Your EDI Resource

Comparing ROI for Integrated Electronic Trading

Posted by Shandra Locken on Fri, Nov 03, 2017 @ 08:30 AM

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Picture appears courtesy of GotCreditThis blog was written by Karen Blood of GraceBlood LLC.  Most retailers and e-tailers, and an increasing number of other businesses, will only purchase from suppliers who will do business via EDI or some other B2B electronic trading platform.  Not to worry:  this mandate can have tangible benefits for your company too. These benefits are both strategic and operational.  B2B electronic capability can strategically give you an advantage by strengthening your relationships with customers and vendors, improving loyalty and long-term alliances. Your “EDI-enabled” business opens the door to increased sales over the same channels – improving your bottom line.  In the process you become more competitive and able to thrive, directly affecting the value of your company.

Operationally, B2B electronic trading reduces both the time and human attention required to complete data entry and order processing. Your integrated capabilities deliver faster order processing with fewer manual errors and faster delivery times which increases customer satisfaction. Decreased operating expenses and improved accuracy in fulfillment and procurement can deliver profits and improve cash flow.

While strategic benefits can be difficult for which to calculate Return on Investment (ROI), we can easily do so for the operational benefits.  For suppliers, a decision on how best to approach a mandate to retain or win the customer’s business should include a careful consideration of ROI.

While many supply chain companies operate with a mix, let’s consider ROI using three approaches, one manual and two integrated:

  1. web-trading, where your orders are picked up, entered, acknowledged, and processed through to an invoice either manually or by visiting a website
  2. on premises integrated, where your routine orders appear in your order processing system and are processed through to invoice by an intermediate system that is located and operated within your business
  3. cloud-based managed services, also integrated and where your routine orders appear in your order processing system and are processed through to invoice through an intermediate system located in the cloud and is operating transparently

ROI may also be useful in evaluating a move from web-trading to one of the integrated approaches or between them.

Let’s look at an example that you can easily tailor and use. First, we calculate our own average cost to process an order. Add up the annual manual or non-integrated order processing expenses – from receipt of order, to entry, to acknowledgement, to shipping notice, to invoice – considering all personnel, overhead and equipment, and adding in any fees charged by customers for using their portal or for failing to comply with their preferred trading approach. Divide this annual total expense by the total number of sales orders processed during the year.  This becomes your cost to process an average order.

Aberdeen studies have estimated typical savings with end-to-end electronic processing of an order as compared to manual in the 60-75% range.   This example projects an average distributor for three customers integrating four documents over the end-to-end order to invoice process and trading 500 orders/month while conservatively projecting a 50% savings for integration over manual processing.

Click below to download a spreadsheet for use in calculating and comparing your own Return on Investment for B2B Electronic Trading. Only a few additional inputs are needed, and these are in yellow. Besides the Average Cost per Manually Processed Sales Order, count your top routine customers and determine the total # of orders you receive from them in a year. Typical transaction types of documents to integrate are the inbound Sales Order, the outbound Order Acknowledgement, Ship Notice & Invoice. Adjust If your partners don’t usually need all four.

This takes care of our Manual or Web Trading column and calculates our cost to process all the chosen customers’ orders end-to-end. For the On Premises column, we must consider our initial investments in software and systems, as well as ongoing operational and maintenance expenses such as staff and transmission fees. These may vary based on your ERP’s capabilities and version, and your customers’ requirements. Similarly, for cloud-based Managed Services, while there may be an initial investment to augment your ERP’s capabilities, the costs for translation mapping, transport and testing are included in the Managed Services Startup Investment while activity, monitoring, maintenance and management is included in the Managed Services monthly Activity.

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While ROI will vary, we can see that in addition to the perceived strategic benefits of Integrating Electronic Trading, we also can simply demonstrate and quantify an operational Return on Investment that is unique to your company.  Of course, adding additional partners – a very wise step to take after initial investments – results in a multiplier effect and adds even more to your bottom line.

Click below for access to the handy spreadsheet illustrated above.

Download ROI Spreadsheet

Tags: EDI ROI, supply chain, electronic data interchange, EDI, data integration, Web EDI, hosted EDI, Managed Services

TBT - The First Question is, "What is EDI Capable?"

