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EDI Service

An EDI service can describe any thing that an outside organization does for your company with regards to EDI. Generally an EDI service refers to:

• EDI service bureau
• EDI implementation consultants
• EDI service VAN

EDI Service Bureaus usually work with very small companies or companies who have a need to do business with a larger company via EDI but whose trading volumes are too small to justify investment in EDI software. EDI service bureaus are common in the retail value chain where suppliers to retailers are mandated to do EDI. Since many suppliers are small, they turn to EDI service bureaus to satisfy this requirement. Essentially, the small supplier desires an EDI service so they can focus on the business at hand and not build knowledge around a non-core process. EDI service bureaus can be expensive and cumbersome as EDI volumes increase, but they are a good initial option for companies unfamiliar with EDI and that have a low transaction volume.

When a company outgrows the EDI service bureau, or when it decides to purchase EDI software, it may be advisable to employ EDI service consultants to implement the EDI software. EDI service as discussed here is essentially EDI implementation. EDI service can be viewed from two perspectives – a technical perspective or an organizational EDI service perspective.

EDI service from the technical perspective is focused on EDI mapping where different segments and fields of the EDI message is “mapped” to the database where the EDI data should reside. This is the most important task of the EDI service consultant. To carry out effective EDI service, the EDI service consultant should have an understanding of the business processes the EDI service supports in a particular organization. To do this EDI service, organizational and cultural issues particular to the organization should be understood.

An EDI Service VAN is an electronic network set up to facilitate sending EDI transactions between several parties. An EDI Service VAN is a service that traditionally anyone doing EDI used to subscribe to, but with the advent of the Internet, EDI service VANs are not as necessary to facilitate business to business ecommerce. Today EDI service VANs have enhanced their services to survive, and they have become significantly more customer friendly and less expensive than before. EDI service VANs are beginning to be able to compete from a perspective of value added services and not only the technical infrastructure for the EDI service.

Choosing an EDI Service can be as daunting as choosing EDI Software.  There are many EDI Service providers who are capable of performing various services and who charge varying rates.  For the small business,  a key aspect of selecting an EDI Service is determining what services will be needed from the EDI Service, initially and in the future, for implementing and managing their EDI.  Specifically, will the EDI Service be involved with your company only during  the implementation phase of the project? Or,
will you choose to continue to use the EDI Service to help manage and process the EDI data? The answers to these questions will help determine the type of EDI Service provider that is right for your business now and in the future.

If the type of EDI Service you plan to use is a VAN or EDI Service Bureau, one important consideration in selecting the EDI Service would be that of maintaining a reasonable level of cost.  As soon as the EDI Service begins to cost upwards of $2,500 to $3,000 per year, any small business might want to consider switching from the EDI Service to an in-house solution.  That’s because the EDI Service,  which charges based on a variable pricing plan, often becomes prohibitively expensive as usage increases.  The EDI Service, in this case, is a viable option only for starting out with EDI. Once your EDI volume has ramped up enough to increase your monthly EDI Service costs significantly,  switching from the EDI Service to an in-house EDI solution would probably be more advantageous.

When you have selected your EDI Service, it’s critical to establish which responsibilities the EDI Service will have and which responsibilities the EDI Service will pass on to you.  As your business grows,  you will probably want to decrease your reliance on the EDI Service and begin to do much of the work yourself. The selection of an EDI Service, therefore, should be based not just on the prices charged by the EDI Service or the type of work the EDI Service is capable of performing.  Another gauge of how valuable an EDI Service would be to your business is the question of how quickly the EDI Service can make you self-reliant.  Whatever type of EDI Service your business ends up selecting, it will be critical to ensure that the EDI Service is aligned with your goals and objectives.