Have you ever tried to calculate the actual cost associated with your EDI implementation? Whether you have an in-house team of experts or you contract out the work, your EDI costs are likely through the roof.
You probably pay a monthly fee for the number of transactions sent and the number of kilo-characters. On top of that, there are expenses associated with having to build point-to-point integrations to each of your trading partners.
You’re under more pressure than ever to increase the frequency of transaction notifications and types. In addition, you need to ensure they adhere to each trading partners’ guidelines. That means you need qualified EDI experts who can respond quickly to change.
This series of articles will break down the unnecessary costs associated with your EDI implementation, why it’s a burden on your bottom line and how you can cut back on these costs with a platform like Orderful.
The most common EDI cost is the cost-per-transaction model that a majority of EDI providers impose on their customers. The standard billing rate when you use a traditional value added network (VAN), is a monthly fee based on the number of transactions sent and received, and the number of kilo-characters per transaction. Charging based on kilo-characters is extremely unpredictable and your EDI costs will quickly skyrocket.
This may not seem overwhelming as you’re starting to build your EDI network. However, as you add more trading partners and exchange additional EDI transactions, your EDI costs will quickly accumulate. Keep in mind that some transactions like the 214 (Transportation Carrier Shipment Status Message) can be quite noisy. A shipper can request to receive those updates every 15 mins! For example, let’s say you’re dealing with 30 trading partners and sending them 214 transactions. Your monthly EDI cost for this one transaction type alone could potentially cost you upwards of $10,000 with some managed EDI providers.
What’s frustrating is that within a 214 only a handful of data values change each time it’s sent out. For, example the shipment location and time. You’re essentially paying to send much of the same data over and over again, with each 214 you send. On top of that, as a shipper every time you receive a 214 you’re expected to send back a 997 transaction (Functional Acknowledgment), which is an additional cost. With Orderful, we don’t charge you to send or receive 997 transactions.
EDI is an essential component of your business. However, with rising prices and excessive fees, it’s no wonder companies are disgruntled with their EDI expenses. The cost-per-transaction and the number of kilo-characters sent is an unpredictable and inefficient pricing model in today’s business environment.
With a modern platform like Orderful you don’t have to worry about fluctuating costs. Orderful offers a predictable pricing model, based on a monthly fee per relationship. We don’t charge based on volume or character count. This makes it easy to understand upfront, how much you are paying for your EDI relationships.
Find out more about how Orderful can provide you with predictable EDI costs and save you money.< Back to EDI Blog
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