5 Most Common EDI Implementation Issues and How to Solve Them

The disruption of the early 2020s left a lot of businesses pondering ways to improve their supply chain management. Electronic Data Interchange (EDI) allows businesses to streamline these supply chain complexities and build strong compliant relationships with suppliers, but even these technological advancements aren’t without it’s own complications.

An effective EDI implementation requires planning. To get it right, you’ll need to take the following steps: 

1. Select the right type of EDI solution. 
2. Ensure compatibility with your supply chain partners.
3. Integrate data across your organisation.
4. Manage security and costs. 
5. Align outcomes with business requirements and goals.

With more than three decades of EDI experience, we compiled a list of the five most common mistakes businesses often make and provided answers about how to avoid them. You can avoid man EDI implementation issues by starting on the right foot, improving ROI and ensuring an effective outcome from day one.

EDI implementation challenges can arise from supply chain complexity, solution selection, data quality, security, and costs. Understanding these common EDI issues before implementation can help you plan more effectively, so you can build a solution that supports your business and trading partners.

Let’s get started.

1. Underestimating supply chain complexity 

If you’ve spent any time in supply chain management, you’ll know that every business is different, which makes it hard to create a one-size-fits-all EDI solution. Your organization may work with hundreds or even thousands of suppliers, all with different capabilities and requirements.

On top of that, different countries, industries, and business relationships have different EDI standards and regulations. You’ll need to understand these requirements before you begin implementation. Failure to do so could lead to costly delays and errors.

These EDI implementation challenges can become more complex as the number of trading partners, systems, and transaction requirements increases. A clear understanding of your supply chain environment is therefore an important part of successful EDI implementation.

Strategies to help 

You can avoid these problems by:

• Conducting a thorough analysis of your supply chain before implementation.
• Identifying your trading partners, their EDI capabilities, and the standards they use.  
• Understanding the specific requirements and regulations that apply to your industry and markets.  
• Developing a flexible EDI solution that can adapt to changing business needs.  
• Working with an experienced EDI provider who understands your industry and supply chain.  

Following clear EDI implementation guidelines at the planning stage can help identify potential compatibility and integration challenges before they affect your trading partners.

Pro tip: Since it’s adoption by Walmart in 2002, AS2 has continued to increase in adoption and popularity as an EDI protocol.

2. Picking the wrong type of EDI

“EDI types” are different approaches to exchanging information, and each has pros and cons. Choosing which one is right for your business is a critical early decision that will impact your entire experience. The main types of EDI are: 

• Direct EDI (Point-to-Point EDI): Direct EDI establishes a single connection between two businesses. This provides the most control, is generally on-premises, and can be cost-effective if executed appropriately. However, it also requires the most in-house expertise to effectively deploy- and can make it hard to accommodate change and/or multiple protocols and standards. 
• EDI via VAN: A VAN (or Value-Added Network) is a private network established by a third-party that is used to exchange documents. This adds flexibility and outsources the maintenance of an effective solution. 
• Web EDI: Web EDI simplifies the exchange of information by replicating paper-based documents with web forms. This method provides a simple way for users to input information that is then converted into an EDI message. WebEDI usually comes from a third-party provider and is particularly useful for businesses (either your own or those within your supply chain) with limited EDI experience.

Each of the above strategies can be executed through self-service options or as a managed service. Managed services are a great way to sidestep implementation issues while, delivering seamless outcomes long-term. Especially if you want to build a hybrid solution that deploys multiple EDI strategies, managed services can significantly simplify this process.  

How to choose the right EDI approach

The right EDI approach depends on factors such as your trading partner requirements, transaction volumes, internal technical expertise, integration needs, and plans for future growth. Evaluating these factors before implementation can help you avoid unnecessary complexity and select a solution that can scale with your business.

Strategies to help    

Modern EDI developments have focused on simplifying engagement. Web EDI is a great example of this, and the simplicity of using cloud-based tools (both from a management and user standpoint) make them critical to effective EDI implementation and long-term execution. If cloud-based tools and Web EDI capabilities are not delivered “as-a-service” they are important to build in-house. 

Fundamentally, if you don’t have the right skills in-house, a direct EDI solution is not the right choice. And don’t forget about your supply chain relationships. Your solution not only needs to match the technical requirements of your suppliers and customers, but also their EDI expertise and maturity. In every EDI solution, you should look for intuitive dashboards that filter reporting, simple upload tools that enable inexperienced users to submit data, and fully integrated solutions that minimize or remove manual steps.  

Choosing the right EDI approach can help reduce EDI implementation challenges by ensuring the solution matches your technical capabilities, trading partner requirements, and long-term business needs.  

Pro tip: Building a hybrid solution that combines elements of multiple types of EDI is a good choice that can improve the flexibility of your supply chain relationships.

3. Corrupted or incomplete data

Getting started with EDI will put your existing data to the test, and requires putting systems in place that will simplify the creation of data over time. A lot of EDI formats, for example EDIFACT, were not meant for humans to read or understand. That means catching and fixing errors is challenging and requires specific (and increasingly uncommon) skill sets. Even where possible, manual error detection is time-consuming and expensive — and can still result in transaction errors.  

Strategies to help   

Bad data often originates at the order level. Typically, you will see incorrect prices, out-of-stock items and/or duplicate orders. The benefit of EDI on data quality is that you’re directly integrating systems, removing human error. But that data needs to be correct in the first place. The best place to check and improve the quality of your data is at the source: your ERP, or your trading partner’s. It’s then valuable to have error detection tools within your EDI system.

Common data quality issues can also lead to EDI transaction failure when information is missing, incorrectly formatted, or fails validation requirements. EDI troubleshooting should therefore include checking the source data, mapping rules, validation errors, and transmission status to identify where a transaction has failed. 

