Benefits of EDI

Electronic Data Interchange (EDI)

The benefits of using EDI are being realised by an increased number of company's. Many transmit a substantial percentage of their transaction volume via EDI.

One of the major goals in creating EDI was to reduce the volume of paperwork and many of the clerical tasks involved in processing paper documents. Substantial productivity improvements and/or direct cost savings in company operations have resulted from the use of this technology. Consider these benefits

EDI improves accuracy

Electronic transfer of data eliminates the use of manual data entry and re-keying thus reducing the number of errors which improves availability of product and services. This reduces process cycle time.

  • One time data entry
  • Reduced errors, improved error detection

EDI provides speed

Using EDI increases the speed of document your trading partner receives and reduces the time taken to incorporate the information into their system, thus greatly reducing overall cycle times. For this reason, EDI can be an important component of just-in-time production systems.

  • Reduce lead times
  • Rapid exchange of business data

EDI reduces cost

EDI will lead to a reduction in document processing and costs. By implementing EDI your company costs associated with paper handling, data entry, filing, reconciling and lost documents are eliminated culminating in cost avoidance.

According to the 2008 Aberdeen report "A Comparison of Supplier Enablement around the World", only 34% of purchase orders are transmitted electronically in North America. In EMEA, 36% of orders are transmitted electronically and in APAC, 41% of orders are transmitted electronically. They also report that the average paper requisition to order costs a company $37.45 in North America, £26.38 in EMEA and $23.90 in APAC. With an EDI requisition to order costs are reduced to $23.83 in North America, £20.94 in EMEA and $14.78 in APAC.

  • Elimination of mail charges, postage
  • Higher productivity with flexibility to re-deploy staff overhead
  • Reduce inventory (inventory costs)

EDI provides you with the competitive edge

In addition to improving speed, cost and accuracy, EDI can enhance the business in a number of other ways, informed decision making, improved customer service, enhanced partnerships and improve cash flow.

  • More accurate information leads to improved decision making procedures.
  • Responding to customer needs is the key to continued long term customer relationships. EDI insures that information is accurate and readily available for maintaining a high level of service within a competitive market place.
  • Once you become EDI compliant, even if it may have been reluctantly induced through pressure or urging from your customers, you are the real winner in this win-win situation. EDI makes doing business with your company easier and more cost effective.
  • EDI allows you to instantly turn over invoices on purchase orders. This will greatly reduce your turnaround on outstanding account receivables.