EDI used by SME to improve customer services and stabilizing trading relationships
Monday, April 9, 2012, 8:00 AM
Various Developments, adoptions and general perceptions of EDI seem to be affected by the organizational structures of most SMEs. This is majorly brought about by the various managers of the specific SMEs. It is like EDI was used both as a necessary instrument for administration, operation, and manufacturing. And also to stabilize trading coexistence and/or to improve customer services. Studies were done and found out that most companies had intercompany trading relationships and to a greater extend interacted mostly with the initiators of EDI in terms of conducting commercial enterprises. These kind of relationships therefore implied that such companies had to strictly yield to what the bigger customers proposed to avert severing of their dependence relationship with these big companies. For any disagreement could be detrimental to their trading business. However, it is not just EDI that may cause conflicts between smaller companies and their customers. Negotiations of prices, creation of terms of payment, establishment of specific periods of delivery and many more may have an influence on SMEs.
According to the study, it is clear that most SMEs responded quickly to their customers demands by implementing an isolated EDI system. This was however done minimally. Some companies tried to provide links of their EDI systems to their customers though still suffer a setback brought about by the differing requirements of different EDI providers.
Most SMEs seem to have difficulty when it comes to proper organization of their systems or planning their EDI development or implementing a complex internal EDI system. On the general scale, SMEs lack enough resources and adequate experience. For instance, it is true that most of them chose an EDI initiator without carrying out research to land a better vendor. In most cases, they depend on the advice of a specific initiator of EDI system within their offices.
Most SMEs have failed to meet their expectations in that requests by EDI initiators to carry inventory to satisfy the short periods of delivery seem to be ignored. In addition, such SMEs seem to be satisfied with the in house EDI transactions without consulting the EDI starters. For example, they have established vendors with less experience to operate their EDI systems. Despite the fact that most SMEs were not warned about the subsequent expenditures after the initiation of EDI, quite a number expected profits from these EDI systems. Some went ahead to decline demands from their customers due to the gain made in terms of market advantage.
This form of technology, in a nutshell, could be of long term significance to most SMEs provided that they have a positive attitude towards EDI. It should however be noted that EDI system is not the panacea to the problems facing SMEs. Proper management must come first. From the study, the SME that applies EDI systems in its functions shall realize many advantages. Also, it stands a chance of being independent hence no requirement to heed to terms and conditions of large customers while in their business transactions. Lastly, SMEs may see EDI as an initiative to swindle of their bucks with no much gain from it.
This article is about how the EDI affects the general operations of the SMEs. It analyses a study carried out to determine how EDI is used by some SMEs to not only stabilize their trading relationships with others but also to improve services rendered to their customers.