The Complexities of EIPP or EDI make it prime for Outsourcing

Last week I had a review of our mapping process with our lead data mapper. Ken is a man of over 20 years experience in the EDI and data mapping world. He has contributed to international EDI standards and even written a standard for the Paper industry. He knows what he is talking about. He is also a strange being who delights in the minutiae of data mapping and he enjoys nothing better than solving the problems inherent in getting one computer system to talk to another.

We were looking, as we do on a regular basis, at how we could improve the mapping process, automate more and therefore offer a better service for our customers, which of course leads to better profit. One thing we homed in on was the number of different mappings we have created for our customers and their partners.

Having looked at that number, we then looked at the number of standards available that users either are or could use. The numbers are staggering. In EDI in the UK and Europe we mainly see Tradacoms and EDIFACT. Of course there are various versions of each and in particular with EDIFACT one persons EDIFACT D96a order is not the same as another persons.

We then looked at XML, once touted as the great hope for simplifying EDI. Over 500 standards, and a lot of the standards are varied by the end user.

We then looked at ways we send and receive messages, 10 basic methods (AS2, EDI VAN, FTP, email etc) and most FTPs have slightly different requirements (e.g. do we delete the file when download or archive it) and HTTPS is different for each user we implement for.

Now we actually enjoy all this variety but we then thought about users, not our users, but users that were trying to implement EDI themselves. Don't get me wrong, we do not do anything our users could not do for themselves BUT the question is at what cost. Given the variety of message standards and comms methods around your average customer that either buys or supplies goods to and from various parties will need at least one, more likely two specialist to handle any significant EDI initiative.

If they have an IT department the skills may be present but here's the question. If you business is buying, selling, manufacturing or distributing widgets do you want your IT team spending their time trying to integrate with one of your trading partners or do you want them to concentrate on adding value to your core business activities? Integrated EDI will add to your bottom line, but not if it is diverting you and your team from your main business.

This is where the value of outsourced EDI can be found. Firstly does EDI make sense for your business. We do a simple activity based costing exercise with some of our customers to identify when EDI will add to their bottom line. Once this is done we can then look at the costs of "Do it yourself" against outsourced EDI. For any significant EDI program, outsourcing wins easily.

A friend of mine in the pub on Friday asked me why I don't do DIY at home. My answer was simple, I know what I am good at, and DIY isn't one of those things. When I did try DIY in the past I would find I would have to buy tools and materials, most of which I would never use again and then I would have to pay someone else to correct what I have done anyway, so there is no saving. The same should apply in business, do what you are good at, and leave the nasty world of EDI to someone that enjoys it, it will save you money.

SaaS adds more value to EDI

With more and more off our customers we are happily finding ways to add value to the normal EDI processing that has been experienced with older, on-site solutions.

Firstly new acronyms are appearing, for example EIPP (Electronic Invoice Presentation and Payment). Sceptics might call this EDI invoices and BACS. I shall explore the differences in a future post.

For a lot of our users, up until about 18 months ago, traditional EDI with a hint of XML for spice, was just fine. But we have started to notice a sea change in the requirements for EDI. Obviously there is the move towards AS2 and other methods of sending and receiving data. We have been using AS2 for our customers for nearly 4 years but in the past 18 months the adoption rate has accelerated markedly. This is a great move, it reduces the costs of EDI and adds value by removing the latency built in to most EDI processes by the nature of the timed connections.

We have also seen a move to increased data requirements. This has proved difficult for some users as it was not always easy, as I am sure you will realise, to modify their ERP system to process the additional data. However they often had the additional data in "Non EDI" data, for example catalogues, or even the incoming documents such as Purchase Orders.

Because of the nature of our SaaS solution, being based around the concept that all data has value whatever the format, plus the fact that the solution is based on a repository we have been able to take these disparate data sources and merge them to create enhanced EDI messages that the recipient requires. This would be a real struggle with traditional on-site systems.

