Cloud-based EDI solutions help businesses automate document exchange, reduce costs, and boost efficiency. Explore top providers and benefits in this guide.
Electronic Data Interchange (EDI) lets businesses share important information directly between computers — no paper, no manual entry. It speeds up transactions, cuts down on errors, and keeps data secure. By automating these exchanges, EDI helps companies work faster and more efficiently.
In this guide, we’ll explore the benefits of cloud EDI solutions like Orderful, highlighting their ease of implementation and flexibility compared to traditional systems. We’ll also cover key considerations to help you choose the best cloud EDI option for your business.
What Is Cloud-Based EDI?
Cloud-based EDI is a software-as-a-service (SaaS) solution that allows businesses to send and receive information through a cloud-based platform. This means companies can exchange data with their trading partners in real time, quickly, and securely without relying on paper or email.
Cloud-based EDI software eliminates the need for expensive hardware and software. Traditional EDI requires buying servers, installing software, and managing IT maintenance, which can be costly. With cloud EDI, the provider handles all the technical aspects — like server upkeep and software updates — so you can focus on running your business.
To access cloud EDI, you need only an internet connection and a web browser. Once you're set up, exchanging data with your trading partners is simple and hassle-free. This makes cloud EDI a cost-effective way to automate and streamline B2B data exchanges without the heavy lifting.
Benefits of Cloud EDI Solutions
Cloud-based EDI makes it easier for businesses to exchange important documents with their trading partners. Here are some of the key benefits:
Cost Savings
Cloud EDI helps businesses save money. Traditional systems usually require expensive hardware and software, but the service provider manages all the infrastructure with cloud EDI software, removing the need for costly equipment and maintenance.
For example, a small manufacturer might switch from a traditional on-premises EDI system to a cloud-based solution. This move helps them save on maintaining servers, buying EDI software licenses, and hiring IT staff. Instead, they pay a subscription fee to the EDI cloud services provider, which includes all updates, security, and infrastructure management. Additionally, predictable pricing models in cloud EDI ensure that companies can budget effectively, avoiding unexpected costs that can arise with traditional systems.
Scalability and Flexibility
As your business grows, cloud EDI grows with you. Adding new partners or handling more EDI transactions without additional equipment is easy. Cloud EDI is a flexible solution that can be adapted to your business needs over time.
Let’s say a growing e-commerce business expands into international markets. With cloud EDI, they can easily onboard new suppliers, retailers, or warehouses without worrying about outgrowing their existing EDI system or purchasing more hardware.
Smarter Inventory Management
Cloud EDI helps businesses keep better track of their inventory. With real-time data exchange, companies always have an up-to-date view of their stock, preventing issues like running low on products or over-ordering, which can waste money.
Improved Security
With cloud EDI, data is protected through encryption and secure access controls, ensuring that sensitive information stays safe. The cloud service provider handles data security, so businesses don’t need to worry about breaches or compliance issues.
A healthcare provider exchanging patient data with a medical equipment supplier would benefit from cloud-based EDI software's encryption and security features. These features protect private medical information from unauthorized access while maintaining regulatory compliance.
No Maintenance Required
One of the best things about cloud EDI is that it doesn’t require businesses to maintain hardware. The cloud provider handles updates, EDI software fixes, and monitoring, reducing downtime and saving time and money on maintenance.
Increased Accessibility and Partner Collaboration
Cloud EDI can be accessed from anywhere as long as there’s an internet connection, so it’s easy for businesses to work with partners, suppliers, and customers no matter where they are. The improved accessibility helps keep business operations running smoothly, even when teams work remotely or across different locations.
For example, a supply chain company using hosted EDI could stay in sync with suppliers across different regions — tracking shipments, managing inventory, and processing payments seamlessly, no matter the time zone.
Automation and Efficiency
Cloud EDI automates many tasks that used to be done manually, like sending orders, invoices, and shipping updates. This speeds up the process, reduces human errors, and makes businesses more efficient. Automation frees up time for employees to focus on more important tasks, improving overall productivity.
Improved ROI
All of these benefits combined — cost savings, flexibility, smarter inventory management, and automation — lead to higher profits and a quicker return on investment. The time saved and the efficiency gained make cloud EDI an innovative way for businesses to grow and improve their bottom line.
Challenges of Cloud-Based EDI
While integrating cloud-based EDI offers many benefits, there are some drawbacks to consider. Here are a few potential drawbacks that businesses may face:
High Dependency on a Third-Party
With cloud EDI, businesses rely on a third-party provider to manage and host the system, which may affect your company in the event of technical issues or downtime. If the service provider experiences a problem, like a server outage, it could disrupt your ability to exchange data and complete EDI transactions.
This dependency also means businesses have less control over the system’s updates and security. While the provider takes care of these aspects, any changes they make might not always align with your company’s specific needs or preferences.
On-Prem-to-Cloud Integration Challenges
Integrating cloud EDI with existing on-premises systems can be tricky. Many businesses have internal systems that aren’t set up to communicate seamlessly with EDI cloud-based integration platforms. The transition might require custom configurations, and it could take time and resources to ensure everything works smoothly together.
Companies using Infor M3 might face unique challenges when connecting to a cloud EDI platform, which may require some customization.
Costly Solution-Switching
The transition can be costly if your business already uses a traditional EDI system and wants to switch to a cloud EDI platform. Some possible expenses include migrating data, training staff on the new EDI system, and any fees associated with breaking existing contracts. While cloud EDI can save money in the long run, the upfront switching costs may be high.
Talk to an EDI Expert
The future of EDI technology looks bright, offering even more streamlined and innovative solutions that can further transform how businesses manage their operations.
If you’re considering implementing EDI or upgrading your EDI system, talking to an expert can help you figure out how EDI can make a difference for your business. An EDI specialist can review your current processes, recommend the best cloud-based EDI solutions, and walk you through the transition to make it as smooth as possible. Working with an expert gives you valuable insights into how modern EDI solutions can streamline your operations, improve accuracy, and make working with your trading partners even more efficient.
Connect with an EDI expert today to learn more about what integrating a cloud-based EDI solution can do for you.