Posted by Shandra Locken on Thu, May 04, 2017 @ 02:27 PM

34399736736_194bb0611c_z.jpgIt's Throwback Thursday (and May 4th, see pic) so to celebrate we are reprinting our most popular blog article.  Photo appears courtesy of Michel Curi.  

I get many calls each month from suppliers who have been told by their customer that they need to be EDI capable.  And their first question is, "What is EDI capable?"  Simply stated, being EDI capable is the capability to send and receive electronic business documents in a specific format based on established standards.  There are essentially two ways to accomplish EDI capability:  Outsource or buy your own software.

Companies who choose to outsource have about as many options as there are days of the year.  Between Web EDIhosted services, managed services, FAX-to-EDI, email-to EDI, and SaaS...the choices are almost limitless.  And the EDI providers who offer these services each add their own attractive features that make their solutions distinctive.  So depending on your priorities, the chances are good that you will find the perfect outsourced EDI solution.  

Buying EDI software offers many benefits if the volume of EDI warrants such an investment.  There are many things to consider when purchasing software and that's another blog article in and of itself.  But briefly, EDI software consists of a data transformation tool and an EDI communications vehicle.  Many EDI software packages have the capability of handling multiple data formats which is important in today's varied business environment.  You will also likely need VAN service and/or AS2 capability for communicating your data.  

So when the inevitable question, "What is EDI capable?" comes along, starting with this information will get you moving.  Just remember that being EDI compliant is not the end game.  It's an evolving business function and like everything else, must be periodically evaluated and updated. 

Click below to read our latest case study on we helped Quibids.com to move their EDI processing to the next level.

Download  Case Study

Tags: automation, AS2, EDI basics, data transformation, Web EDI, SaaS, EDI Implementation, EDI software

You Need the Luck o' the Irish with EDI

Posted by Shandra Locken on Mon, Mar 13, 2017 @ 08:30 AM

7175331883_80d3ebae45_z.jpgPhoto appears courtesy of JD Hancock.  I would have to say implementing and running a successful EDI system is 35% exceptional EDI software, 55% experienced EDI consultants and 10% good old fashioned luck.  So what can happen when you DON'T have the luck o' the Irish?  Bad things, very bad things.  Here's a list of some of those nightmares.  Watch out for those leprechauns - they can be very mischievous!

1. What if your EDI consultant has a heart attack?  Well, then you are scrambling to find someone to replace him.  One such situation occurred recently with David McAlister at McAna EDI.  He got a call from a potential client who was scrambling to replace their consultant who recently had a heart attack.  As luck would have it for David, (and being Irish, he has the luck o' the Irish), he was already familiar with the product they were using AND had previously worked with the consultant on other projects.  Don't worry, the consultant is currently recovering and apparently is going be okay.

2. This next catastrophe happened a few years ago with another client, this time an Aurora client.  This client used our web-solution (Athena) to print their UCC-128 bar codes and they were scrambling this one Friday afternoon to get labels done when out of nowhere, their printer stopped working.  Those pesky leprechauns!  They got their labels done after going out to buy a new printer AND having to work on Saturday.

3.  Another situation we have seen is when your EDI administrator abruptly leaves and you have no idea what is what.  You always said you would "get around" creating documentation for your EDI system but that day never came and now you desperately need help.  Talk about rotten luck.  When that happened to our client, we rolled up our sleeves and delved into their system to make sure the EDI documents were all sent and received with no errors.  They brought in another consulting company to assist with the ERP interface as that was not documented either and had been developed by the EDI admin.  If you are a follower of our Blogs, I refer you to the blog Kristen Kearns wrote back in May about Documenting Your EDI Processes.  Kristen includes a great list of essential items to include in your documentation.

4. One issue leprechauns often have a field day with is when software vendors don't keep up with the latest security protocols (or they charge you exorbitantly to do so).  How many of you read our blog about SHA -1 and SHA-2?  This scenario might ring some bells for many of you.  Kohl's has contacted you to let you know they expect you to be using SHA-2 digital certificates by April 1st.  Uh oh, your software doesn't support SHA-2.  Or they do, but the upgrade is costly and you already have your 2017 budget set.  However, if you have the luck o' the Irish, then you are already using Liaison's Delta/ECS EDI software and can easily support SHA-2 digital certificates.

