Friday, October 16, 2009

Upfront SAP EDI Costs - Or Pay as You Go

Sometimes I don't write very well. In this article from NPR's Jon Hamilton dated October 16, 2009 he reports that it take only about 1/2 second to transform a thought into words. Sometimes it only takes 3/4 of a second for my thoughts to end up on a blog. I apologize. An article I recently wrote called EDI - $500,000 Invested and it Still Doesn't Work generated quite a few comments that focused on issues related to poor project management. Since that was not a focus of my article, I must conclude I wrote poorly and did not make my point. As I am not one to give up easily, I will try again.

In traditional EDI, in a medium to large size enterprise, one must spend considerable money up front simply to purchase the EDI translator and set-up all the associated hardware, software and integration processes to support it. A company must also invest considerable amounts of money into staffing an EDI team, or hiring consultants, and creating a project plan. EDI standards must be considered, trading partner's surveyed, data formats reviewed, ERP integration strategies determined and communication protocols selected. All of this work is done before there is an ROI. That was the point readers of my original article did not get. So again, all of the infrastructure, licenses, staffing and meeting after meetings must be done in advance of any ROI in the traditional way of running an internal EDI/B2B department.

The new alternative, is to Pay-as-You-Go for EDI and B2B integrations and support it in a cloud computing environment so you can immediately begin receiving a ROI. As I have mentioned earlier, many IT departments are being told to demonstrate a 90 day ROI on any IT investments or don't bother submitting the request. You cannot show a 90 day ROI if you choose to implement a traditional in-house EDI system and department. The ROI is a multi-year effort in most cases. Therefore, IT and business units must either not implement new EDI in the traditional mode, or find an alternative manner of implementing EDI that shows a much quicker ROI.

SAP understands this point They invested in an EDI and e-Invoicing Exchange for SAP users that functions in a cloud computing environment with a subscription business model. All of the EDI systems, global e-Invoicing processes, EDI standards, communication protocols, help desks and EDI expertise is already set-up and available in a monthly subscription model. You only start paying a set-up and service fee when you implement a new EDI or B2B trading partner's processes. You don't need any hardware, software or EDI staff investment upfront.

This model enables you to immediately start showing an ROI. It is the new method and strategy that changing economic times demands from IT vendors.

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

For related articles please read:

Author Kevin Benedict
Independent EDI, B2B and Mobile Computing Consultant

I am a loose canon. No individual or company, no matter how much I try, is willing to be responsible for my comments. So alas, they are mine alone.

No comments:

Post a Comment