EDI Vendor
The term EDI vendor can be used to refer to a number of different
organizations. In the most general sense an EDI vendor is any
company that makes available EDI software or services. EDI vendors
can concentrate on services, like EDI VANs and EDI Service Bureaus,
or they can concentrate on providing EDI software. An EDI vendor
typically also focuses on specific market segments. Some EDI
vendors may focus on specific vertical markets while others may provide
software or services for specific company types - like enterprise organizations
or small and mid-sized businesses. For a company that is brand
new to EDI one of the first and most crucial decisions will be to select
one or more types of EDI vendor.
Selecting Your First EDI vendor
Most businesses begin trading via EDI because they have to. Typically
the requirement has come from a new customer in the form of a "mandate". The
low number of EDI transactions for these types of companies usually
mean a specific type of EDi vendor. For this type of organization
a full service EDI vendor may be the best starting point. Many
VAN EDI vendors and web-based EDI vendors have rate plans that are
very affordable and that provide a full-service experience that does
not require you to learn EDI. As your use of EDI begins to grow
however you will find that the need for a different EDI vendor may
arise. Understanding how and when to make the transition to an
in-house EDI software can be crucial to ensuring that you get the most
from your EDI investment.
Knowing When to Make the Transition
How do you know when your full service EDI vendor is becoming too
expensive? The answer is going to vary on your business and your
level of usage of EDI. As a general rule, however, three factors
influence which EDI vendor you choose: First is the question
of commitment to EDI. More specifically, is your use of EDI a
long-term commitment or are you going to stop within one or two years? Second
is the question of cost; how much are you spending per year on your
current EDI vendor? Finally, consider how many trading partners
are you using with your EDI vendor? How many could you use?
Translating an EDI Vendor
Taking all three of these questions into consideration you can quickly
build a pay-off formula that can help you determine if you should consider
an in-house EDI Vendor. The variables you will use are: (a) Time
- that is - do you plan to use EDI for at least the next 2 years? (b)
Cost - specifically - how much does your current EDI vendor cost you
per year? and finally (c) Connectivity costs - how will you connect
to all your trading partners using your current EDI vendor and how
much will that cost?
The $1,000 EDi Vendor Question
As you start to calculate all three factors keep in mind that there
are EDI vendors like EMANIO that can offer software with AS2 connectivity
for under $1,000! As you can see, with these types of prices
the amount of EDI volume you can send that will make an in-house EDI
vendor a viable alternative can become quite low. Many small
and low volume users of EDI are finding that full service EDI vendors
are simply too expensive as they begin to fully adopt EDI with many
companies paying as much as $1,000 to $2,000 per year on EDI charges. As
you begin the process of selecting your EDI vendor make sure to look
at it from a long-term perspective as well as a short term one. |
