Should you be consolidating your EDI partners

  March 19, 2012       By Ray Atia
Consolidating EDI accounts leads to fewer business processes, saves money and increases buying power. Hosted EDI first came out a few years ago, and was immediately embraced for a number of reasons. The functions that are offered were unparalleled, and the price was economical. This caused retailers to add documents and increase their requirements of their EDI. This has influenced the number of providers that were partnered with the various companies, and now most companies have a variety of EDI firms that provide them with their services. A recent study that was conducted at Amosoft EDI showed that as many as 34% of suppliers believed that they had to use a variety of EDI providers. Some firms have even stated that their sales rep has said they must use a particular firm. One of the chief issues that have been associated with the multiple providers has been the inability of services to connect with each other. Customers often have their own preferred EDI, and most suppliers have gone along with the particular provider their clients use. Although the client needs to be appeased, this does not necessitate that companies give up on the economy of scale that is offered when they use a single provider for all of their services. Multiple providers end up costing companies more because they have to pay out a premium for each individual service that is used. Instead of purchasing two accounts for $1 each a company could use the same provider and get the same services for $1.50. One example is consolidating EDI documents to a single provider. When a firm is paying 50 cents per document, they can save over $85 just by using one provider to handle 200 documents. Savings are also found because firms can take advantage of a single process to handle all of their documents instead of relying on 200 different providers. Some companies will still try to say that all EDI providers are the same, but this is not true. There are a host of differences that are found in each provider such as the update maps, rates, interfaces and default options. Staff must also be trained to use each one, and this is another way a company loses precious resources. All of these factors increase the true costs that are associated with using multiple EDI providers, and this can be eliminated when a firm develops a relationship with a single firm.