5.  Perhaps the most common problems we see happen are due to human error.  Now, some may say that is not bad luck but I disagree.  Sometimes you just have a bad day.  I asked my colleagues for their stories of situations that happened due to bad luck and one of the replies I got back said, "Permissions, permissions, permissions, permissions, permissions, permissions."  If you don't set the correct permissions when you are doing specific tasks, like installations, upgrades, applying patches, etc. you WILL run into major problems and it WILL cost you hundreds of dollars in support.  Moral of the story - make sure you set the correct permissions for whatever task you are completing.  Don't give the leprechauns an opportunity to sabotage you!

Happy St. Patrick's Day from the Aurora EDI Alliance!

Click below to watch our video on how you can become an EDI hero within your organization:

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Tags: data integration, Web EDI, EDI software, EDI Consultant, EDI Documentation

Aurora Team Biography Series: Shandra Locken

Posted by Faith Lamprey on Fri, Dec 02, 2016 @ 01:36 PM

linkedin2.jpgUp next in the Aurora Team Biography Series is Aurora's Sales and Marketing Manager, Shandra Locken.  Shandra first arrived in the EDI world in the spring of 2008, not knowing how to spell EDI.  With the help of her colleagues, she was quoting VAN services and Liaison's Athena web-based EDI solution within a few weeks.  Had you asked her 20 years ago if she thought she would be selling EDI services someday, she would have said, "What is EDI?"  That is always the first question as you may have learned from our blog.  It's our most viewed blog article ever.

Shandra grew up in the central valley of California and moved to Southern California as a teenager.  After having a spent a few years attending college in Boston and working as a nanny, she returned to Southern California (back to warm weather) to finish school and earned her Bachelor's degree in child development from California State University, Fullerton.  While attending college in California, she worked in sales for an Anheuser-Busch distributor, where she formed lifelong friendships and gained valuable work experience.  Her intention was to continue her education and get her teaching credential and Master's in elementary education but as these stories go, life had other plans.  She met her future husband and wound up relocating with him to Reno, Nevada.

The next chapter of her life saw her managing school fundraisers for the American Heart Association.  Although it was a great cause and she loved working with children, having recently married and about to start a family, she ultimately decided that the required traveling was no longer feasible for her.  And it just so happened that a company called Aurora Technologies/EDI Support, Inc. in the suite upstairs was looking for a sales rep - that was almost 9 years ago.  Learning the EDI industry was at times very overwhelming and scary, but with the help of her manager and colleagues, she eventually settled in.

The following years saw another relocation, this time to Phoenix, Arizona, where she still telecommutes, the retirement of her manager, Aurora's former Director of Sales and a new title.  As the Sales and Marketing Manager, Shandra is primarily responsible for sales, managing our relationship with Liaison Technologies, as we are one of their biggest resellers, and maintaining our marketing content and automation including our website, blog, newsletters and social media.  All these years later, she notes that she cannot imagine doing anything else and feels fortunate to work with this incredible team of people.  

On a personal note, she is the mother of five year old twin girls and just celebrated nine years of marriage.  In her free time (which isn't much), she is active in her twin club, Paradise Valley Mothers of Multiples, sells jewelry on Etsy and writes emergency medical grant success stories for the Ian Somerhalder Foundation (ISF) website.  ISF's mission is to "...empower, educate and collaborate with people and projects to positively impact the planet and its creatures."  A cause near and dear to her heart, since the grant program was launched in February of 2014, ISF has given grants to 581 agencies and has helped 1,236 animals in need of emergency medical care.  When asked how she wants to be remembered, she says, "A good mother, a good wife, a good person.  And somone who stood up for what was right and advocated for others when necessary."

Click below to read our eBook EDI 101.

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Tags: EDI provider, Web EDI, VAN Services

The First Question is, "What is EDI Capable?"

Posted by Shandra Locken on Thu, Dec 31, 2015 @ 06:43 PM

What is EDI CapableTo end 2015, we thought it would be fun to reprint our most popular blog of the year.  And actually, it's our most popular over all time.  Enjoy and Happy New Year from the Aurora EDI Alliance!

I get many calls each month from suppliers who have been told by their customer that they need to be EDI capable.  And their first question is, "What is EDI capable?"  Simply stated, being EDI capable is the capability to send and receive electronic business documents in a specific format based on established standards.  There are essentially two ways to accomplish EDI capability:  Outsource or buy your own software.

