Bringing EDI In-house

Reduce Outsourced EDI Cost

EDI outsourcing becomes costly as volume grows. What was a quick and easy choice a few years ago is now a budget leak. So how do you know when it is out-grown and what are the next steps? And, since most traffic with key customers is crucial to your company’s success, when is leaving it to an outsourcer too risky?

Second, when customer service complaints are too high, a change is needed. Since the cost of automation continues to decline, running the numbers is now appropriate.

Here’s how you can tell that a change may needed: You’ve probably out-grown your system if you pay more than $1,500 monthly. At this level you can automate high volume documents such as Purchase Orders (850), Shipment Notices (ASN, 856), and Invoices (810), while continuing to use a software-as-a-service provider for low volume documents such as Quotes or Routing Advice or for smaller customers.

The benefit: no more per document, per customer, or per month cost.

Overview

EDI outsourcers and some VANs provide integrated activity by reformatting the data from your ERP system to your customers’ EDI format. You can reformat and control your business document flow by buying your own software. A rough estimate for purchasing your own EDI system is $5,000 to $20,000, plus implementation time of 2 or 3 weeks. A good quick check is to learn if your ERP systems version is current (or nearly so). Another is to learn if you’ve an out-of-date EDI system that can be re-activated for only the cost of the annual maintenance fee. Many companies have older systems preceding the move to an ASP.

Today, the time and cost required is less because the ERP-to-EDI system links have been set at literally thousands of companies. Second, because the data is transmitted through the Internet using the EDI INT AS2 standard, lost or duplicated transmissions are infrequent. Finally, the systems have far better control so the slow recognition of errors inherent in a outsourced configuration is eliminated. This means happier key customers.

Dot.Com Internet Vendors

Mass merchants such as Amazon.com transmit an order for each consumer since each has a different ship-to address. This means a torrent of orders, which can drastically increase the cost of an out-sourcer or VAN. Additionally the cost is multiplied by the number of related documents such as the Invoice. The remedy is direct transmission and automatic loading of orders. DCS has experience with your existing EDI, AS2, and ERP systems to help achieve this integration.

Customer Service

Managers should look beyond their list of EDI customers when searching for ways to speed order entry by looking at the wide array of Web sites and forms that your staff accesses. Typically, Sales Orders are gathered from a variety of customer Web sites daily. The process of manually accessing and gathering information means processing is slow and tedious, allowing errors to creep in.  Chances are, the order data from many Web forms can readily be moved to your Sales Order module through your existing Electronic Data Interchange system.

A first step is to look at the Sales Order count. A customer that sends many small orders is ripe for automation. This is especially true because each order then triggers a Shipment Notice (ASN), an Invoice, and a Remittance. Together, much time can be saved.

Second, look for mid-sized customers; those with sales more than $100,000,000. Chances are they have EDI capability, but are not aware that EDI is your preference. A quick call to their EDI person can tell their readiness.

Process automation achieved by boosting EDI integration can be done in small steps as directed by you with a small, joint team of I.T. and customer service people.

Since the EDI skills necessary to achieve these savings are at hand, mini-projects can generate significant savings.  Having an EDI specialist from DCS at hand helps to assist your staff over rough patches. Our DCS Process™ is formalized so your improvements will be done thoroughly, quickly, and economically. We also provide training, which then boosts self-reliance.

Conclusion

When you need to plug a drain in your budget and become more self-reliant, your first step is to contact DCS for a free assessment. With our help you can calculate the ROI and then activate EDI for high volume, key customers or move to a modern version supporting XML that is already adapted to your ERP system. The next step is easy, call or e-mail DCS for more information.

For Additional Information:
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