Overcoming The Challenges of Electronic Data Interchange (EDI) Implementation

Transcription

1 White Paper Overcomig The Challeges of Electroic Data Iterchage (EDI) Implemetatio by Hite Shah & Ajaa S O V E R C O M I N G L I M I T S

2 I today s global ecoomy, reducig the me ad cost required to sa sfy customer requests are keys to differe a g you from your compe tors. I our last white paper EDI: The Legacy Stadard Co ues to Thrive i Trasporta o Idustry we discussed EDI ad its beefits i Trasporta o ad Logis cs Idustry. Impleme g Electroic Data Iterchage (EDI) allows compaies to hadle busiess trasac os with ay tradig parter usig a stadardized electroic format. EDI eables busiesses to elimiate cost ad iefficiecies from trasac oal processes. I spite of evidet advatages of the EDI system, it ca result i both posi ve ad ega ve effects for busiesses. This white paper discusses challeges of EDI implemeta o ad how to overcome them. 2

3 Challeges of EDI Implemetatio Techology limita os: The IT idustry is co ually evolvig with frequet itroduc os of ew techologies, ad compaies eed to adapt them to remai compe ve i the market. O e these ew techologies are itroduced with the ecessity to acquire ew skills, implemet ew ifrastructure ad other iteral reorgaiza o which ca be a challege, especially for small or medium-sized compaies. So ware maiteace, upgrades ad moitorig EDI system 24/7 whe issues arise play a sigificat role towards failure. Difficulty i mee g chagig busiess requiremets: Dealig with co ually evolvig busiess requiremets is uavoidable. Especially those that require their IT departmet to recofigure/modify/exted their iteral IT systems alog with their exis g busiess parter EDI itegra o. Some chagig busiess requiremets iclude: Impleme g a ew commuica o techology Itroducig ew busiess rules which impact EDI mappig i may cases Add ew valida os, restric os, policies i EDI which compel IT to recofigure/modify/exted the exis g EDI system Scalig your EDI: To scale your EDI, you eed to: Esure your EDI so ware accommodates mul ple sets of tradig parter busiess rules ad documet types. Busiess rules iclude idividual documet fields, data elemets ad busiess rule-drive valida os, like store umber or ship-to loca o Itegrate EDI trasac os ito your ERP systems to improve efficiecy Cosider outsourcig your EDI program to a third party EDI provider Impleme g i-house EDI ca be quite expesive: The cost of impleme g EDI depeds o the approach you take - i-house or workig with a third-party EDI provider. Other sigificat costs are related to EDI ifrastructure, exteral mappig cosultacy, EDI so ware licese fees ad o-goig employee traiig. Icompa ble iteral referece values: Your tradig parter ad yourself may each have iteral referece values such as Product Codes ad Delivery Loca os, but your computer systems do ot hold values of the other party. If you have ot shared values for such e es, the it is o e difficult to match thigs with your computer systems. Missig details o retured documets: Tradig parter may ot be able to import or export all of the data that is preset o the iboud documet, ad which is madatory o the retured documets. Lack of iteroperability, flexibility, ad scalability: May perceive EDI as a data format; it would be more accurate to see that EDI as a system for exchagig busiess documets with exteral e es, ad itegra g the data from them ito the compay's iteral systems. Maagig variety of itegra os is difficult: Orgaiza os may start by ruig a few i-house combia os. But, as the umber ad variety icrease, this ca become distrac g ad preset scalability issues. The et effect of this o the supply chai etwork is sizeable ad has a ievitable cosequece of icreasig the supply-chai costs. Too may stadards: To exchage documets with tradig parters, you must covert the data to ad from EDI Stadard formats, which are cotrolled by a goverig body. But withi this stadard, EDI allows idustries ad 3

