The Ongoing Relevance of EDI Part 3 – A Comparative Analysis of EDI from the 1970s to the Present

In the first two posts in our series about the ongoing relevance of EDI, we’ve looked at EDI from an historical perspective, and tracked its growth from the 1960s, into the 20th century and on towards the near future.  In this post we’ll begin to take a look at why Electronic Data Interchange has not only survived, but become increasingly prominent over time. 

Proof of EDI’s Ongoing Relevance:

The notion that EDI is no longer relevant or that it has died and has been taken over by newer technologies, processes and procedures, is a completely false premise. In fact traditional EDI, since 2000, has become the single largest enabler of corporate improvements, innovation, and increased revenues due to a substantial decrease in costs (both capital and operating expenses). EDI has provided substantial productivity gains across many industries including, but not limited to, financial services, retail and consumer packaged goods (CPG), manufacturing, distribution, logistics, and healthcare.

In its present state, EDI has completely eliminated the need for capital outlay. Needless to say that the world of EDI has become ubiquitous as a core part of both supply chain operations, and non-supply-chain operations. EDI has grown into a technology that provides great value to any business, small, mid-sized or large, in all aspects of its commercialization and ongoing operations.

Let’s take a look at a comparative analysis of the impact of EDI and the benefits it promises to those that will plan and implement it to its fullest capabilities.

Comparative Analysis by Time – From the 70’s to the Present:

Summarized here are the financial, operational and service benefits of EDI encompassing all aspects of businesses. For ease of reference the table is ONLY discussing Tier 1 organizations, organizations that have an annual revenue of 5 billion and higher. The findings, however can also be extrapolated for organizations of all sizes on a relative basis.

These charts and tables represent the following TIER 1 industries:

1. Financial Services (Banking and Insurance)
2. Retail and Consumer Packaged Goods (CPG)
3. Manufacturing, Distribution and Logistics/Transportation
4. Health Care Industries

Please note that these industry sectors and their related supporting industries make up well over 70% of a country’s GDP. Hence the benefits achieved by these industries and the overall impact to a nation’s GDP, promises the continued use of EDI and its ongoing innovations. 

As we can plainly see, over time, the cost of implementing and running EDI have diminished significantly. But that hasn’t been the main driver of EDI’s continued success, nor has it been the reason for its rise to ubiquity. Cost drivers alone cannot sustain a technology over as much as 5 decades. Instead, it has been the increasingly substantial and wide spread business benefits of EDI which have enabled its prosperity. In our next post, we’ll conclude our series on the ongoing relevance of EDI by taking a look at EDI’s impact on business in more detail.