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Tonya Vinas

Guide to Electronic Data Interchange (EDI) for Small Business

This e-commerce standard can reduce purchase-order costs and keep big clients happy

By Tonya Vinas, Writer, Editor, Researcher, Tonya Vinas

Electronic Data Interchange (EDI) gives businesses a secure, electronic, point-to-point connection to exchange documents — traditionally related to purchasing, but it works for all types of documents. Businesses become involved in EDI either to reduce their own costs or in response to a customer mandate. Often, it is a larger company pushing use of EDI onto its smaller trading partners.

If you are implementing EDI in response to a customer mandate, the customer may have contracted with an EDI provider to recruit its suppliers. In this case, that provider will lead you through the process. If you are implementing EDI on your own, you will need to choose an EDI supplier.

Either way, EDI should bring these benefits:

  1. Remove costs of manual document exchange.
  2. Decrease errors.
  3. Maintain a fast and secure way to communicate with trading partners.
  4. Move information faster in order to reduce inventories and respond to customers quicker.

Action Steps
The best contacts and resources to help you get it done


Find a vendor that's friendly to small business

Unless you have a staff that has expertise in building and running EDI systems, go with a vendor.
I recommend: Get It Done: Two that target small business include: Sterling Commerce and DCAS Software Solutions.

Find an application that's friendly to your software

Reduce the problems of ramping up EDI by starting with a system that's compatible with you already run and know.
I recommend: Get It Done: Intuit, the maker of QuickBooks, lists several EDI providers that integrate with its popular financial software. Search at the QuickBooks marketplace. Also, Microsoft is adding built-in EDI capabilities to its BizTalk server.

Negotiate your best deal

Cost isn't everything, but like anything else, negotiation can lower the price.
I recommend: Get It Done: Talk to lots of vendors. EDI systems can involve the Internet, or not. They can be custom-designed or off-the-shelf. One company that targets small businesses and offers a demo on its Web site is Covalent Networks. The Small Business Adminstration has pointers on how to structure an EDI deal.

Tips & Tactics
Helpful advice for making the most of this Guide

  • Don't resist. Many small businesses still handle purchase orders by fax and phone. This adds expense and is more prone to errors. View an EDI mandate as a positive step toward making your business more efficient.
  • How a company pays for EDI transactions varies. You may hear the term "value-added networks," which are third parties that generally charge a per-transaction fee and sometimes other fees. Other vendors charge a flat fee. Which model is best depends upon the issues that are most important to you and your partners, such as security, number of transactions and reliability.
  • Chill out. Although you may hear a lot of technical jargon about the language used to exchange documents, don't get hung up on this. Think of EDI as an e-commerce program. Set clear goals when working with a vendor and make sure these goals are met. Keep it simple. Serve the customer.

The official source of Electronic Data Interchange (EDI) for Small Business is
the Electronic Payment Systems page at Business.com

EDI solutions
Provider of web-based solutions for exchanging EDI with large retail and industrial customers. Save time and grow your business.
www.covalentworks.com
Symantec is Security
Comprehensive protection solution with lower costs and better security.
www.Symantec.com
Electronic Data Interchange (EDI)
Compare EDI software using Capterra's free, comprehensive directory.
Capterra.com
Electronic Data Interchange (EDI)
EDI Compliance in a Day. Any trading partner or industry. Contact us today.
www.infoconn.com

Recommended Solution Providers

Covalentworks: EDI
CovalentWorks is the leading EDI service company for sending, receiving, and processing Electronic Data Interchange (EDI) transactions. We provide EDI solutions to help your company grow and add to your bottom line when

EDI-Bridge: Integrating Accounting Software with EDI
EDI-Bridge software lets you link your accounting software to your EDI software.

EDI-Center: EDI resources
The EDI Center provides EDI resources for the retail business community. They teach employees about EDI and support of EDI program. Their directory has many links to consultants, equipment and more.

Easylink: EDI
Business automation company Easylink offers EDI solutions tailored to the small and medium sized business.

Extol: Business Integration
EXTOL software applications allow businesses to integrate their other software applications.

WEDI: Electronic Data Interchange for the Healthcare Profession
WEDI is dedicated to improving and facilitating the flow of information for the healthcare profession.

Fedbiz: Federal and Department of Defense Electronic Business Repository
This official government site offers EDI information for business owners who want to do business with the government.

Pubnet: EDI for the book industry
Pubnet is an electronic data interchange service for the book industry. Pubnet helps the book industry develop electronic purchasing systems.

Best Sites to Learn More

SBA
Planning for EDI implementation.



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