The Hidden Costs and Vulnerabilities
The decision process to move to an EDI Value Added Network (VAN) should look at risks such as poor VAN performance. The risk is the length of repair time, which triggers key customer dissatisfaction. The stated response time is deceptive, the repair time is crucial. Second, customers demand changes that must be promptly done. Over time your customers will want changes. For example, how quickly will the VAN respond? Is the repair correct the first time? How soon are customer driven changes made? Do they charge for changes? Will an expert cost more? What leverage do you have?
Your network will not make those changes as fast as your team can. Your key customers’ new demand is just another ticket. The delay is even longer for users of mid-sized ERP systems.
Here is a comparison of locating E-Commerce on your server versus in the cloud.
On premise E-Commerce software usually requires an initial one time purchase investment in terms of licensing fees. Also, it implies extra costs related to hardware and installation services as well as data migration and ongoing maintenance fees that are usually charged on a yearly basis for software updates and support. Some examples of typical on premises E-Commerce providers are Extol, Global eXchange Services (GXS), IBM, Liaison, Microsoft BizTalk, and TIE Commerce.
- Easily customizable
- Data security
- High performance
- Large initial investment
- Technical knowledge needed
Network E-Commerce is a cloud based delivery model in which applications are hosted and managed in a service provider’s data center, paid for on a subscription basis and accessed via a browser over an internet connection. Moving to a VAN has an upfront launch cost: 1) Conversion of documents ($10,000 or more), 2) per customer ($500 or more), 3) your time to provide historical data and approve tests, and 4) disruption of your business processes. Two examples of cloud based EDI are SPS Commerce and True Commerce. (Several EDI system vendors such as IBM, GXS, and Liaison also offer network EDI.)
- Affordable low cost solution
- Hosted/upgraded by E-Commerce provider
- Easily scalable
- Limited integration with backend systems
- Lack of data security
- Limited control over the system
A VAN is more expensive because there is a rental fee either monthly or per document. Your company is unique, so VAN “configuration” fees are surprises. Or, you will do it their way.
Briefly, VAN candidates must have deep knowledge of your industry. For example, food producers face EDI differences amongst grocers, mass merchant, food service, and ingredient customers. The second criterion is expertise with your business application’s EDI gateway. For example, Oracle E-Business Suite™ has an excellent gateway, but EnterpriseOne™ does not, so expertise is required. Lastly, if your customer is a small merchant, there may be extra fees for development of maps specific to them.
Data Communication Solution (DCS) provides the knowledge/expertise for process automation; our EDI Specialists will adjust the link between your business application and EDI system for high volume documents, while the low volume discounts such as Quotes and Routing Advice and small, occasional customers continue manually. We have the extensive knowledge of your business application’s e-commerce gateway that EDI VANs do not. Equally important is DCS’ expertise in your industry and segments, such as OEM/after-market or grocer/food service. This keeps your cost low (no conversion to a VAN cost or time spent). Since the cost of automation continues to decline, running the numbers is now appropriate.
Our DCS EDI Specialists ensures the users’ existing processes occur smoothly. Our DCS PROMPT™ Remote Support Service and GROW™ Development Services are standardized services to ensure thorough, quick, and economical solutions. The first step is easy just e-mail us for our no-cost assessment.
Are you a Dot.Com Internet Vendor to Amazon, Best Buy, Target, or WalMart?
Mass merchants such as Amazon.com send you an order for each consumer since each order has a different ship-to-home address. This means a torrent of orders, which can drastically impact your customer service staff. And, for each order you need to send a Shipment Notice (ASN, 856) and Invoice.
If your customer uses a VAN that does NOT mean that you have to use that VAN. Second, if you moved to a VAN and are not satisfied, we can help. Click here to learn the next step.
Here is a short list of the leading service bureaus with which DCS has extensive experience:
- Ariba (with Crossgate)
- eBridge Solutions
- Global eXchange Service (GXS/Open Text)
- Global Healthcare Exchange (GHX)
- IBM (Sterling Commerce)
- SPS Commerce
- True Commerce (High Jump/Accellos)
- And many more small bureaus.
DCS EDI Specialists have extensive experience integrating high volume traffic to your EDI system. The key is to ensure the users’ existing procedures continue to be used.
When you need to plug a drain in your budget and become more self-reliant, your first step is to contact DCS for a no-cost assessment.