EDI: full-service or in-house? Fact is, weighing the value of a full-service EDI provider versus an in-house solution is something that companies of all sizes consider. Do the research before choosing the best option for your organization.
In-house EDI requires a large outlay of time and resources. As your business grows, it consumes more time and money. And despite your ongoing commitment to making it successful, the results can leave you underwhelmed. Even annoyed.
Despite that, let’s assume you want to handle EDI in-house. You believe it provides an added measure of control, even though you probably prefer to focus on other parts of your business. You have a team in place, and you are content to let them manage it. And if you’re just starting to think about bringing EDI in-house? Well, we’re guessing you must like the idea of new and complicated challenges.
Let’s start with infrastructure costs. If you’re already doing EDI in-house, you know it’s a sizable investment. If you’re considering it, buckle up.
You need servers and a translator—servers to host your data and a translator to parse it out. Translators start at around $25,000 and can go up to around $150,000. Not inexpensive. And to establish data connections with retailers, you need to work with a VAN and build your own AS2. A VAN has fees, while an AS2 can cost as much as $25,000.
Of course, even the best technology needs people to run it. An analyst is necessary to map each retailer, tracking the specifications of all your trading partners and making updates whenever they change. As your business grows, more people are required. Over time, many of them can end up being the only ones in your organization who understand EDI and your specific needs, and they may also become a point of contact with your most important retail customers. If they ever leave your organization, a lot of intelligence and connections goes with them.
In addition to feeling the pressure to retain existing staff, your team might be working through a different portal for each one of your retail trading partners. The level of manual data entry can also be high, especially if your EDI hardware doesn’t integrate seamlessly with the system that powers your business—an ERP, accounting software, WMS. What’s more, the overall commitment of resources is high—money, people, time—and it only expands as your revenues do.
There’s also the question of what happens when something goes wrong. When you handle EDI in-house, accountability rests solely with your company. It’s great when you have success, but not so awesome when you drop the ball. What’s more, manual data entry can create errors that lead to chargebacks. And chargebacks cost you money. If you’re managing EDI in-house currently, have you really examined the frequency of mistakes? Do you know how your error rate compares to a customer-centric, full-service provider?
If you manage EDI in-house, you need to analyze the amount of time and resources your company is devoting to it. It’s not unusual for people to underestimate the hours required. Some business owners or brand managers find themselves stretched thin, trying to run their business while keeping up with what’s happening with the team that is running EDI. Or the investment in hardware, software, and people continues to grow—and stops making sense. After all, as your business grows, so do your internal EDI needs. Once you are in a cycle of adding staff or technology, it’s difficult to pull back.
Fact is, all business is about considering change and embracing it whenever it makes sense. If you already manage EDI in-house, it’s vital that you analyze its true cost to your company, including the investment of time it forces you to make. And if you’re considering bringing EDI in-house, you need to understand just how much money and time it will cost you.
There is, of course, an alternative to in-house EDI.
Okay, so you probably knew we’d arrive here. At eZCom, we are hyper-focused on EDI—we’ve been working in it since 2000. It’s not shocking that we have an opinion on the subject.
So, yes, we’re biased. But we also know the right full-service EDI provider will deliver value and ROI. In fact, we’re confident we can reduce your overall EDI operational costs while adding capabilities.
When you contract with us, you get the kind of knowledge that comes from years of experience in the category. Instead of developing your own in-house talent, you start working with a team that is completely focused on EDI. From customer support to integration specialists, our team will increase accuracy, enhance data security, and make it easy to expand your roster of trading partners.
We do regular updates to the mapping specifications for hundreds of retailers. This kind of regular maintenance will ensure that you remain compliant with your trading partners and avoid costly chargebacks. A team like ours is dealing with hundreds of different retailers every day—these updates are just a part of the daily work flow. When you add new trading partners, we are prepared and can add them very quickly.
Technical services like testing and maintenance? Done by us for you. And when you make the switch to eZCom, we ensure there is no disruption to your production environment.
There are also the updates to software and hardware—networking equipment, servers, licenses, maintenance, VAN/AS2 fees—it’s all our responsibility and part of an investment in technology that allows us to consistently exceed client expectations.
What shouldn’t you expect to get from a full-service EDI provider?
Now that you know the benefits you get when you work with a responsive, full-service EDI provider, let’s review some of the things you don’t.
You don’t get the stress that comes with managing additional people or building out a team.
You don’t get the headache that comes with hiring new people as your business grows.
You don’t get night sweats from worrying that it’s taking too long for a connection with a new trading partner to be established.
You don’t get anxiety from wondering what happens if the head of your EDI department gets a new job and leaves the company.
When you don’t get any of these things, you do get more time to focus on your business and how to grow it. Even though you should designate someone at your company to manage our Lingo software, their time commitment will be far, far less than it is when they are forced to be the in-house specialist. Time and time again, we hear from clients who are amazed by the hours they saved once they started working with us on the Lingo platform.
Bottom line: with eZCom, you get freedom. Instead of devoting resources—time, staff, technology—to managing EDI transactions, you can invest in areas of your business that are critical for growth and long-term success. You also gain a more robust infrastructure—backup systems will prevent downtime, outages won’t occur, and data will never be lost.
Pros and Cons—In-House vs. Full-Service EDI
Here’s a quick summary to compare the two approaches.
Pros: control, changes implemented on your schedule
Cons: large infrastructure investment, initial and increasing staffing costs, full responsibility for maintenance and any downtime, must update retailer mapping, significant investment of time and resources
Pros: minimal upfront investment, customer support and expert EDI knowledge, regular updates done to retailer mapping, least amount of time and resources required, provider is accountable for seamless operation
Cons: system managed by an outside expert
Whether you already manage EDI in-house or you are considering it, it’s important to analyze the true costs and weigh your options. Feel free to reach out to us for a low-stress, no-pressure conversation to help you decide if our company is a good fit with yours.