|
|
|
|
 | Manual Orders cost 56 cents per line |
| EDI Orders cost 8 cents per line |
| Manual Invoices cost 91 cents per line |
| EDI Invoices cost 8 cents per line |
| Manual Error Rate is 2% |
| EDI Error Rate is 0.4% |
| Fax Orders are 20% higher in cost than Manual |
Improve Customer Service
EDI is also a method of improving customer service. The quick transfer of business documents and marked decrease in errors allow you to fill orders faster. KMart and other retailers have implemented a program called Vendor Stock Replenishment (VSR). VSR requires that vendors maintain appropriate inventory levels in all stores. With VSR, you don't risk having the store run out of your product while you wait for a purchase order. You send stock as your EDI system reports it is necessary and automatically bill the client. It cuts days, even weeks, from the order fulfillment cycle and ensures that your product is always on the shelf.
End Repetition
EDI documents are stored in a mailbox. You can look at the documents in your mailbox at any time. If your customer wants a copy of an invoice, instead of calling you they simply check their mailbox. Imagine the time savings from not having to copy and fax/mail copies of invoices or purchase orders.
Expand Your Customer Base
Many large manufacturers and retailers are ordering their suppliers to institute an EDI program. When evaluating a new product to carry or a new supplier to use, the ability to do EDI is a big plus. Keep in mind, too, that these same companies tend to stop doing business with suppliers who don't comply with EDI.
There are other uses for EDI as well. Universities use EDI to exchange transcripts quickly. Auto manufacturers use EDI to transmit large, complex engineering designs created on specialized computers. Large multinational firms use EDI to communicate between locations.
EDI starts with a trading partner agreement between you and your trading partner. You make joint decisions about the standard to be used, the information to be exchanged, the communications method (i.e. point-to-point or a network carrier called a value-added network or VAN), and when information will be sent. Choice Systems provides a specialized EDI communications network or VAN called the CDR.
You create a document, such as an invoice, in your business application. The EDI translator automatically reformats the invoice into the agreed-upon EDI standard. The translator creates and wraps the document in an electronic envelope that has an ID for your trading partner. Choice's customer systems such as Choice Dimension21® have EDI translation and communications software built-in. The Mediator™ provides EDI communications, translation, and mapping capabilities included.
The communications portion - which could be part of the translation software or a separate application - dials the phone number for the CDR. The envelope containing the document is then transmitted to your Trading Partner or to the CDR. The CDR reads the ID on the envelope and places it in the correct mailbox.
Your trading partner's modem calls the CDR and retrieves everything in the mailbox. The EDI translator opens the envelope and translates the data from the standard form to the format read by their application. Accounts payable creates a check from the electronic invoice.
The key to efficient EDI is to input the data only once. The EDI system does the rest of the work. Data moves without intervention from your business application to your trading partner's application with no additional steps to slow the process. It's that easy.
It is very important that your business application seamlessly integrate with your EDI translation software. No matter which piece you select first, make sure the other can easily talk to it. After you define the document in the business application, you use an EDI mapper to create a map of the business document. Once again, The Mediator® and Choice Dimension21® have EDI mapping software built-in.
With the mapper, you describe the relationship between the data fields in your business application and the EDI standards. With a Choice Business System, this step is already done. You just press the SEND button and we do the rest!
The mapper is an integral part of the overall EDI solution. If both the EDI translator and business application are on the same type of computer, the data will move faster and more easily from one to another.
Choice Business Systems (i.e. Choice Dimension21®) have everything but the modem included. Choice provides a special VAN called the CDR to make your EDI communications as easy as possible.
| EDI translation management software -
for optimum performance the translation
software should be on the same platform
as your business application. |
| Mapper - levels of mapper
implementation or integration vary
greatly from translator to translator. |
| Communications software - can be a
module to the translator, a programming
tool that enables you to write
communications protocols, or a separate
application. |
| A modem - the higher the baud rate,
the faster the communications will be. |
| A VAN - a network that you connect to. One network can act as a gateway to another. (Some trading partners offer a direct connection to their EDI computer). |
Prices vary from free (for very simple one-function products) to several thousands of dollars for full-function applications. The final price you pay depends upon several things: The expected volume of electronic documents. Generally speaking, PC products cost less, but handle only a few documents and trading partners. Midrange EDI packages can be a little more expensive, but handle a much larger volume of EDI. If you anticipate multiple documents or trading partners, a midrange EDI system is a much better choice. The amplitude of the EDI translation software. Some products look like a bargain, but as your EDI needs grow, hidden costs (such as having to purchase new transaction sets) suddenly appear. You may pay more for a program with an integrated mapper, but you'll avoid purchasing overlays and maps in the future.
Some applications are easier to learn and use than others. The more time you spend in training, the more time it takes to get into production mode. If your time frame is tight, look for a translator that doesn't require training before implementation.
Fees vary from software company to software company. Ignoring the hidden costs mentioned above, you can expect the following ongoing charges:
Maintenance fees.
Most companies charge an annual maintenance fee usually a percentage of the translator's list price. This fee should include software updates, standards updates, technical support, and customer service.
VAN charges.
The VANs bill you for transmitting data, similar to making a long distance phone call. Some also bill you for connect time. A fast modem helps to lower transmission costs.
Mailbox costs.
Most VANs charge a monthly fee for maintaining a mailbox on their network. Some base billing on the document (25 cents per document transmitted); others charge based upon the number of characters in each document.
A direct computer-to-computer transfer of documents (uploading and downloading) through a modem requires that both computers can read the same format, such as ASCII text. If you upload a word processing file and the recipient tries to open it in a database program, the result is a mess of characters instead of the expected information.
If you attempt to do EDI without translation, you run a great risk of transmitting data that your trading partner will not be able to read. Many of your trading partners use business applications on computers that are different than yours. (Major retailers and automobile manufacturers use custom business applications on mainframes.) The translator ensures that the data you send is converted into a format that your trading partner can use.
There are a few fundamental differences between a customer EDI translator and one that comes from a software company. A custom translator is very rigid. It is designed for one trading partner and limited transactions sets. Most commercial EDI translators are designed for transacting with many trading partners and a multitude of documents. A customer translator is difficult to update. If the trading partner changes standards or wants additional transaction sets, you can waste precious weeks or even months making the changes to your translator. Updates to most commercial EDI translators are ready almost before your trading partner notifies you of the change. A custom translator is unsupported. There's no one to turn to when you need help. No one to talk you through a difficult-to-implement requirement from your trading partner. Providers of commercial EDI translators offer telephone support with industry experts. High-caliber companies put you in touch with someone who can solve your problem and walk you through the tricky areas.
|
Associate
Access
