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The Top 3 EDI Implementation Challenges for Logistics and Transportation Companies

Oct 28, 2021 9:00:00 AM

Electronic data interchange (EDI) technology enables intracompany communication of business documents in a standard electronic format. EDI has a long history in the logistics and transportation industry, and the technology is by no means obsolete — 80 to 90% of B2B traffic is conducted through EDI.

With its robust security and industry-wide usage, EDI is a popular integration option. Still, as with any IT project, electronic data interchange implementation comes with its own obstacles and unique considerations. Here are the top 3 challenges organizations face when implementing EDI, and how you can address them:

1. Interoperability issues

One of EDI’s biggest selling points is its common use throughout logistics and transportation. However, there are many different EDI formats (UN/EDIFACT, TRADACOMS, ANSI ASC X12, etc.) in use, so interoperability is still a concern.

The nature of global business — logistics and transportation in particular — requires communication not just with your clients, but also with your strategic partners, vendors, and subcontractors; this increases the likelihood that at least one of them will use a different EDI format than you.

Without interoperability, automated processes won’t work as intended. For example, if your EDI system can only read TRADACOMS, and a client sends over a document that follows UN/EDIFACT standards, your system will not be able to automatically capture the data and perform the required processing.

This is an important challenge to keep in mind as you build your EDI system. Ideally, it will be able to translate other EDI languages into your preferred format so you can seamlessly communicate with partners, clients, and everyone else you do business with.

2. Integration issues

You don’t just have to worry about your EDI system working with your partners’ systems — you also have to ensure it’s compatible with your own tech stack.

If your EDI system doesn’t fully integrate with your existing tech stack, you’ll lose out on valuable opportunities for automation. As a result, you’ll likely end up with data silos and poor visibility. Here are some examples of platforms and systems to consider as you build your EDI:

  • Database system
  • User portal
  • Analytics dashboard
  • Website and/or mobile application
  • Warehouse management system (WMS)
  • Transportation management system (TMS)
  • Enterprise resource planning (ERP) system

Another consideration is how much you expect to adjust your tech stack in the next few years. If your organization plans to make significant changes, be aware of how that might impact your EDI integration.

3. Limited resources

Every IT project requires time and effort, and EDI implementation is no exception. Many organizations face a difficult decision: Where will those necessary resources come from?

If you choose to create your EDI solution in-house, your timeline is limited by your team’s capacity. Additionally, it means you’re responsible for maintaining and updating the system (building new integrations, fixing bugs, keeping up with regulations, etc.). Even when implementation is complete, the work will continue to take the development team’s attention away from other important matters.

Hiring additional developers is another option, but due to the tech talent gap, it’s more difficult than ever to find qualified candidates, especially those with EDI experience. Technical fields have particularly long hiring timelines and recruiting and onboarding require sustained in-house effort.

Considering these challenges, many organizations choose to outsource to an experienced EDI outsourcing provider. Some providers even offer dedicated teams of experienced developers who can help you build and implement a custom-tailored EDI system. 

Conclusion

EDI is the foundation of communication and business documentation in the logistics and transportation industry. Poorly planned or poorly executed EDI implementation can make or break your organization’s efficiency, so it’s vital to get it right the first time.

For best results, consider outsourcing EDI development, implementation, and maintenance to an experienced IT partner who can help you strategize for success.

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