EDI Made Easy

Posted by Mark Brousseau

The ultimate goal of many small business owners is to see their products on the shelves of major retailers. In order to automate the transmission and receipt of any number of business documents—including purchase orders, remittance advice, invoices, advance shipping notices, hang tags, labels, and catalogue updates—many suppliers and retailers use EDI, or Electronic Data Interchange. However, EDI is Greek to most small businesses and very difficult to perform internally without significant expenditures of money and manpower.

In addition, suppliers that fail to submit automated business transactions according to retailer specifications are faced with pricey penalties known as “charge backs.” For the supplier, these chargebacks can result in fines in the tens or even hundreds of thousands, and irrevocably damage business relationships. For the consumer, this botched paperwork could mean those red open-toe Ferragamo pumps won’t be available for summer and Tickle Me Elmo will be AWOL for Christmas.

Fortunately, dedicated EDI providers can help small businesses automate this complex process, solve compliance issues, improve trading partner relationships, and focus on core competencies, all while reducing business expenses.

“While the manual workload required for non-EDI vendors is prone to errors, delays, and steep overhead costs, a dedicated EDI provider can be an invaluable asset for small businesses,” says Thomas J. Stallings, CEO of EasyLink Services International Corporation.

Stallings offers the following recommendations for small businesses thinking about choosing an EDI provider:

… Educate yourself about EDI, what it is, how it functions, and what it means for your business.

… Research the depth of the provider’s retail relationships, and the number of pre-existing EDI templates they have on file. (Retailers use fields in different documents in different ways. These individual templates, called “maps,” are what differentiates automated business documents for Wal-Mart from, say, Sears.)

… Make certain your provider is equipped with redundant backup that achieves 100 percent compliance.

… Ensure your provider keeps abreast of industry changes. (For example, about four years ago, several retail giants gravitated away from VAN-based EDI transmissions in favor of a new, secure protocol called AS2.)

“Electronic Data Interchange helps bring small business products to the shelves of some of the nation’s largest retailers,” Stallings says.