SaaS-based EDI solutions show great promise. Their benefits—reduced capital investments and operating costs, simplified IT, and the ability to streamline and improve information exchange among partners—seem particularly appealing to small and midsize companies. Trouble is, there may have been a few misunderstandings, including concerns around integrating SaaS-based EDI with back-end systems.
It’s well known that for EDI to be of use, the technology needs to have direct access to internal systems that house and process vital corporate data needed to fulfill EDI transactions; systems such as enterprise resource planning (ERP) and supply-chain management (SCM) applications. Much has been done to create the necessary links to facilitate processing between an EDI solution and a back-end ERP system. “Traditional premise-based EDI solutions offer varying levels of integration to a wide range of ERP systems,” says Bob Gleason, president and CEO of [https://www.redtailsolutions.com] RedTail Solutions, a provider of hosted and managed EDS as well as global data synchronization (GDS) solutions. “The challenge for EDI solution providers is that every ERP system speaks a different language, so each integration effort is technically, and functionally, unique.” Since premise-based EDI solutions, however, have become so well-entrenched, much of the unique integration work has been done.
But where does such integration stand with regards to SaaS-based EDI? At high-level, to create the integration there needs to be a local software component that resides behind the customer’s firewall and serves as the bridge between the premise-based ERP system and the cloud-based EDI engine. “The connection between this client-side software component and the cloud-based services must be secure and reliable, with logging, rollback and other services to ensure system integrity,” says Gleason.
Organizations that attempt to integrate EDI and ERP systems themselves have tackled the problem in different ways, according to Simon Peel, senior vp of marketing and strategy, Cast Iron Systems, an IBM company, a company focused on providing integration tools between cloud and SaaS solutions with enterprise applications. Cast Iron was recently acquired by IBM. Some organizations choose custom-coding, which Peel says tends to be labor intensive. “Small to midsized businesses typically do not have the skilled IT resources required to build and maintain integrations in house,” says Peel. Others may choose off-the-shelf cloud-only integration tools, which he says may deliver sufficient integration between cloud applications, but tends to offer only rudimentary business-process integration capabilities between cloud and on-premise environments. Finally, some have relied on integration tools designed specifically for the on-premise applications.
“It’s no wonder that integration has been one of the biggest barriers to SaaS adoption,” Peel notes. So Cast Iron has specialized in building integration tools that are adept at working with, and in between the two worlds—on premise applications and SaaS-, or cloud-based systems.
The Cast Iron Integration Platform has been developed to provide a complete integration solution that fully integrates data, applications, and business processes across the enterprise and the cloud. The platform is designed to enable data migration, process integration, and user interface mashups, and provides reusable templates for integrating the most common business-process scenarios, as well as the ability to integrate in the cloud in a multi-tenant service or through on-premise or virtual appliances.
There are other alternatives. Some of the SaaS-based EDI providers are working hard to build into their offerings native integration with back-end systems. Such vendors partner with ERP providers, or work individually with customers, to create interfaces that are re-usable, or close to res-usable, according to Scott Bolduc, senior supply chain strategist with [https://www.spscommerce.com] SPS Commerce, an operator and provider of a SaaS-based a trading partner integration center called SPSCommerce.net. “We have partnered with Oracle, SAP, JDA extra to do that up-front work so that each implementation can be reused and are quicker to implement,” Bolduc says.
Red Tail Solutions includes ERP system integration as part of its solution, according to Gleason. “We believe strongly in integrating very well with a limited number of ERP systems rather than having a thin integration layer with a long list of ERP systems. Lightweight integration often comes up short in supporting business processes and providing reliable document transfer,” he says. “There are always multiple approaches to integrating with an ERP system – through Web services, batch integration, direct database updates, etc. We design and build our integration uniquely for each ERP system to ensure secure, reliable, and rapid transaction integration.” Red Tail Solutions provides a local interface component that provides ERP system integration and secure data transfer to the company’s cloud-based EDI translation and communication services. The interface uses native tools and runtime components from the particular ERP system with which the interface works, and provides the necessary user functions embedded in the ERP system to accept and forward documents such as purchase orders, invoices and ASNs.
SaaS-based EDI may not be the choice for your organization, but it’s important not to dismiss such a solution because of integration concerns. The challenges are really no different than they’ve been in creating links between traditional EDI solutions and back-end systems. And the benefits of SaaS-based EDI may become too compelling to forego. What’s important is to ask the right questions. “The SaaS provider needs to be intimately familiar with many different business applications, from order systems to transportation management systems,” Bolduc says. Equally important, he says, is understanding your own organization’s EDI needs and structure.
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SaaS EDI to Back-end ERP – How’s the Connection?
Organizations may think solutions that link newer SaaS-based EDI systems to their back-end systems are too incomplete. Work still needs to be done, but there are options. EDI paved the way for the standard, real-time exchange of business documents, such as purchase orders, ASNs, bills of lading and more. But the traditional platforms on which EDI transactions—the Value Added Networks—are being overshadowed by Internet technologies such as Software-as-a-Service (Saas).