Monday, March 1, 2010

SAP® Information Interchange - SAP's New EDI Solution

The SAP Information Interchange is SAP's new EDI and B2B managed service. It is a managed EDI/B2B exchange service that is operated in a cloud computing environment. It utilizes SAP's NetWeaver platform as a foundation for the service which makes integrating with SAP users that have NetWeaver very simple - almost plug and play. Even those without NetWeaver can activate the service using IDocs or tRFC.

In an article from last week, I made the following statement, "SAP is making a bold move now to eliminate the need for third party EDI and B2B service providers in favor of a simplified SAP supported environment." What does that mean?

Historically, companies would need to purchase an expensive EDI system from some third party specialized EDI vendor. It was a completely different technology platform unrelated to SAP, required in-depth training, specialized EDI knowledge, integration projects, servers, security and 24/7 helpdesk support (related article on EDI costs). This is just to get started. Once the EDI system and resources were in place, long, hard and expensive multi-year trading partner implementation projects would be initiated. For more information read the article, The Process of Implementing EDI and B2B here.

Today this scenario has completely changed. SAP customers can now simply activate the SAP Information Interchange and pay a small set-up fee and then subscribe to the monthly EDI/B2B service from SAP. There is no longer the requirement for servers, specialized training, helpdesk, EDI systems, multi-year implementation projects, etc. For companies wanting to simplify their IT environment, reduce third party applications whenever possible and standardize on SAP this is a big step in that direction. Simplifying IT environments and reducing non-SAP applications is a growing trend. Even in the emerging mobile computing categories companies are choosing vendors like Sky Technologies because they have embedded SAP mobility solutions rather than external third party middleware.

This new methodology for supporting EDI requirements is similar to connecting to the electrical grid that is run by your local electric utility. You do not need to operate the electric power generation plant, the utility manages and operates it. You just need to activate your account with the electrical utility. SAP now has this service available and it is sold through their field sales teams.

You can get more details and pricing by contacting your SAP sales team.

Author: Kevin Benedict
Principal Consultant/Founder
SAP EDI, Mobile Enterprise Computing and Web 2.0 Marketing Consultant
Netcentric Strategies LLC


  1. Companies don't do EDI just to spend money, they do it to accommodate customers and to make their businesses more efficient. And all of EDI’s cost elements - hardware, software, communications, configuration and mapping - are there because they have a key part in getting data into or out of a common format and getting it to or from a trading partner. They all have to happen and they're not going away because they're essential to the process.

    Let's take a simple example. You've got a date field on the outbound IDoc that has a qualifier of "10". Your customer uses "01" to identify that same date. One of three things is going to happen. You'll have a revelation that shows you of the wisdom of using your customer's qualifier, your customer has a similar revelation about using your qualifier (and the Cubs win the series!), or some process between you and him changes your value to his. If you go with number three, something has to do the conversion; having it happen in "the cloud" doesn't mean it doesn't happen. And if it happens, it costs something. Maybe less than it would cost to do yourself, but it still costs.

    So now that we're down to real business terms, let's have a look. You need to get ORDERS IDocs from your customer. The cloud is already connected to the customer so the number of connections that have to be established and tested just fell by 50%. And yes, there has to be a map between you and your customer, but the guys in the cloud have created 100 variations of that map while your in-house team will do - maybe ten? Ever? Which would you pick?

    The laws of economics assure us that everything has a cost - that there's no free lunch. The other main priniciple is that people follow their incentives. So let's compare again. Each person on your EDI team has one job with one paycheck with one company's name on it: yours. Losing that job, or losing career momentum in the company where all of EDI Edith's human capital is invested, is extremely disruptive to her life. She has a big incentive to do whatever's needed to keep her job and further her career.

    On the other hand, to Claude in the cloud you're one of many customers and the pressure on him to maximize margins gives him an incentive to do as little for your company as he can, thus keeping his costs down. Claude also knows that you scrapped your whole EDI infrastructure when you came to his service, so leaving him to take it back in house would be a big effort.

    So now it's Friday afternoon on a beautiful, warm day in June. You've just had a call from a big customer who's furious because he's not getting his ASNs. He can't unload your trucks without an ASN, your trailers are blocking his loading dock and his warehouse staff is out playing basketball because they can't work while your trailers are in the way. You're going to pick up the phone and call either EDI Edith or Claude in the cloud. Who's going to answer, curse under her breath, and get to work and who's going to let it go to voice mail because, hey, it can wait 'til Monday?

    What's the cost & revenue impact of those two different responses? Which cost difference is likely to have a greater effect on your business – the operational one ore the one from the difference in incentives? Which cost differential can be more precisely quantified? And is ANY of this about technology?

  2. Excellent writing and an excellent perspective! I agree that these are very valid points. However, SAP themselves will be supporting SAP Information Interchange. They have the burden and incentive.

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