Key Aspects of A Successful EDI Migration Project

Electronic Data Interchange (EDI) is a crucial business process for companies across many sectors to keep operations at the right level and maximize supply chain efficiency. It's therefore understandable that after some years of using a certain EDI solution, companies decide to undergo an EDI migration project to shift to another system that delivers more value and leverages operation efficiency. This article presents key aspects to consider when modernizing your EDI solution.

Take ownership of the planning stage and ask an expert

The key to success in an EDI migration project is taking ownership of the planning stage internally. By outsourcing the initial phase, you remove visibility of the process and decision making. However, when starting such an initiative, it's recommended that a company seeks an external expert to advise on good market practices. The EDI migration process is especially challenging for companies that have large SKUs and wide distribution networks such as those that cooperate with different retail chains and sell via different channels, as this means they deal with many EDI communications, face different requirements from business partners, and, if trading internationally, must comply with many different standards. Such characteristics can be applied to organizations that belong to the FMCG and consumer goods sector or are simply large-scale producers. They are unable to effectively operate without EDI as it’s related to the exchange of the products’ data that they trade every day. If we zoom into the organization structure, the area most affected by EDI is the supply chain department. Due to the fact that they must deal with processes linked to people, technologies, information, and logistics in order to move the goods to their customers, all decisions that are made by the supply chain department are based on the data shared across geographical units and organizational cells. One poorly shipped order batch can result in running out of stock, higher cost of transportation, bad inventory management, and even millions of dollars in lost sales. The quality of EDI services also influences finances, that require accurate data for correct billing, and IT, which, due to the importance of digitization in the world of manufacturing companies, often has a separate department dedicated to digital transformation.

Audit your current EDI architecture and network

In addition to assigning a team that will oversee the initiative of carrying out an EDI migration project, the key during this phase is to identify the current situation, possible constraints, and the future needs that should be met by the new architecture of the EDI solution. The practical outcome of this step should be a repository with access for the people within the organization that are engaged with the project. After identifying the needs, the following step should focus on setting up the project structure and lifecycle processes. We have to determine our approach, whether we want to migrate all partners simultaneously, or if we’ll start with a pilot phase with the partners that have the best relationship with our company or use limited EDI communications in order to test the new solution with minimal disruption.

Next, we should focus on completing the documentation on the EDI specification and mapping tables. At this stage, it is crucial to collect all the information about the protocols and messages that are currently in use. The moment of defining our EDI architecture is a great opportunity to perform a gap analysis. If we have a very extensive EDI network or have been using the same provider for several years, there will certainly be areas where we have outdated maps or manual processes that could be automated. That’s why auditing our EDI providers and defining their specs and document metadata is crucial.

Analyze possible EDI options in the market

The next milestone is choosing the EDI solution that we would like to finally use. Before switching EDI providers, the new provider should have experience in both the sector and geographical area that we have our operations in. Apart from having a classic EDI solution, they should have additional features in order to optimize logistics operations in our organization. Thanks to the effective use of EDI, the aforementioned supply chain cannot only exchange data about orders, but also improve cooperation with business partners. EDI solutions that combine technology and business intelligence offer dashboards that show important information such as the average delivery time per partner or the average number of incorrect orders. Such knowledge supports the optimization of the entire supply chain. Also worth mentioning are the market-driven specifications related to the type of messages exchanged. An example would be EDI 820 Payment Order & Remittance Advice in the US market, where the buyer notifies the seller of payment of an invoice. It often accompanies the electronic transfer of funds and may be incorporated into an ACH banking transaction. Such communications are not commonly used in Europe and we must have a provider who is aware of such differences around the globe in order to successfully perform an EDI integration.

To sum up: the EDI migration process is quite a complex undertaking because it requires the engagement of several organizational teams, which do not always closely cooperate or communicate with each other. However, without a detailed analysis of the situation in the macro and micro scale along with a clearly defined EDI migration plan, the EDI migration project will not be successful. Also, having a reliable partner who has a strong portfolio of migration projects under their belt is one of the most valuable assets that we should consider when carrying out this type of project in order to maintain business continuity, good relationships with our partners, and optimize everyday processes in our organization

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