The Ongoing Relevance of EDI Part 2 – EDI in the 21st Century and Beyond

EDI Today

In our last post, we discussed the early years of EDI, looked at its adoption in the 1970’s, its early uses for both Supply Chain and Financial transactions, and its eventual rise to prominence by the end of the 20^th Century. By 2000, the massive popularity of the Internet and advancements in both Computing and Communications would open up huge opportunities for the users of EDI. Today, EDI has become much more affordable for those who, previously, could not afford it. Over the past decade of the 21^st Century, organizations of every size, no matter how small, can get into the EDI game and start to enjoy the benefits that only a select set of industries and organizations enjoyed only 10 or 20 years ago.

Simply put, the transformation of the technology operating infrastructure necessary for commerce to flourish has been re-defined by 21^st Century advancements driven primarily by the public Internet and IP-based networks.

This EDI trading transformation is now entrenched across many industries, as it has been re-architected and re-deployed as a widely consumable service on the public Internet, to the dismay of many pundits and gurus who had been claiming the death of EDI in its traditional form. Those who thought that the Internet, cloud computing, and new IP-based protocols would make EDI redundant couldn’t have been more wrong. EDI has adapted and flourished as the industry standard for B2B data collaboration in the modern information ecosystem and will continue to do so. In a nutshell, the Internet has only helped further proliferate the use and adoption of EDI by largely bringing down the costs and complexity to implement EDI within the small, midsize or large enterprise.

EDI for the Foreseeable Future

EDI service delivery has been completely re-engineered, adapted, and improved to take advantage of modern-day technological advancements in server computing and communications. It has become so deeply entrenched into all of our core computing and communication advancements and supporting technologies and practices, that the very base of successful operations are now an integral part of the way information technology will be consumed in the foreseeable future. Not only are Supply Chain and Finance departments feeling the benefits of EDI today but so are users in Sales, Marketing and IT. Hosted, or cloud computing-based deployments of EDI allow for business users to reap its benefits from a data integration & visibility perspective. Furthermore, IT departments benefit from both an ease-of-deployment & management perspective. Essentially, EDI is providing benefits across most if not all aspect of one’s business.

EDI is a unique weapon in that can have a positive impact on revenue growth, cost savings and customer satisfaction. The business case for EDI should include metrics improvement targets that address all three areas!

We all know that since the dawn of the computing and electronic age and now the Internet and eCommerce age, there has been a complete transformation in the technological world. For those who have maintained closeness to the advancements in our technology industry, know all too well, that some of the most remarkable innovations that are being unleashed in the global electronic game are the retrofitting of older technologies with the new forms of information technology management. (Think Mainframe interop with Web Services). This is also very true for EDI. The EDI standards and advancements since the 70’s and more so since the turn of the 21st century, are so great that their benefits can be expected for a long time to come.

But the real drivers for EDI adoption are not simply its ease of use and integration or its ability to adapt to the changing technological landscape. We’re in business after all. It is EDI’s newfound affordability and its ability to impact the bottom-line which are the real strengths of EDI from a buyer’s perspective.

Next week, we will take a look at some of the proof-points for EDI and how the cost of EDI has changed dramatically from the 1970’s to today.

The Ongoing Relevance of EDI Part 1 – EDI, An Historical Perspective

What does Electronic Data Interchange (EDI) conjure up in one’s mind when you hear it, or read about it or personally get involved with EDI? How or why is EDI still relevant almost 50 years after its inception? How will EDI evolve and remain relevant as time goes on? Over the course of the next 4 posts, we will be taking a very close look at something very close to our hearts, here at QLogitek, Electronic Data Interchange, or EDI. With an aim towards developing a better understanding of where EDI has been, how it has evolved and the impact it has (and continues to have) on the business landscape, we’ll be discussing the following:

• An Historical Perspective on EDI
• EDI in the 21st Century – Today and the Foreseeable Future
• A Comparative Analysis of EDI Costs
• The Impact of EDI on Business

An Historical Perspective

Reaction to EDI can range from utter disgust to pure joy, and there can be many feelings that get aroused anywhere in between. There really is no common response. Why is that?

The start of the 21st century was considered by many to be the dawn of mystical innovations that would make traditional EDI obsolete. Businesses, we thought, would find new ways to trade and communicate with their respective stakeholders and their supply chain trading partners and trading communities.

EDI, a very robust technology for trade, was developed in the 1960s, but it didn’t gain traction until the 70s. It became well received and utilized by the Retail and Finance sectors for their Purchase Orders, Invoicing and Payment Transactions. Gradually, the efficiencies achieved by these early adopters started to convince a broader commerce base to also adopt EDI for their business operations. By the 1980s EDI was becoming mainstream.

The last 50 years have produced hundreds if not thousands of EDI and EDI related industries, regulatory bodies, profit and not-for profit organizations that offer Standards, Technologies, Tools, Methodologies, Education & Training and a plethora of EDI resources. These EDI resources support the needs of businesses to use EDI as a core technology to provide Improvements and Productivity for their Supply and Demand Chain operations.

EDI has evolved in the last 50 years as a key enabling technology and a business best practice, as EDI provides a great competitive advantage and as an overall productivity improvement in any business operation, be it supply chain or otherwise.

As the adoption of EDI and its use required, in almost all cases, extensive capital outlay as well as a large ongoing operational expenditure, EDI could only be utilized by large organizations and in some cases by mid-size organizations.

Its use was also required, and in many cases, enforced by the larger organizations, for their smaller and mid-size trading communities to implement and use, if they wished to trade with the larger organization. 

It could be argued that 80% of businesses were not capable of using EDI or an alternate form of communication, thus causing difficulties for companies to grow. The businesses that were smart and capable enough to raise capital for growth had lesser challenges whilst many others suffered growth and competitive challenges.

Due in large part to its continued use, widespread adoption, and realized benefits that span 50 years, EDI can be considered as a primary business enabler. Simply put, its proper implementation typically results in benefits that can be felt across the entire organization.

Today, many successful industries and leading organizations have solid implementations of EDI and supporting processes & procedures that have become their secret to success, growth and productivity. But how is it continuing to be relevant in the 21st century?

In our next post, we’ll explore EDI as it entered the new millennium, and what we might be able to expect from EDI in the near future.