The Ongoing Relevance of EDI Part 4 – EDI's Impact on Business; A Conclusion

The Revenue Impact of EDI:

Both average and best-in-class implementations of EDI have resulted in substantial revenue gains for businesses.  Revenue gains are proportional to the degree to which EDI has been implemented across all business operations, both for internal processes and processes that deal with external stakeholders and trading communities.

The cost budget analysis which we discussed in our previous post, only represents EDI implemented for the basic fulfillment (order, pick, pack & ship) aspects of a business. The basic EDI represented in our last post is related to the following base supply chain transactions; purchase order (EDI 850), purchase order change (EDI 860), product information (EDI 832), invoice (EDI 810), advance ship notice/manifest (EDI 856), the remittance advice (EDI 820) and acknowledgement(s) (EDI 997).

The additional revenue impact that an organization could expect would be in the range of 5% to 30%. So, the benefits of a good EDI program can have transformational change to an organization measured as both costs and revenue.  These benefits are only increasing with the advancements that are being made to EDI.

RESULTS OF SOME RECENT EDI SUPPLY CHAIN STUDIES:

Below are the findings of select North American studies. The study groups were formed from a large representation of organizations in the retail and CPG industry.

The two summary findings are for:

1. Industry measured statistics related to EDI/B2B improvement metrics.

2. Best-in-Class performance of companies.

Industry Measured Statistics related to EDI Improvement Metrics

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% Improvement of Core-Business Metrics in Best-in-Class EDI Implementations | Create infographics

CONCLUSION:

From this high level information, one can witness the transformational nature of a well implemented EDI program. The costs and revenue information provided in this article are only a baseline measure of an EDI program.

In order for an organization to further improve its cost and increase its revenues and service levels, an organization has to further automate and integrate EDI across all its other information, with EDI being the base technology to create an operating and service environment that is highly collaborative in nature. Without the collaborative Implementation, an organization will not operate in the most efficient manner.

In the Internet and mobile age, information is being generated and is growing at an exponential and uncontrolled manner. In order for organizations to deal with these oceans of data in a meaningful, disciplined, controlled and automated way only a robust standard such as EDI, can help properly harness this sea of data. EDI and its newer protocols and standards are truly an answer that are very comprehensive, robust and have proven the test of time.

EDI is now coming in to its true potential (which was simply not needed or even possible a decade or two ago); to address the immense, global expansion of data and information. Getting our hands and minds around this data requires a highly structured, disciplined and proven platform, which EDI will clearly provide for the use and benefit of coming generations.