Consolidating EDI and B2B Systems to Reduce Costs

It is common for large companies to have multiple EDI and B2B systems in place in different geographical regions, divisions, subsidiaries and in newly acquired companies. It is also common for large companies to try to standardize key processes across these locations to reduce costs. For many of the same reasons that companies seek to update different instances of SAP onto one instance, companies are seeking to do the same with their disparate EDI systems.

Think about this - one company I was working with recently has doubled in size since 2006 as a result of many acquisitions. Nearly all of these acquisitions came with their own EDI department and EDI system. Each of these systems would have a cost that includes resources like the following:

• 1 EDI Manager (full-time)
• 5 EDI specialists (full-time)
• 1 Database Administrator (part-time)
• 1 IT standards team (part-time)
• 2 IT software engineers working on integration projects (part-time)
• 3 SAP solutions specialist defining business process and data integration requirements (part-time)
• 1 Communication/Security specialists (part-time)
• 1 IT Business Analyst (full-time)
• 1 IT Systems Analysts (part-time)
• 6 Business Process Specialists (part-time owners of business processes and different database applications)
• 1 IT Help Desk person (part-time)
• 3 IT Managers (part-time)
• 1 IT Network Administrator (part-time)
• 1 IT Data Center/Server Manager (part-time)
• 1 IT Web Portal Specialists (part-time)
• 2 IT Project Managers (part-time)
• 3 Directors of Business Units (part-time)

The above list reflects typical IT resources involved in a mid-sized company's EDI initiatives and represents some serious costs (assume $1 million annually). Let's now multiply the above resource costs by 8 different divisions and subsidiaries(total $8 million annually). Next add the amount of annual maintenance/support/upgrades/training for 8 different EDI translator systems (assume $2 million combined costs annually). Yikes! The total could easily top $10 million per year to support 8 different EDI environments and initiatives. You can see why aggregating these onto one shared EDI/B2B solution or service on one instance of SAP across all divisions and subsidiaries would be desirable.

That is a nice concept, but all of the EDI messages, EDI translator maps and application integration maps are specific to the various IT environments and database applications in use. It would be very difficult to ask your internal IT department to switch all of these processes over-night. There needs to be a migration strategy. If your strategy is to standardize processes on SAP and if possible on one instance of SAP, then you may want to also look at standardizing your EDI/B2B systems on one EDI solution or service that is aligned with SAP so it all happens at the same time and in the same project.

SAP is developing, both internally and through partners, Enterprise Services Repositories strategies for EDI/B2B that are designed to make these issues much simpler and less expensive for all. It may be worth understanding SAP's strategy before embarking on this journey.

If you would like to discuss this topic in more detail please contact me.