- October 04, 2019
By Frank Kenney, Cleo By taking a proactive approach to EDI integration and ecommerce, and by moving EDI processes to the cloud, manufacturers can more easily navigate the winding pathway towards automating operations while also innovating for brand differentiation and reducing order fulfillment costs.
By Frank Kenney, Director of Sales Enablement, Cleo
Despite a noted rise in the prioritization of smart manufacturing and automation, many daily processes for manufacturers are still manually performed. Of the time workers spend in production, 87% could be automated using already-existing technology. One wide-spread tool that most manufacturers consider as having already reached its full potential could be the key to the doorway to manufacturing automation.
Electronic data interchange (EDI) remains the industry standard for manufacturers when it comes to exchanging shipment notices, purchase orders, invoices and other business documents. However, on-premises legacy EDI translators and value-added networks (VANs) are becoming less fiscally feasible for manufacturers largely due to outdated and inconsistent transaction fees. By taking a proactive approach to EDI integration and ecommerce, and by moving EDI processes to the cloud, manufacturers can more easily navigate the winding pathway towards automating operations while also innovating for brand differentiation and reducing order fulfillment costs.
Why EDI Belongs in the Cloud
Traditional, non-cloud EDI solutions do not have the ability to automate certain EDI processes due to the rigidity of the traditional solutions, which are designed to only perform specific tasks because they cannot natively integrate with a resource or customer management solutions for end-to-end processing. Modern, cloud-based EDI can integrate with other business systems and applications quickly to automate processes like order-to-cash and procure-to-pay. By harnessing the integration capability of modern cloud EDI, manufacturers can more easily keep up with the changes of trading partner demands and avoid becoming overwhelmed with the EDI errors.
Modern EDI systems improve on traditional EDI by adding the pivotal capabilities of advanced coordination, integration and monitoring. These capabilities allow modern EDI to not only handle any type of EDI interaction and integration with speed and consistency, but also easily transform EDI and non-EDI data into any format for ingestion by both on-premise and cloud applications. Implementing modern, cloud EDI is a highly beneficial proactive approach that manufacturers who are trying to reduce expenses and speed up operations should pursue.
Modern cloud EDI offers various benefits for manufacturers, which typically interact with an intricate ecosystem made up of suppliers, trading partners, retailers, and transportation and logistics companies. With so many operators working together in a single ecosystem, modern cloud EDI is crucial for manufacturers looking to retain their competitive edge, and improve operational efficiency. In addition, modern EDI increases monitoring and visibility across the manufacturer’s global ecosystem while reducing maintenance costs and supporting legacy solutions.
Because there are so many partner and customer data requirements that manufacturers must manage – from protocols to support for connections across systems, applications and other data resources – a modern cloud-based EDI solution gives companies even more flexibility than a traditional or non-cloud EDI solution. When manufacturers need to connect legacy, on-premise processes, systems, and applications to cloud applications – which is the case for most businesses today – cloud EDI offers more elasticity and business agility.
Cloud EDI tools put manufacturers in a position to tackle any potential integration challenges that arise, without having to deploy and manage the software and hardware. For example, maintaining an outdated legacy EDI solution can exacerbate already expensive EDI costs due to the software and hardware required for these on-site solutions. Scaling is another factor supported by cloud EDI. From industry to industry, even standardized EDI requirements will vary, which becomes a huge problem when numerous trading partners are involved. Outdated, homegrown, or one-off EDI software will not be able to scale to support all the data requirements necessary to participate in the business’ ecosystem as it grows.
Why Manufacturers Should Upgrade to Modern Cloud EDI
Updating EDI processes and migrating them to the cloud is the most productive and cost-effective means to modernization, especially if the manufacturer is trying to upgrade their ERP system.
Modern EDI refers to more than just a standardized document or format; it’s a data exchange mechanism that also includes the processes surrounding governance, partner onboarding, data orchestration, SLA management, and visibility. The flexibility demanded from modern manufacturers requires a modern EDI solution that is equally as flexible. Because of this, cloud-based EDI integration is essential for manufacturers looking to streamline how they communicate with customers, trading partners, and other members of their digital ecosystem – especially if they wish to do so remotely.
EDI in the cloud doesn’t have to be a pie-in-the-sky wish for manufacturers. Learning how to leverage hybrid cloud integration to remotely and speedily onboard new partners and applications, as well as reduce integration bottlenecks and strengthen connections with suppliers, logistics partners, and retailers through automation, can help manufacturers stand apart from even their most innovative competitors. Many manufacturers are already embracing modern cloud EDI, and those who wish to streamline effective communications through automation – freeing up manufacturers to focus on more important tasks like product innovation, quality control, and customer service – would do best to make their move to the cloud.
About the Author
Frank Kenney served more than 10 years as a research director at Gartner, where he defined the MFT, B2B gateway, SOA governance, and cloud service brokerage (CSB) markets. Before joining Cleo, Frank held leadership roles in product marketing, aligning vision and strategy with integration products, services, and messaging. As an independent IT consultant, Frank helped technology providers create, validate, and implement a variety of business strategies.
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