4 compaies the flexibility to create their ow rules, which ca be modified wheever tradig parters decide a busiess chage. Some of the formats i use - EDIFACT, ANSI, X12, TRADACOMS, XML, JSON, IMP, CSV, ODETTE, VDA, VICS, HIPAA, EANCOM, ebxml, Rose anet, i-house formats, ad a oal stadards. Ufortuately, may EDI applica os do ot or easily support these cove os, which would the result i expesive upgrades. Chaces that some of your parters are usig a format that your systems caot uderstad is high, so you eed to have a solu o i place that ca traslate the iforma o ito a data that your systems ca uderstad which ca be a overwhelmig task. 10 Cost or service cocers: Costs ca escalate ureasoably, or you are uable to adapt the service to suit your chagig busiess eeds, which arises due to various reasos. For example: A variable pay-as-you-use model, example KiloCharacter chargig, seemed a rac ve whe you started EDI. At that me, the volume of documets exchaged was low. But ow, sice your busiess seds larger documet volumes, it will cost you a lot more. You may have siged for a deal at a desirable price, ad later you foud upgradig cost or extedig the services to be prohibi ve. Some of the problems that frequetly occur eve i stable EDI opera os: Resolvig uackowledged outboud messages Fuc oal Ackowledgemet recocilia o (997, 999, CONTROL) ad FTPS message delivery o ces (MDN). To restart halted processes. Correc g illegal characters processig stoppers. Example: ` (grave accet). Correc o or o fica o of icomplete documets (810, 855, 856) that erred out due to missig or icorrect data. Examples: PO # too short or Part Number. Repairig broke trasmissio (all customers) perhaps a I.P. address chaged. Repairig broke trasmissio (oe customer) perhaps a cer ficate expired. Providig proof of delivery of Ivoices (810, 880, INVOIC) ad Shipmet No ces (ASN, 856, DELFOR) to speed cash flow. Readig ad correc g error messages (864) Select messages always copied to DCS. By resumig AS2 firewall coec os. Example: a port erroeously closed durig a security sca. Performig maiteace rou e - weekly, mothly, quarterly, ad ed-of-year. Upda g o-itegrated prit ad scree etry forms. Upda g customer required modifica os. Example, chagig from ship date to arrival date. By moitorig B2B providers. Examples: EDI outsourcers such as SPS Commerce, True Commerce, GXS, Sterlig, itrade, OB10, or 1SYNC service. Op mizig iefficiet processes. Example: Reduce cut N paste or the umber of clicks eeded to do a procedure. Archival of iac ve customers ad old data. Mii-traiig of I.T. ad customer service, shippig, ad accouts receivable users. 4

5 Factors for a Successful EDI Implemetatio Selec o of EDI stadards: Oe of the cri cal factors i the successful adop o of EDI is the availability of its stadards. By usig commercial oes ad commo message format, the developmet cost ad the risk related to the ew EDI applica o ca reduce. Tradig parter rela oship: To icrease your busiess cycle ad avoid chargebacks its very importat to uderstad the Trade Parter s requiremets. Techology compa bility (hardware-so ware) amog tradig parters: Tradig parters use mul ple hardware pla orms usig differet protocols, ad problems may occur while expadig EDI exterally amog them. Availability of Value Added Networks (VAN): Compaies ca perform busiesses with each other either by coec g directly to the relevat compaies or with VAN. It acts as middlema amog tradig parters, who allows them to place purchase orders, ivoices ad remit paymet automa cally ad securely. Itegrate EDI with the busiess: Highlights opportui es to highlights opportui es to re-egieer the busiess process ad reap further beefits. Itegra o usually cosists of three key ac vi es: The data aalysis por o of the mappig Mappig via the EDI so ware Developmet of ay custom iterface programs or user exits Udertake data mappig: To exchage iforma o data must i a format that complies with a EDI stadard. Mappig describes how each elemet of the origial data, such as a ivoice relates to a EDI trasac o meets with the rule used. The trasac o so ware uses this mappig to traslate the EDI trasac os so the other orgaiza o ca use them. The goal is to avoid the eed for custom iterfaces especially custom edits per idividual busiess parter. The more stadardized the data formats, the be er the system performace ad the less eed for specific programmig. 7 Execu o of the pilot project: Oce a orgaiza o has developed ad tested its EDI system, further tests are coducted i pilot mode, eablig a orgaiza o to refie its system, show the beefits ad esurig that it ca itegrate with busiess parters. 5

6 Future of Supply Chai Web Services/API based Itegra o Web services are a pla orm for applica o itegra o, offerig a model of plug-ad-play, peer-to-peer, cross-pla orm collabora o. Why Web Services? Oe of the primary advatages of the Web services architecture is that it allows programmig laguages wri e o differet pla orms to commuicate with each other i a stadards-based way. Aother advatage is that they work with stadard Iteret protocols - XML, HTTP, ad TCP/IP ad three core techologies. Simple Object Access Protocol (SOAP) - SOAP is the commuica o protocol for web services. It is a specifica o that defies the XML format for messages. It specifies a evelope for exchagig XML documets, a appropriate errorhadlig mechaism, ad the bidig to a specific trasport protocol like HTTP. If you have a well-formed XML fragmet eclosed withi a pair of SOAP elemets, you have a SOAP Message. Web Services Descrip o Laguage (WSDL) - A WSDL file is a XML documet, which describes a set of SOAP messages ad how its exchaged. I other words, WSDL is to SOAP what IDL is to CORBA or COM. Uiversal Descrip o Discovery ad Itegra o (UDDI ) - Are the yellow pages of web services. A UDDI directory etry is a XML file that describes the busiess ad the services it offers. It also icludes several ways to search for the services you eed to build your applica os. Beefits of Web Services 1 2 Iteroperability: Web services, at their core, are techologies desiged to improve the iteroperability betwee the may diverse applica o developmet pla orms that exist today. Web services have the pote al for seamless iteroperability across heterogeeous systems, pla orms, applica os, ad programmig laguages. Stadardized Protocol: Web services uses stadardized idustry stadard protocol for the commuica o. All the four layers (Service Trasport, XML Messagig, Service Descrip o ad Service Discovery) uses the well-defied protocol i the web services protocol stack. This stadardiza o of protocol stack gives the busiess advatages - cost reduc o due to compe o ad icrease i the quality. Layer 1 Trasport (HTTP, SMTP, FTP) Layer 2 XML Messagig (XML, SOAP) Layer 3 Service Descrip o (WSDL) Layer 4 Service Discovery (UDDI) 6

