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Trends in 2011 – From ANSI X12 to the Cloud and Beyond

Railroad-HandcarNo doubt, Electronic Data Interchange (EDI) is well entrenched in the hearts and minds of IT and business pros. It has been around, in various forms and mechanisms, for decades (in fact, according to the American National Standards Institute (ANSI) overseeing EDI’s standards, the first recorded EDI dates back to the 1850s when the railroads and Western Union used the telegraph to communicate business information).  So change is somewhat slower than other, newer information technologies.

But change is coming. ANSI continues to push through adjustments and new specs within X12, the official designation for the development and maintenance of EDI standards.  Smaller businesses who have been slower to fully adopt EDI are making strides. Cloud computing, and Software-as-a-Service (SaaS) are impacting EDI. Regions around the world are ramping up their EDI implementations. With all this in mind, here’s a short list of EDI events and trends you’ll likely see in 2011.

1. ANSI’s ASC X12 (ASC stands for Accredited Standard Committee) continues to evolve the EDI standards. Steven Rosenberg, global standards director with GS1 US, says there are a few X12 developments on the horizon that are significant to EDI. (GS1, by the way, is an international not-for-profit association dedicated to the development and implementation of global standards and solutions for supply and demand chains).  A Data Maintenance Request has been submitted to X12, asking to include additional characters within the approved list of characters, such as Trademark ®, Copyright ©, Degree °, Trade mark - TM, and Euro dollar €. The request also asks to support other languages (Chinese, Turkish, Spanish, French, etc.).  In addition, Rosenberg says there are requests from several X12 users who need additional character sets and language capability, as X12 is used in trading partner relationships in other countries.

The X12 group also is continuing work and discussions on a request to allow a code set version that is different from the transaction set. “This request is the result of users who do not wish to incur the cost of migrating their transaction sets to a newer version in order to support a new code that is only available in a later version,” Rosenberg says.

2 . Cloud computing, and SaaS, will have an even greater effect on EDI in 2011. Cloud computing is still a lot of hype, although some organizations are now operating private clouds and have added quite a bit of virtualization to their IT environment  (virtualization being one of the pillars of cloud computing). That said, EDI’s place in this new world order is found more often in Software-as-a-Service environments, than in a pure cloud. And in the coming year, SaaS will continue to be where EDI’s going.

“SaaS is what we recommend to most of our clients in terms of new systems. Software as a service can get users into the game immediately with minimal cost and liitle impact on internal IT resources - people, hardware and  budget - which are always stretched,” says Jack Ampuja, president of Supply Chain Optimizers and executive director of the Niagara University Center for Supply Chain Excellence.

Scott Bolduc, senior supply chain strategist with SPS Commerce, agrees SaaS-based EDI will be a hot trend next year. “I’m seeing more of the larger or higher mid-range retailers looking more at outsourcing EDI, thus SaaS solutions are going to be looked at closer,” he says. Retailers see the value of moving the requisite resource requirements to EDI outside their own walls and of adding more suppliers to electronic trading by leveraging the outsource partner’s resources. “There’s also quicker implementation when looking at new uses of existing EDI transactions, such as cross cock or direct-to-consumer transactions, as well as adding new transactions.”

By the way, as a side note, Bolduc says more online companies are looking at offering  factory direct to consumer shipments. This will require some facelifts to the electronic purchase orders (POs), advance shipping notices (ASNs) and invoices in the warehouse order requirements of the past. For example, he says, companies may have to add PO Acknowledgments  and introduce Supplier On-Hand Inventory functions.

3. Organizations will invest more time and money in application integration for their EDI systems. Ampuja says the integration of all the supply chain operations is what everyone is striving for. But getting there takes work. “For integrated operations to succeed systems and applications have to be similarly integrated,” he says.

SPS Commerce is getting more requests, in particularly from small and mid-size third-party logistics operators, says Steven Katz, vp of sales and marketing at 3PL Central. “This includes full retailer EDI integration, as well as point-to-point integrations with accounting and ERP packages.”

4. Expect to see EDI upgrades.  In part because the economy is finally thawing a bit and IT pros have a little more leeway in their budgets, but more so because many EDI systems still operate based on the X12 4010 series of EDI transactions. “Many retailers will likely be looking to upgrade to a higher version of EDI as many are still on 4010, which is now 10 years old, and they’ll want to start following what the larger companies are now supporting,” Bolduc says.

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