Companies who choose to outsource have about as many options as there are days of the year.  Between Web EDI,hosted services, managed services, FAX-to-EDI, email-to EDI, and SaaS...the choices are almost limitless.  And the EDI providers who offer these services each add their own attractive features that make their solutions distinctive.  So depending on your priorities, the chances are good that you will find the perfect outsourced EDI solution.  

Buying EDI software offers many benefits if the volume of EDI warrants such an investment.  There are many things to consider when purchasing software and that's another blog article in and of itself.  But briefly, EDI software consists of a data transformation tool and an EDI communications vehicle.  Many EDI software packages have the capability of handling multiple data formats which is important in today's varied business environment.  You will also likely need VAN service and/or AS2 capability for communicating your data.  

So when the inevitable question, "What is EDI capable?" comes along, starting with this information will get you moving.  Just remember that being EDI compliant is not the end game.  It's an evolving business function and like everything else, must be periodically evaluated and updated. 

Click below to read our latest case study on we helped Quibids.com to move their EDI processing to the next level:

Download  Case Study

 

Tags: EDI software, EDI basics, EDI provider, EDI options, Web EDI

Liaison Unveils Community Manager

Posted by Shandra Locken on Fri, Feb 21, 2014 @ 11:04 AM

supplier enablementPhoto appears courtesy of Sarah Ackerman. Supplier enablement just got a heck of a lot more fun with the unveiling of Liaison Technologies’ Community Manager.  As a hub organization, can you imagine being able to see what's happening with your trading partner community at a glance? Liaison Technologies, always on the cutting edge of integration and supply chain solutions, has created a tool for hubs to manage their community from one convenient place.  Community Manager uses a Software as a Service (SaaS) approach to allow hubs to monitor and manage their customer/supplier enablement programs.

For the spokes, Liaison's Athena solution is provided as a perfect solution for the smallest companies which would not otherwise pursue an EDI connection to the hub.  Athena can be accessed from any device with an internet browser, including mobile devices.  Modeled after a basic email interface, Athena makes the viewing, creation and exchange of EDI documents virtually effortless.  Athena's reply-to feature and simple web-forms makes EDI as easy as answering an email.  In addition, carton labels (GS1-128/UCC-128), email alerts, and Athena's reporting capabilities allow users to quickly summarize a variety of EDI activities, such as all sent or received or rejected documents within a specified time period.

For the hubs, Community Manager makes the process of outreach, onboarding, data validation, and monitoring much more fluid. Supplier enablement managers can monitor if a spoke is receiving and viewing received transactions without a phone call or e-mail. This changes the dialogue from, “Did you get my purchase order?” to "Hey Bessie Clothing Supplier, I see you have not reviewed PO #1234."  One of the most useful features is that you have the authority to move your suppliers from test to production status right within Community Manager.  You decide which documents to enable, what the message flow is and you have the ability to add or remove and edit trading partners.  This powerful tool is currently being used by a company with 28,000 suppliers.  Can you even imagine the control and visibility this company has into its supplier community?

I haven't even gotten to the best part.  With a commitment to add a minimum number of suppliers within the first year, this tool comes at no additional cost to the hub!  Yes, you read that correctly.  The maps will need to be written of course, but this is a minimal investment for the impact of having this kind of visibility into your global trading partner community.  Oh did I neglect to mention that Athena is available in 12 different languages?  Forget huge testing fees, forget long contracts...easing your suppliers into a well-built, low-cost solution that you have some control over is invaluable.  Convincing your suppliers to be EDI capable is tough and accomplishing that without damaging the relationship is a delicate process.  As a pair working for you, Community Manager and Athena can help you accomplish that goal.  If you would like to see a demo of either Athena or Community Manager, please do not hesitate to contact us. 

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Tags: supply chain, EDI compliant, EDI onboarding, SaaS, supplier enablement, Web EDI

Cloud or On-Premise EDI Integration? A Unique Approach to Selection

Posted by Shandra Locken on Thu, Jul 18, 2013 @ 05:50 PM

Guest blogging for the Aurora EDI Alliance today is Nathan Camp of Liaison Technologies.  Photo courtesy of Mikhail Koninin.

maninrainOrganizations of every size are evaluating every piece of technology to determine whether they retain or expand solutions with on-premise software and hardware, or move the functionality up to the “Cloud.”

A major tile and masonry products supplier based in Los Angeles, CA, with dozens of stores across the US, had such a decision as they looked at their EDI operations.

