Any company involved in supplying products through the retail channel already has two things — communication with their trading partners and a way to manage their finances and inventory. These are typically known by their acronyms, EDI and ERP. But what many of the companies using these systems do not ahve is an integrated connection between them.
Without direct integration between ERP and EDI companies rely on either manual data entry or batch oriented import and export of transactions between the two. If you’re working on a small (very small) scale then the manual method can work for you. And it’s surprising how many larger companies still rely on batch transaction updates. Here’s why you really should consider some kind of integration.
The obvious problems with manual data entry are first that manual keying of data is subject to error… simple keyboarding errors that may or may not show up immediately. If you’re dealing with 2 or 3 transactions per day this may not seem a big deal, but when the errors end up causing accounting problems or invoice disparities a month after they have been entered, the time required to track down the problem and resolve the problem with your trading partner can quickly eat into profitability.
Which leads to the second problem with manual entry — delays. When volumes are low there is typically no dedicated staff member assigned to process transactions as their primary function. That means that person has other responsibilities that can take priority over the few transactions that need to be handled.
The positive side of having a small volume of transactions is that this is the perfect time to implement an integration initiative. Integrations can be simple but are always a new experience for the company. Better to start when volumes are low (and expenses are correspondingly low) and get the process in place. As volumes grow, you won’t need to interrupt the flow and cause additional delays because you already took care of modernizing your operations.
Batch processing of transactions leaves less room for manual keyboarding errors but still allows for problems. This is because the ERP and EDI systems don’t store their data in the same formats, meaning the data needs to be translated between the two systems. This is all fine as long as nothing changes.
But EDI data files do change. The changes re usually announces so that they can be accommodate in processing, but the data formatting updates don’t always happen on the right schedule and are themselves subject to errors. Direct integration between your ERP and EDI systems resolves that problem because the provide of the integration service connects directly to the data in each system and manages the transfer without generating an intermediate file.
Check your current processes and determine what can be improved. You’ll find some great resources to integrate your systems and jump ahead of issues that will show up later on.