Automated validation and monitoring can help identify EDI errors before they affect downstream systems or trading partners. This can reduce manual intervention and make it easier to identify and resolve EDI transmission errors. 

Pro tip: By striving for a 100% EDI adoption rate, you can minimise the number of manual inputs within your supply chain. In turn, this will minimise data errors.

4. Forgetting about security

EDI brings you into closer contact with your supply chain partners. But by sharing information, you also expose elements of your internal system to those partners and vice versa. International relationships can further complicate matters by adding different legal frameworks, privacy and data protection rules, and cultural expectations.   

Strategies to help

The security risks posed by EDI are partially physiological. Realistically, you were already sharing a lot of the information transferred by EDI with your supply chain partners, you are now just doing so in a new format. However, you need to ensure that encrypted transfer protocols are used, and that proper data storage is undertaken on both ends. That means openly discussing security policies with your partners, ensuring that everyone is comfortable with a set of best practices. 

It’s also important to understand the sensitivity of your data. For example, order data isn’t very sensitive at all. In contrast, invoices potentially reveal commercially sensitive information. However, if you are managing very sensitive data, like healthcare information, more stringent precautions need to be taken.

Security issues in EDI can also involve access controls, authentication, data encryption, and compliance with applicable privacy requirements. Defining who can access EDI data, how information is protected during transmission and storage, and how security incidents are handled can help reduce exposure across the supply chain.

For international trading relationships, businesses should also consider EDI legal security and privacy issues, including applicable data protection requirements and the responsibilities of each trading partner. 

Pro tip: If all of your data is stored in a VAN, or another hosted solution, there are fewer moving parts that you need to consider to deliver a secure outcome. However, you do need to check the security certifications of your VAN — for example, ISO 27001 accreditations.

5. Spiralling costs

Ultimately, EDI is about cost savings. An effective solution will streamline your logistics and supply chain relationships, delivering process, workflow and cost efficiencies. But getting started can be expensive, with possible incremental costs at key stages:

Possible additional costs can be incurred at near every stage:

• Development of EDI skills, organizational structure, and processes. 
• Building an EDI solution or finding an EDI provider.
• Digitization of data and EDI integration across your business. 
• Rollout of EDI to trading partners.

You also face reputation costs when you run into EDI implementation issues. A lot of manufacturers will penalize suppliers if they get EDI wrong because of its impact on production lines. 

Understanding EDI implementation costs

The total cost of EDI implementation can depend on the type of solution, integration requirements, transaction volumes, number of trading partners, and ongoing support needs. These factors should be considered when evaluating an EDI solution to avoid unexpected expenses later in the implementation process. 

Strategies to help

Avoiding cost overrun comes down to planning. You need a clear understanding of your goals, in-house skills and supply chain relationships. You then need to make choices that will deliver a system aligned with the right outcomes.  

When evaluating EDI software implementation, consider both the initial implementation costs and the ongoing costs of maintenance, support, integrations, and trading partner onboarding. A solution that appears less expensive initially may have higher long-term costs if it requires significant internal resources or frequent changes. 

Internally managed systems have the potential to generate the lowest direct costs. However, if that system fails, or requires significant changes or additions to your organization, the benefits of an in-house solution can quickly disappear. EDI via VAN and/or Web-EDI are invaluable assets for a business looking to create a more flexible solution and simplify elements of implementation. 

Pro tip: Managed services can help you get started, or deliver a long-term managed solution without leading to spiralling costs. Read about our managed services and consulting service if you want to learn more.

Don’t forget the bigger picture

EDI implementation requires a clear set of goals and a solid understanding of your supply chain. Be honest about your in-house expertise and remember to consider the requirements of your suppliers and customers; their technical requirements and their level of EDI knowledge

Fundamentally, you should look to simplify the use, management and flexibility of your EDI system at every turn. You need a hybrid-outcome that is able to accommodate the full spectrum of formats, standards, and protocols, while remaining usable by people with limited EDI experience. It’s likely, that will mean using a combination of EDI via VAN, Web-EDI tools, and managed services.

A clear action plan for implementing EDI should bring together your business goals, trading partner requirements, technical resources, implementation timeline, testing, and ongoing support. Following these EDI implementation steps can help ensure that each stage is planned and aligned with the wider supply chain. 

If you’re considering how to implement EDI, start by defining your requirements, assessing your existing systems and trading partners, selecting the right approach, testing transactions, and planning for ongoing management. 

Stay focused on the business outcomes that EDI can deliver. Part of that benefit is supply chain efficiency. But consider the long-term impact, too: a better understanding of your supply chain relationships can upgrade your strategic and tactical decision-making, helping you become a more supply chain-centered business.

Consideration	Execution
Supply chain complexity	Identify your trading partners, their EDI capabilities, required standards, and integration requirements.
EDI solution selection	Choose an approach that fits your transaction volumes, technical capabilities, trading partner requirements, and future growth.
Data quality	Validate data at the source and establish processes to identify and resolve inaccurate, incomplete, or inconsistent information.
Security and compliance	Protect EDI data with appropriate encryption, access controls, authentication, and data protection measures.
Implementation and ongoing costs	Account for solution setup, integration, trading partner onboarding, maintenance, support, and future changes.
Testing and onboarding	Allow sufficient time to test transactions, resolve issues, and onboard trading partners before going live.
Ongoing management	Plan for monitoring, updates, changing trading partner requirements, and continued support after implementation.

FAQs:

BIO:

Lisa Bounds 
Principal Product Marketing Manager, Epicor EDI 

Lisa Bounds is a Principal Product Marketing Manager with the Epicor EDI team. She is an experienced marketing leader with a passion for blending strategy and creativity to drive impactful go-to-market initiatives. 

READ MORE BY LISA BOUNDS