7 Service Trasport Layer - This layer is resposible for traspor g messages betwee applica os. Curretly, this layer icludes Hypertext Trasport Protocol (HTTP), Simple Mail Trasfer Protocol (SMTP), File Trasfer Protocol (FTP), ad ewer protocols such as Blocks Extesible Exchage Protocol (BEEP). XML Messagig Layer - This layer is resposible for ecodig messages i a commo XML format so that messages ca be uderstood at either ed. Curretly, this layer icludes XML-RPC ad SOAP. Service Descrip o Layer - This layer is resposible for describig the public iterface to a specific web service. Curretly, service descrip o is hadled via the WSDL. Service Discovery Layer - This layer is resposible for cetralizig services ito a commo registry ad providig easy publish/fid fuc oality. Curretly, service discovery is hadled via UDDI. 3 Pla orm Idepedet: Web services provide a stadardized, pla orm-idepedet way for applica os ad orgaiza os to share iforma o ad fuc oality. They are a prac cal, cost-effec ve solu o for ui g iforma o distributed betwee cri cal applica os over the opera g system, pla orm, ad laguage barriers that were previously impassable. Sice web services iclude HTTP ad XML-based protocols icludig SOAP ad WSDL, they are hardware, programmig laguage, ad opera g system idepedet. 4 Reducig Cost: All the above beefits add up to savig cost. Web services take advatage of ubiquitous protocols ad the web ifrastructure that already exists i every orgaiza o; they require li le if ay addi oal techology ivestmet. How API fits ito the curret logis cs ladscape? Supply chais caot afford to ru o EDI techology, ad the oly way they ca keep up is with the help of Applica o Programmig Iterface(API) techology. APIs are the fastest ad most seamless way to access data ad make iformed decisios i the supply chai. Forbes dubbed API as the "digital glue" holdig our persoal ad professioal worlds together, by allowig data to be trasmi ed from oe system to aother i aosecods¹. I fact, Garter says about three-quarters of Fortue 1000 compaies are usig public APIs to grow their busiess ². Ad s ll, most freight ad trasporta o systems have yet to ride this wave. API creates a automated supply chai that allows compaies to ide fy risks, avoid issues before they occur. Set up of APIs is a oe- me process, resul g i immediate access to a e re etwork of carriers - the code is structured ad straigh orward. It requires less tha a week of me from start to fiish to coect a shipper or 3PL ito API etwork. See the differeces ad complemetari es betwee API data itegra o systems ad EDI. ¹ h ps:// ² h ps://developer.ibm.com/apicoect/2014/08/12/api-ecoomy-drivers/ 7

8 API EDI Applica o ad user-orieted Techical stadards based Mobile device friedly Faster deploymet Ad hoc message formats. Drive maily by the service implemeter System of records Parter o-boardig has simple workflow Usage codi os are defied uilaterally by the APIs Typically used for data ad service exposure Value is i both parter rela oship as well as service moe za o Owed by Chief Digital Officer ad IT departmets Parter-orieted Idustry stadards based Busiess applica o friedly Medium legth deploymet Stadardized message formats (orders, ivoices, shipmet o ces). Drive maily by stadard bodies System of egagemet Parter o-boardig requires techical ad busiess workflow Busiess agreemet are o e required Typically used for order-to-cash ad similar supply chai cycles, as well as mul -chai iteroperability Value is i efficiecy i parter rela os Owed by supply chai ad IT departmets Global commerce is fast ad chagig, ad those who ca't keep up will lose. Through efficiet use of APIs, supply chais ca fuc o real- me ad stay ahead of the compe o. 8

9 About Triget Triget is a techology solu os compay that provides comprehesive solu os for busiess problems via outsourced so ware product ad applica os desig, developmet ad quality assurace. Triget serves customers like Idepedet So ware Vedors (ISVs), eterprises ad SMBs i the High Tech, Healthcare, Educa o, Ecommerce ad Maufacturig areas. Triget's solu os help cliets overcome budget, schedule ad resource costraits. To lear more about Triget visit Our Headquarters Triget So ware Ic. 2 Willow Street, Suite #201 Southborough, MA (877) sales@triget.com Other Loca o Triget So ware Ltd. Khaija Bhava, 1st Floor #49, West Wig, Race Course Road Bagalore , Idia +91 (80) O V E R C O M I N G L I M I T S