Top 3 Myths About EDI, Debunked

   

EDI mythsRetail businesses, both large and small, benefit immensely from EDI integration. So why is there so much confusion around the topic?

The truth is, many myths have circulated throughout the business world, and electronic data interchange is the focus of quite a few of these myths. These myths obscure and mislead: among them are the misconceptions that EDI is expensive, complicated and not worth the investment.

Read the top three myths surrounding electronic data interchange, and how we debunk each one of them.

Myth: It's Too Expensive

The implementation of a retail EDI system is incorrectly assumed to be a costly endeavor with little ROI.

Truth: It's Well Worth The Cost

While there is a cost associated with EDI integration, it is definitely worth it. The cost of EDI integration is immediately justifiable. Big box retailers like Walmart and Target refuse to do business with retail fulfillment companies that do not have EDI integration. So, for a direct response marketer, it's actually more expensive to not have EDI integration, because without it you're closed off from potential sources of business. For this reason alone, EDI integration is well worth its initial implementation cost.

In addition to opening new business opportunities, EDI integration reduces the risk of retail chargebacks. Non-compliance with certain retail regulations results in financial penalties, and these chargebacks dramatically impinge upon your business’s bottom line.

Myth: It's Complicated

The myth that EDI integration is complicated has dissuaded many marketers from utilizing an EDI system.

Truth: It Simplifies Your Business

EDI integration helps you streamline your key business practices, which ultimately translates to better overall communication. The language of retail trading is complicated. Since EDI is the lingua franca of retail trading partner communications, being without it means you're missing opportunities to be involved in standardized and frictionless business conversations

Myth: It's Disruptive

It's a common misconception that the implementation process of a retail EDI system interferes with your business practices.

Truth: It Increases Productivity

EDI integration takes little time, and the payoff is near-immediate. Electronic data exchange decreases the manpower you need for manually processing a paper order, which makes transactions flow faster. This enables retail fulfillment companies to redirect those man-hours to more critical business processes.

Computer-to-computer data transfer is also more efficient and reliable: Far fewer errors occur with EDI than with manual data input. While paper orders may take upwards of 10 days to fulfill, EDI integration gets the same orders out within a day.

Myth: It's Full Of Bugs

Many businesses are concerned that once they implement an EDI system, they’ll need to "weather the storm" of bugs that come with new software.

Truth: It's Tried-And-True

Testing and approval are vital components of any good EDI integration process. Your retail fulfillment partner must recognize that testing is critical to implementation because it keeps your retail trading partner relationships on stable, solid ground. Once your EDI integration is mapped, the system is ready for all of your future orders, as well.

Retail EDI technology integration may have upfront costs associated with it, but the return on investment is quick and tangible. Don't fall for the myths associated with EDI integration. Make sure you choose the right order fulfillment vendor so that your road to retail success is properly mapped, tested and approved.

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About The Author

Patrick Moulton specializes in logistics and marketing with 15 years of industry experience. He is currently enrolled in the USC Marshall School of Business Executive MBA program.