Taking cost out of the chain

EDI (Electronic Data Interchange) has always been seen as a solution for major companies that can support high investment in IT and human resources to gain significant cost and efficiency advantages.

Now, however, the availability of EDI as a Cloud-based, pay-as-you-go managed service, has transformed the opportunities for many smaller companies. But where do the true cost savings from EDI lie for such firms?

Yet typically, at least 80% of orders, invoices, or other documents are compliant and if presented appropriately could pass through multiple business systems entirely automatically.

Firstly, there is massively reduced administrative cost. If data must be extracted manually from a letter, a Fax, or an emailed PDF to input into systems, checked for compliance with information held on several different business systems, and in case of a discrepancy referred to a higher authority, it is easy to see how GS1 and Cranfield have arrived at a range of between £5 and £14 for the administrative cost of order processing. Yet typically, at least 80% of orders, invoices, or other documents are compliant and if presented appropriately could pass through multiple business systems entirely automatically.

That 80% is pessimistic – if data, often itself machine-generated, can pass directly to other systems, the chances of additional errors creeping in through ‘fat finger’ syndrome or otherwise, are reduced to close to zero.