This company was using Oracle JD Edwards for their ERP system, and they had decided to keep this system in house running on Oracle servers. While they had an enterprise-class ERP system, their revenues and therefore budgets were also still directly tied to a very tight home improvement market. Cost, delivery capability, control, and growth were constant considerations as they looked at IT resources. In order to stay in business, this company knew they had to expand their markets in big home improvement chains. And that made one choice an absolute must: find a new EDI integration system. Since JD Edwards typically uses staging tables for data integration, both on-premise and Cloud delivery models were options.

Many IT directors are faced with that conundrum today: “To Cloud or not to Cloud, that is only one of my 1,400 decision e-mails sitting in my inbox.”

While Cloud and mobile continue to be the darlings of media, the software industry is providing signals that on-premise is not dead nor quietly drifting off into obsolescence. In a recent post by Pete Barlas of Investors Business Daily, he cites Gartner’s research that says, “By 2016, global revenue from public cloud software services is expected to reach $210 billion, up 60% from the $131 billion expected this year, says Gartner. The research firm expects total software revenue of $369 billion in 2016, so public cloud software would be nearly 57% of the total vs. 43% this year.” And Barlas correctly summarizes, “That, of course, still leaves a lot outside the cloud.”

Turning back to the tile distributor in Los Angeles, they had the following critical factors as their main consideration factors:

  1. They absolutely needed to satisfy the EDI needs for Home Depot, Lowes, and other home improvement giants.
  2. They needed a flexible solution that could work with JD Edwards via database connectivity.
  3. They demanded that their new EDI solution must perform complicated pricing and unit measure look-ups and conversions to transform internal costs and product units into the appropriate values required by each retailer.
  4. Large product catalogs also needed to be compiled from the JD Edwards database on a regular basis, and posted on a secure FTP server for immediate customer pickup by customers using the Retail Flooring Trade Association RFMS system.

With this list of requirements, the tile distributor began the search for solution providers. They knew that they needed to evaluate solutions covering a broad spectrum of delivery methods. In the end, they whittled the list down to a Cloud integration service provider and an on-premise solution. And here is where this company did something that most others haven’t considered. They decided to have a live competition between the two solution options. The Home Depot integration project was given to one solution provider, while Lowes was given to the other solution provider.

This unique solution to choosing a new vendor provided the tile distributor with four practical take-a ways:

  1. Could the solution provider easily connect to the JD Edwards staging tables without disrupting too many internal systems nor compromising security?
  2. Could the solution provider actually deliver what the sales person had promised?
  3. Were budgetary objectives met?
  4. Was the system adaptable to be managed by either internal or external resources on an as-needed basis?

While the results might surprise you (on-premise software won the day), what should impress you is the creative approach to the solution process. This tile distributor recognized the absolute strategic importance of this decision, and they systematically determined the best course for their business. This required duplication of work efforts across two competing solution providers, cash outlay for the professional services provided in the proofs of concept, and the critical analysis that this exercise needed to quantify the cost-to-benefits of both products.

While this customer ended up evaluating on-premise systems compared to Cloud delivery, I argue that the same approach can be taken in on premise versus on-premise or Cloud versus Cloud. This approach does not have to be taken for every decision because many IT purchasing decisions can be more obvious.

But when faced with a more difficult capital investment decision which could lead to substantial hidden costs, a little upfront sacrifice is worth it. Without the exercise of the proof-of-concept trail, the supplier would not have uncovered the new costs of working with this particular Cloud provider that demanded the client adhere to its canonical file structure, which then made it necessary to add a second data translation map between the “converted” EDI file and JD Edwards. Yes, this is a common, hidden pain point that is highlighted as point 1 in this blog article.

On the positive side, because this tile distributor was able to find success and a strong working relationship with the Aurora EDI Alliance, both this company and the solution experts continue to look for new opportunities to expand the ways to use the middleware solutions beyond just client EDI. In fact, the tile distributor is now looking to work with the solution provider to run a supplier enablement program and offer a multi-lingual Web EDI product to tie their international based suppliers directly into their EDI system.

Click below for a case study on how the Alliance helped another company, AliMed, make their EDI operations more efficient using the Delta/ECS tools.

 Click Now for AliMed Case Study



Tags: EDI integration, data integration, cloud, enterprise resource planning, cloud computing, electronic data interchange, supplier enablement, JD Edwards, Web EDI