say that to us a catalogue is a name given to ANY look-up data which we process. This could be a list of valid delivery points, a list of product groupings and, of course, products and prices. The important thing to do is to enhance the data received by the recipient so that they can process the incoming data automatically without human intervention. After all that is what EDI is about.
Whilst we have found this approach to be some use in the retail sector, the real advantages have arisen in the construction sector, where EDI is still a maturing technology and the back office systems of both sides of a trading relationship are not a well configured for electronic message exchange as those in the retail sector. But as we are adding construction trading relationships at the rate of 20 to 30 LIVE trading relationships per month, this technique is proving its worth.
Friday, November 02, 2007
EDI Can Make You Feel Good and Improve Your Business
When we started developing the technology for exchanging EDI messages many moons ago, we obviously wanted to develop a software solution that would provide a service businesses would want to purchase, because without that we do not have a business ourselves. But we were also determined to ensure that the product and service were such that our customers would be able to see a return on their investment, unlike a lot of software that promises great ROI, but provides non.
We determined that the way to do that was to reduce any technical input from our customers to a minimum (reduce their costs of set-up), integrate messages to our customer's ERP systems when practical (some systems just could not cope with an electronic remittance for example) and to eliminate the need for them to change their systems to cope with our integration standard (You would be amazed how many times we have heard that from other people).
People keep buying the software and people keep renewing their licence so one could assume that we are continuing to get it right. But a better test in when customers actually talk to us and recently, as part of our program to achieve ISO 9000:2000 accreditation, we have be performing customer feedback surveys.
It's great when customers tell us what they would like from us next, as it means we do not have to keep coming up with all the new ideas. But in following up on the feedback, and expanding beyond the normal survey type questions, it was even better to find customers saying things like EDI has helped us achieve strategic alliances or we don't even notice the EDI is there it just works or we have dramatically increased the amount of e-trading we conduct. It makes you feel good when you can help someone else achieve success.
We aimed to provide the best SaaS for EDI in the UK and Europe, and the customers will judge us on that, but we also wanted to actually add value to our customers businesses and this also appears to be happening. Electronic message exchange for businesses has always had the potential to drive cost out of business but it was always perceived as a bit too much of a dark art.
Now with the combination of SaaS EDI where the actually mapping is done on the SaaS, not just a Web App you have to use, plus the best levels of customer service this is coming to fruition, and even adding to strategic business alliances.
The future of Electronic Message exchange is SaaS, the old technology of a piece of software deployed on a pc or server on site cannot deliver the flexibility needed for today's EDI.
We determined that the way to do that was to reduce any technical input from our customers to a minimum (reduce their costs of set-up), integrate messages to our customer's ERP systems when practical (some systems just could not cope with an electronic remittance for example) and to eliminate the need for them to change their systems to cope with our integration standard (You would be amazed how many times we have heard that from other people).
People keep buying the software and people keep renewing their licence so one could assume that we are continuing to get it right. But a better test in when customers actually talk to us and recently, as part of our program to achieve ISO 9000:2000 accreditation, we have be performing customer feedback surveys.
It's great when customers tell us what they would like from us next, as it means we do not have to keep coming up with all the new ideas. But in following up on the feedback, and expanding beyond the normal survey type questions, it was even better to find customers saying things like EDI has helped us achieve strategic alliances or we don't even notice the EDI is there it just works or we have dramatically increased the amount of e-trading we conduct. It makes you feel good when you can help someone else achieve success.
We aimed to provide the best SaaS for EDI in the UK and Europe, and the customers will judge us on that, but we also wanted to actually add value to our customers businesses and this also appears to be happening. Electronic message exchange for businesses has always had the potential to drive cost out of business but it was always perceived as a bit too much of a dark art.
Now with the combination of SaaS EDI where the actually mapping is done on the SaaS, not just a Web App you have to use, plus the best levels of customer service this is coming to fruition, and even adding to strategic business alliances.
The future of Electronic Message exchange is SaaS, the old technology of a piece of software deployed on a pc or server on site cannot deliver the flexibility needed for today's EDI.
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