According to James H. Davis, director of sales of Amosoft, an EDI provider, a vast majority of “all commerce is done through EDI.” Because of its unparalleled importance to the success of supply chain communications, it is imperative for trading partners to speak the same shipping language or hire an outside resource to communicate for them.
“In the traditional supply chain configuration, technology is the predominant communication tool incorporating retailers, suppliers, distributors and manufacturers,” says Davis.
Because most companies aren’t adept at translating the complicated language of the supply chain known as EDI, outsourcing those efforts is the most economical way of doing business, says Davis. “Computers can’t read EDI. They require a translator or an intermediary piece of software so the computer can understand the data,” he says.
Outsourcing such a need is less expensive than performing the service in-house, primarily because EDI has become so “specialized and complex,” says Davis.
Other benefits of outsourcing EDI
There are several benefits of hiring an outside firm to translate the complex languages of the supply chain for your company.
Those plusses, says Davis, include:
• The assurance your company will comply with all EDI standards, both domestic and international
• The ability to merge newer technologies (like web services) with traditional EDI
• The ability to seamlessly link all elements in the supply chain
• The money saved by not having to buy, support and maintain translators and the technology to support those efforts
Still, despite the fact that outsourcing EDI communications is the norm rather than the exception in the world of supply chain, doing so does have its downfalls, warns Davis.
While the pitfalls are few, outsourcing EDI may not be the best option for a large company. When a business is large, its moving parts are usually not served best by hiring an outsider to perform work intrinsic to the success of the entity’s various parts.
No matter what, if your business is going to outsource its EDI needs, be certain to perform your due diligence prior to hiring anyone, warns Davis. Be sure to hire a company with a “good reputation within the EDI community,” he says.
Tami Kamin Meyer is an Ohio attorney and writer.