Managed EDI vs. In-house Solutions: Which is Right for Your Business?

Some of the most common questions when it comes to doing Electronic Data Interchange (EDI) are related to choosing the best option for a business. Whether a business is just getting started with an EDI solution or is reevaluating their needs, many factors play a large role in determining which solution best fits business objectives. More specifically, these factors may also influence whether a business should consider outsourcing their EDI solution. Let's examine two common approaches to EDI: outsourcing EDI needs with managed EDI solutions or choosing an in-house solution. We'll explore the advantages and considerations for each and what a business should consider before making a decision.

What is EDI Outsourcing?

Before comparing in-house EDI operations to an outsourced solution, it's important to understand what EDI outsourcing is and why it is chosen as an alternative. EDI outsourcing means a third-party EDI provider will manage a business’s EDI program, allowing them to focus on core business functions while leveraging the expertise of EDI service providers like Edict Systems to manage Electronic Data Interchange operations. EDI outsourcing typically includes solutions for common supply chain operations including data mapping and translation, setting up new trading partner connections, monitoring and troubleshooting EDI transactions, and ensuring compliance with EDI standards and regulations. There are many benefits to outsourcing EDI solutions including cost, resource allocation, and competitive advantage, but EDI outsourcing is the best way to maximize any EDI investment for a higher ROI.

One way to ensure a business’ EDI operations are operating efficiently is to invest in Managed EDI. Managed EDI (also called full-service EDI) allows a business to have a dedicated EDI department without having to hire, train, or manage internal resources. Managed EDI solutions provide a way to rely on an EDI provider's expertise to help streamline supply chain activities.

When a business uses a managed service, the provider handles the "heavy lifting" that includes setting up and expanding connections with trading partners, making sure data is in the correct format for internal systems, and identifying and fixing errors. Managed EDI makes it possible for businesses to focus on their day-to-day operations while their EDI documents move back and forth behind the scenes.

The Breakdown: In-House vs. Managed EDI

Here are four key areas to consider when comparing these two options:

1. Cost

In-House: When quickly looking at in-house operations, it may seem as though this option is cost-effective for any business. However, a close look may unveil many hidden costs that are difficult to predict each year. Businesses must plan to cover EDI related software, servers and other equipment, maintenance, fees, and most importantly salaries and other expenses for EDI experts with specialized skills.

Managed EDI: EDI providers offering managed EDI services usually offer payment terms that include a predictable subscription. These pricing models make it easier to budget and allocate resources ahead of time. Edict Systems offers clear, upfront pricing models, so there are no surprise costs for updates or maintenance, no hidden fees, and no unexplained charges throughout the year.

2. Resources

In-House: There are advantages of having an internal team handle any and all EDI operations including managing proprietary information, however EDI operations require a lot of time from internal teams, taking resources away from other in-house initiatives or major projects.

Managed EDI: EDI outsourcing lets businesses benefit from EDI automation while using internal resources on core business initiatives. Experienced EDI providers will securely handle all data and EDI transactions, adhering to EDI standards. By outsourcing a portion or all of an EDI program, a business can become more agile, more competitive, and more adaptable to industry conditions.

3. Expertise

In-House: EDI is its own digital language and requires expertise to handle all transactions. While it's possible to have enough resources to cover any and all EDI needs and related issues, it can easily become challenging, especially if internal experts leave the company or have to work on other initiatives.

Managed EDI: One large advantage of outsourcing EDI with a third-party provider is access to a team of EDI experts. At Edict Systems, our customers gain access to our dedicated customer support teams at no additional charge. Our experts help businesses get out of the business of doing EDI so they can focus on what they do best.

4. Support for Needed Changes

In-House: Reliable in-house programs may support the needs of a current EDI program, but a business should consider how changes would affect their current setup. As a business adds more trading partners their workloads will expand and additional resources will need to be added.

Managed EDI: Managed EDI solutions are designed to scale with a business, whether they have 5 or 500 trading partners. The major benefit of these programs is that the process stays exactly the same for internal teams as they can rely on the EDI provider for any changes, issues, and support.

Edict Systems' ManagedEC Solution

ManagedEC combines cloud-based EDI connectivity, project management, technical expertise, and a dedicated EDI Coordinator into a single outsourced EDI solution that lowers costs and increases efficiency. By eliminating the need for EDI-related hardware, software, and communications, ManagedEC reduces the cost and complexity of maintaining in-house EDI operations and increases the value of supply chain EDI operations. This solution encompasses the business functions, infrastructure, and support needed to streamline operations. Together with our services like data mapping and translation and web-based EDI, ManagedEC allows buying organizations to achieve 100% supply chain connectivity, helping them expand their trading network and streamline operations. 

Benefits of ManagedEC

We designed ManagedEC to help buying organizations of all sizes streamline their supply chain operations. ManagedEC allows businesses to:

• Eliminate the need for EDI-related hardware, software, and communications
  Significantly lower EDI transaction total cost of ownership

• Utilize technical, project, and support staff for higher priority business initiatives

• Maximize EDI participation with WebEDI and proactive onboarding programs

• Offer more efficient testing and certification of EDI suppliers and increase responsiveness to their supplier community
  
  

How to Get Started With ManagedEC

The path to ManagedEC starts with a ManagedEC Assessment. The EDI experts at Edict Systems can provide valuable insights on current and future operations, helping businesses analyze their current supply chain EDI operations, costs, and potential program improvements with ManagedEC. During the assessment our experts will:

• Evaluate current infrastructure, applications, processes, integrations, connections, transactions, and maps

• Analyze current trading community, service levels, and supplier participation levels

• Assess current and future business plans related to supply chain EDI operations

• Present current total cost per EDI transaction and ManagedEC cost savings

• Provide strategy for migration to ManagedEC and potential areas of program improvement
  

For any questions regarding an assessment or how to get started, contact our team.

The Verdict: Which Option is Better?

The answer to which option better serves a business will depend on many factors, and requires a business to look at their current processes and future initiatives. Fully in-house operations may be ideal for corporations that want total control and have the budget to hire a dedicated staff. For other businesses looking to maximize their return on investment (ROI), lower costs, and work with an experienced provider to streamline their supply chain, managed EDI offers a reliable framework for a successful EDI program.

Read: 5 Reasons to Switch to a Fully Outsourced EDI Solution

We do EDI so You Don’t Have to^®

Edict Systems’ EDI solutions allow buying organizations of all sizes to eliminate in-house EDI translators, expand their partner network, and improve business operations by streamlining processes. For any business ready to stop worrying about EDI and start focusing on important goals, our experts are ready to prove how approachable and successful a managed EDI solution can be. Ready to get started? Learn more about Managed EDI here.