Over the next few months we intend to expand the use of such solutions to both enhance customer data, add functionality to the user experience of the service and to provide translations of product codes, units of measure, delivery points and many other requirements that are becoming the norm for the modern EDI message exchange.

By adding more value to EDI messages we believe that adoption will accelerate through the next 10 years.

The World (retail at least) Keeps Spinning

Firstly, complements of the season to all.

As with all companies in the business of EDI, at least some of our customers have continued to operate throughout the holiday season. In particular in the retail sector orders for goods to be delivered on all days are being processed, and at least one of the logistics companies that use our service were actually working from 6pm on 25th December.

Of course our servers operate on a 365 days per year basis, but certain customers require the comfort of a support contact available as well, which we provide. This is seen very much as an insurance policy and we hope it never needs to be called upon. Unfortunately this year, on 26th December it was. Not a problem with any of our servers, but because we monitor customers traffic we were able to alert a particular customer to the fact that their systems had failed and they had not sent some of the transmissions we had expected. Sometimes, because EDI is integral to a business, we can actually help users to see errors in other systems, before any other alert is raised, and it is great to be able to offer such help.

One other issue that has come to our attention is the practice of some other providers in charging for messages stored on their servers. A number of new customers this year have contacted us concerned about storage charges over the festivities. It appears that some of our competitors charge for holding messages that the customer does not download within 7 days. Whilst this does not effect users such as those detailed above, this would obviously cause extra cost for users if they are shutdown over the festive period. What an outdated practice. One would almost think that this was the equivalent of an EDI "Stealth Tax". We were able to put users minds at rest as we do not charge for storage of up to one year. Some of our users are saying this will save them several hundred pounds which is great. We want our users to be happy customers for years to come and being short sited for a few hundred pounds would be ridiculous. It would also appear to be at odds with our views that EDI should be Software as a Service and AS2 must be Free of Charge.

One day all EDI will be this way.

Back to the Future of EDI

In my last post I looked at the benefits of using the Internet to exchange business messages electronically rather than proprietary Value Added Networks (VANS). One on the problems with the VAN approach is that customers are normally expected to have a specialised, normally proprietary, piece of software to allow the message exchange. Now this software is not normally proprietary to the Network, and your EDI software does not need to match your trading partners EDI software, but you still need specialist software.

Obviously with the Internet comes the advantage of standards based message exchange. Whilst we favour the use of AS2 as the communications protocol, preferably Free AS2, we are happy to use most Internet standards for communication. This is because by using open standards it makes it easier to engage trading partners in the exchange of electronic documents.

I actually thought, regardless of whether companies charge for AS2, that all EDI and XML message exchange was moving to Open communications standards. It was therefore a great surprise to me to find that one trading partner of a customer was trying to insist that they install a proprietary piece of communications software to exchange invoices with them. When we questioned this we were told that whilst in theory their software could support the open standards, their software provider preferred that they use the software providers own communications protocol. This was even worse than the software needed for EDI VAN communications because what the software provider was trying to say was that to exchange any messages with their customer you must use the software houses own communications software.

The IT industry has a habit of inventing solutions to problems that do not exist and here is a prime case. Having been offered the options of email, FTP, HTTP(S), SSH, EDI VAN and AS2, a software provider was trying to insist upon their own proprietary solution. Having insisted (with our customers permission) that we would not install proprietary software, the trading partner went for email (but only after days of delay), not our favourite method, which works OK.

So having moved from the world of proprietary networks and associated software, to the glorious open world of the Internet, are we really going to step back to proprietary? I hope this is an isolated instance, because otherwise we may as well go back to EDI VANs, and I don't think that helps anyone.

The exchange of business documents offers many benefits to businesses both large and small, reducing costs, reducing errors and it has environmental benefits too. Putting barriers in the way of message exchange reduces likely uptake and, when as above, it is an unnecessary barrier it is just silly.