Understanding the Benefits of Electronic Data Interchange.
Its been almost 15 years since Mark Hoffman of Commerce One declared “EDI is a dead man walking”. Now perhaps Commerce One was ahead of its time but by 2003, it was the dead man, because in my mind, its focus was on driving people away from something that worked cheaply to a new model that would ultimately be disruptive.
The Lesson? Technology that enables missions critical operations are often the most protected. When companies find something that works, they’ll tend to stick with it. EDI wasn’t “sexy”, but it enabled 20% of the Global GDP for a fraction of the price of any other technology. In some worlds, that is much better than “sexy”.
So now lets take a look at the benefits of EDI and the advantages it offers that continue to drive demand.
Everyone in life wants to be considered as attractive. Some people are naturally attractive and some people unfortunately are not. But beauty is in the eye of the beholder (they say) which gives everyone a fighting chance. Now, if you are in business and are using electronic data interchange or EDI for short then you are extremely attractive to your customers. You are in their eyes cheaper and more efficient to deal with than a competitor trading on paper. Your costs will be lower because you require less man power to process orders, delivery or payments and you are stunning to them.
2.No more Duplication
When documents need to be re-keyed it increases the risk of costly errors. Nobody’s fault. Its just the fact that we are human and we make mistakes. So a better solution is to reduce these errors by allowing EDI to process and retrieve documents faster. It will do the heavy lifting for you whilst providing speed , accuracy and visibility.
Below are the results of a 2013 study on the burden of paper on a non EDI company.
Here are some paper based facts on the average organization:
▪ On average, the cost in labor to file one document is €20.
▪ Between 2% and 5% of an organization’s files are lost or misfiled on￼ any given day.
▪ Companies on average spend €120 in labor to find one misfiled document.
▪ 1 out of every 20 documents is lost.
▪ Approximately 25 hours are spent recreating each lost document.
▪ Approximately 10-12% of documents are not found on the first attempt.
▪ 400 is the number of hours per year the average employee spends searching for documents.
▪ More than 70% of today’s Businesses would fail within 3 weeks if they suffered a catastrophic loss of paper based records due to fire or flood.
▪ It takes an average of 10 minutes per paper document to retrieve, copy, and re-file.
▪ The average document is copied 19 times.
▪ The average worker makes 61 trips to the fax machine, copier and printer.
▪ 60% of employee time is spent working with documents.
▪ 90% of a business’s information is in documents
▪ Each four drawer file cabinet holds an average of 10-12,000 documents, takes up 9 square feet of floor space and cost €1500 per year.
4.Reduce Lead Times
Electronic trading documents can be delivered far more quickly than their paper counterparts, thus the turnaround time from order to delivery can be reduced. By using EDI for forecasting and planning, companies are able to get forward warning of likely orders and to plan their production and stock levels accordingly.Integrating EDI to your business allows documents be processed much faster, reducing lead times and speeding up payments.
5.Increase the Beauty of your Trading Relationship
Beauty is simplistic in nature and electronic documents are beautiful in there simplicity. Accurate documentation ensures accurate supplies and with sequentially numbered documents its easy to pinpoint missing documentation without trawling through piles of paper. Visibility is increased between buyers and suppliers and improves business relationships by dramatically reducing errors that can cause friction.
Visit our website for more information or for our latest blog posts follow @Celtrino on twitter.
Posted on February 17, 2016 in Uncategorized by