SaaS- and cloud-based EDI’s core benefits are fairly well known: reduced capital investments and operating costs, simplified IT, and the ability to streamline and improve information exchange among partners. But there’s more to be had.
Consider, for example, aggregated analytics that compare your EDI efforts with other businesses to see how you stack up with industry peers, and reports that provide ways to optimize. Or scalability that’s ready to use when business spikes. When it comes to SaaS- and cloud-based EDI, there’s plenty of ancillary advantages.
In general, SaaS- and cloud-based services are gaining traction. Currenlty, sales of cloud computing products are estimated to be worth at least $16 billion in annual revenues, according to IDC . By 2014, cloud computing will generate almost $56 billion in annual revenue. A recent IDC study shows that the SaaS market had worldwide revenues of $13.1 billion in 2009, and IDC forecasts the market to reach $40.5 billion by 2014.
SaaS- and cloud-based solutions are gaining in popularity largely because of the key benefits. In a paper discussing SaaS’ return on investment (ROI), Forrester Research points to these four advantages of SaaS solutions: reduced costs (in particular, those costs related to the adoption of the software and underlying infrastructure required for that software); quicker adoption; improved adoption (because more users can use the software; and improved flexibility.
Flexibility is clearly a fundamental benefit of SaaS- and cloud-based EDI. But organizations may not realize all the benefits related to flexibility. EDI and e-commerce can be very resource intensive – integrated Web servers, XML messages, and the real-time nature of electronic business need higher capacity and high-performance infrastructures, and by subscribing to a SaaS- or cloud-based EDI service, organizations typically have access to a robust computing infrastructure that’s been architected to support numerous businesses and millions of real-time transactions every day. And, that architecture can be easily provisioned and tuned to handle any spikes in transaction processing that may be related, for example, to a particular marketing initiative or time of year, explains Brian Tervo, president and CEO of TIE Kinetix, which provides business-to-business integration, data synchronization, trading partner collaboration, and digital channel communications solutions as both on-premise, licensed software and via SaaS.
According to Steven Katz, VP of sales and marketing with 3PL Central, one of the key ancillary benefits of the leading SaaS-based EDI providers is their ability to map and transform data and then provide the data through a single pre-wired connection to 3PL Central’s warehouse management system (WMS). 3PL Central offers on-demand supply chain software focused on the needs of 3PLs, public and third-party warehouses. 3PL Central's flagship product is 3PL Warehouse Manager, and on-demand WMS built specifically for public warehouse operations. “Through this single, pre-wired connection, our 3PL warehouse customers have access to data from any merchant and/or retailer. Hence, once we have a connection to a SaaS-EDI provider no additional mapping or data transformation is necessary and it becomes a very scalable and cost effective solution.”
Katz also says an additional benefit of SaaS-based EDI is that the same data that is transmitted can also be seen via a customer web-portal. This provides additional functionality for testing and backup. Customer portals also provide increased visibility for all trading partners.
SaaS- and cloud-based EDI services also eliminate the need for organizations, particularly those who have grown through mergers & acquisitions (M&A), to reinvent the wheel. “Let’s say your organization has grown through M&As, so you have lots of different processes, one for billing, one for shipping, one for purchasing, etc.,” says TIE Kinetix' Tervo. “Most SaaS EDI providers have already mapped these out, with pre-defined integration points. This work isn’t new or revolutionary, but it is complex, labor-intensive, and technology infrastructure intensive. We’ve done 75-80% of that work that otherwise would have had to have been done in house.”
Katz agrees, adding that the providers that normalize and store the data (as opposed to those that only exchange data files, with no data storage, and no point-to-point data mapping) provide a very scalable solution. “By having a single connection which is reusable and scalable -- both vendors and customers are able to deploy faster and with less cost.”
Value-added services can also be built on top of a SaaS- or cloud-based EDI solution. TIE Kinetix offers a free tool, its eVision Optimization Utility, that’s designed to help its customers understand how well their EDI integrations and processes are working. “We do quantitative and qualitative analysis of an individual customer’s EDI and then compare that to others’ performance,” says Tervo. The idea is to illustrate how one customer’s EDI stacks up against the aggregate performance of other organizations, which TIE Kinetix TIhas because it collects, stores and analyzes performance data on the EDI transactions running through its service. The customer only sees its own performance metrics; the comparison metrics are anonymous. The performance insight, which TIE Kinetix provides quarterly, is designed to help customers understand such things as workflow error ratios and how to best optimize trading partner relationships.