Why should you opt for outsourcing EDI?
Eliminate manual work & error caused by lack of accuracy with EDI. Outsourcing aid in integrating EDI with standard formats, such as EDI 834, 850, 267/277 & much more. In this article, we will learn the benefits of EDI and how a managed service provider assists companies to accelerate in changing markets.
Electronic Data Interchange has been popular for over 20 years and is widely used in eCommerce as well as the Healthcare service sector. The computerized data transmission method has minimized overhead pressure to remember data, monitor them, and manage them regularly.
When observed in an IDEA Exchange, it was found that the distributors have increased from 2017 to January 2020 by 23%. Additionally, the number of monthly documents has increased by 235% and monthly kilo-character traffic by 101% from 2006.
Need For An EDI System
Paperless data transmission is easier and quicker. It’s a pure relief from assigning personnel to send and receive critical information and keep track of its safety.
The augmented electronic exchange of information between the parties is achievable without the need for human intervention. EDI makes managing multiple payers easy without leaving any room for error.
The emergence of this technology was to clear the conflict and struggle of managing a pile of complex logistics operations. EDI facilitated the enormous information to track and manage without the need for paper to pen down the data and manage the limitless amount of paper.
Today’s EDI is refined, experimenting multiple times to make an integrated system that suits every business needs.
The suite of EDI documents with Invoice or claim transactions can offer a higher return on investment to a company.
Today’s most companies handle EDI operations either in-house or outsource them. However, companies manage EDI operations with a hybrid concept as well, where the companies have minimal resources to manage EDI while adding an outsourced team when needed.
Other than limited resources and budget, other aspects may push companies to outsource EDI solutions.
Retirement of Staff – When a valuable staff is relieved, the company faces a knowledge deficit, and filling it immediately is challenging, especially when you have an ongoing project.
New ERP Integration – Technology changes with time so, infrastructure needs changes to comply with new systems.
Outdated Systems – When the system is outdated, companies need to either upgrade them or replace them with modern solutions.
Other Challenges With EDI Implementation
Regardless of the affordability of computer infrastructure, it took a lot of time and effort to align the infrastructure with company culture and needs to facilitate business processes effectively. This forced organizations to partially rely on practicing the legacy paper process to manage continuous flowing data.
Moreover, many companies have convoluted processes, and moving them to a standardized practice, such as the EDI, can be a challenging task.
Despite multiple efforts to align the EDI infrastructure with business flow complying with the standards, setting up can cost more than expected.
In addition to preliminary implementation spendings, the training of the staff, and sometimes customizing the infrastructure may ask to shred more budget.
There is another reason for you to reconsider implementing EDI in-house. Without a complete understanding of the implications, standards, compliances, and effects of this technology on your future business can highly impact it.
Understanding the EDI Standards
Computers have become savvy and can perform tasks astonishingly quickly, such as crunching numbers, storing music and videos. Computerized transactions are faster than human calculation and data transmission. Additionally, with the emergence of EDI standards and transaction sets, electronics can identify the patterns to outperform humans.
The HIPAA standards set rules for EDI providers to follow when using EDI transactions for critical data transmission. These standards categorize documents according to the type, form, and shape in order to exchange correct information. All you need is to follow the rules, place, and extract the information needed to feed to the internal information for a complete document transfer.
The commonly known EDI Standards are ANSI X12 and EDIFACT. ANSI X12 EDI format was crafted by the American national standards institute, which is now being followed by more than 300,000 companies worldwide.
EDIFACT, on the other hand, was developed by the UN as a second and most important EDI standard, especially for administration, commerce, and transportation.
Connecting With the Right Business Partners To Manage EDI
Not considering the company’s culture and other aforementioned perspectives may not allow the organization to take complete advantage of EDI. Considering association with an EDI outsourcing team can considerably solve all integration and future EDI implementation needs.
Communication channels play a vital role in distributing or exchanging valuable documents. Organizations looking to implement EDI solutions must pick the right communication model encompassing combinations of technologies. The below-mentioned models are the solutions that can offer the right EDI solution suitable to your business needs.
EDI can help organizations communicate with business partners through a secured medium – VAN. Outsourcing or a professional EDI managed service provider has the prowess to integrate the right approach to facilitate EDI.
This Network model is a single connection that goes to the preferred provider, which removes the complexity to translate and process documents to exchange with the business partners.
This model is often used by the managed providers for the organization to establish a direct connection with the business partners for the exchange of high-volume documents while managing the low-volume documents.
Direct Connection Model
The simplest yet time taking and effortful model that organizations use. It’s simple because you can reach every business partner directly by establishing a direct communication channel. However, reaching each partner can be time-consuming and overhead.
This model also demands purchasing of a software package to enable numerous communication configurations to set up a communication channel, which makes the process complex.
Along with managing the complexity of document processing and managing, there are other benefits of lending your EDI implementation service to a managed service provider.
Reasons to Look for Managed EDI Service Provider for EDI Integration
EDI outsourcing brings confidence to stay competent and aligned with the changing market needs. You do not have to overburden yourself to underline the right model implementation or train staff to follow the preferred standard and customize with changing culture and trends.
Having a benefactor besides can take up all the daunting tasks allowing you to work through crucial tasks such as product creating and marketing.
Outsourcing EDI can save a lot of time, deter you from making mistakes that can cost you gravely. Reasons for you to handover EDI integration are –
Easy Access to Diverse Skills
Having incompetent or limited resources may not allow you to take advantage of the complete skill set of an EDI provider to facilitate even complex tasks. The managed service provider can handle the complex steps of implementing EDI and mapping utilization which further assists in managing software, hardware, and applications. Moreover, you get support to integrate back-office systems like ERP and other third-party resources.
The managed service provider can aid in updating your existing system. EDI can be an exorbitant affair to make , hence giving the responsibility in the hands of skilled staff can keep your business on track even during rippling market changes.
This advantage of outsourcing EDI is proportional to the former one. With the assistance of the right service provider, you can easily switch from outsourcing to in-house EDI and align them with the organization’s objectives and culture.
Outsourcing does not require dedicated infrastructure, nor does it require trained staff to assist. Managed service providers can combat with skill and agility to streamline company culture and goals and proffer substantial solutions to reproduce long-term ROI. Hence, companies are free from incurring the cost of infrastructure and human resources to manage and maintain EDI solutions.
Certainly, the combination of the right skill set with technology can enhance business efficiency. Additionally, reduced cost for buying and maintaining infrastructure can allow companies to spend more on marketing, which helps them outreach maximum. Managed providers assist companies to deliver a new level of information, intensifying performance and trade between business partners.
Outsourcing EDI to a third-party provider can simplify the management of your EDI solution. A managed provider can handle your back-end ERP systems, which helps in amplifying overall systems reinforcing accuracy in data processing and transmitting thereby escalating business cost and competitive edge in the market.
To Conclude –
Integrating EDI solutions can significantly improve businesses’ data quality, data security and provide the requisite ability to carry audits. EDI cost-effectively simplifies data transmission providing an unparalleled and competitive edge to the company. However, with the assistance of a reliable and dedicated IT professional services provider can transform the existing organizational structure that positively impacts its culture and future endeavors.
Alicia works with the editorial team of A3logics, a leading company offering IT consultation services. Exploring the latest technologies, reading about them, and writing her views have always been her passion. She seeks new opportunities to express her opinions, explore technological advancements, and document the details. You can always find her enjoying books or articles about varied topics or jotting down her ideas in a notebook.