Wednesday, July 8, 2009

Organizational Strategies for EDI and B2B

This week I was onsite with a large multinational company discussing their SAP, supply chain and EDI environments. Participating in these meetings were over 30 people from 5 different parts of the business that were geographically distributed around the globe. In the course of our discussions we learned that many different departments in their organization had their own EDI systems, EDI/B2B staff and unique integrations to their ERPs. Often, the same location even had more than one EDI system. There were different systems for connecting with banks, suppliers, customers, e-Invoicing, transportation and customs. The multitude of EDI systems not only represented an enormous and unnecessary expense, but also a hugely complex integration support and maintenance burden for the company. These kind of EDI and B2B environments can cripple companies in many unexpected ways.

EDI and B2B systems and departments can be complex and expensive. They require many resources across the organization and need continual support, maintenance, upgrades, integration work and 24x7 EDI message monitoring. For more details of the IT and business resources needed to run an EDI system read this article. For details on the information required to implement and support EDI read this article.

It is a best practice, and simply a good business strategy to consolidate, simplify, reduce inefficiencies and avoid redundancies where possible. Companies often experience efficiencies and cost reductions by operating their EDI and B2B systems in a shared services center environment where the EDI systems can be consolidated and utilized by all departments. You can read more of this concept for EDI/B2B here. Sometimes these consolidation efforts involve utilizing a managed EDI/B2B services company that can efficiently provide these services at a lower cost and with a higher service level. SAP has made significant investments in this strategy recently.

To better understand the work required to run an EDI operation follow this link. I wrote this article from personal experience as an EDI Manager for a large electronics manufacturer. This next article link identifies 14 challenges companies should understand about EDI operations and EDI strategies.

It is understood that EDI and B2B connectivity is required in today's business world, and with a good strategy and forward thinking there can be real and measurable cost reductions and competitive advantages realized with a good program in place.

If you would like to discuss EDI strategies you can email me here.

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