How to Integrate EDI With Your Backend Systems
In this article, see if you should do manual data entry, do a multi-tool EDI integration, or use an end-to-end EDI solution.
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EDI powers the supply chain, providing trading partners a central, standardized method to securely exchange core business documents, such as purchase orders, invoices, advanced shipment notifications and others. Implementing EDI partner exchanges is a key step to automating your business process flows, but to realize the full value of EDI, you’ll need to integrate your backend ERP, logistics, accounting and other systems with your EDI processes.
You may want to store purchase orders in your ERP, add invoices to your accounting system, subtract order information from your inventory system, or notify your sales representatives about new orders through your CRM.
But is there an easy way to integrate EDI solutions with the requisite backend systems, which might be located on-premise or in the cloud?
You have three primary options:
Manually entering the data
Performing a full EDI integration using multiple tools
Employing an end-to-end EDI integration solution
In this article, we will cover each option, detail their pros and cons, and provide guidance on which option to use in various circumstances.
1. Manual Data Entry
When organizations first start using EDI to communicate with trading partners, they often turn to a managed EDI service, called a Value-Added Network (VAN), to perform the necessary data mapping and file transfer.
Some VANs provide a Web EDI service that allows you to exchange order information with your partners via forms on a web portal. But these forms don't integrate with backend systems; if you go this route, you'll manually enter the data into these web forms by hand.
Manual data entry is a cheap and easy way to start tracking your EDI transactions when you have a limited number of partners and a low volume of EDI transactions.
But it's also an error prone process, and because you'll need to hire additional people to perform this task as trading volumes grow, manual data entry quickly becomes expensive.
2. Multi-Tool EDI Integration
A fully integrated EDI integration process eliminates the errors and costs that come with manual data entry.
Traditional EDI solutions require customers to use separate tools to map & translate EDI data, then transfer files to their partners. Once documents are transferred among partners, there is a need to perform an additional, intermediary step to integrate the data into backend systems.
This is performed by transforming the EDI document into an intermediary format, such as CSV, and then importing it into a backend application, such as an ERP.
This process typically requires a variety of tools, including:
A managed file transfer (MFT) solution to securely send and receive EDI documents
EDI document translation tools that turn EDI documents into business formats
Central data stores or a data warehouse for storage and integration
And backend integration tools to pull the translated data into your backend systems
One option is to take the incoming document, store it in a central database, or data warehouse, and then use an extract, translate, load (ETL) process to import the data into backend systems from the data store. The advantage of this approach comes in the value of data warehousing and backup.
These methods can be used with direct EDI tools or VANs and are typically performed in a batch process.
Challenges of This Approach
Troubleshooting — Multi-step EDI backend integrations that use a range of solutions to handle various parts of the process can cause troubleshooting headaches. When problems arise, the culprit could be anything from a translator not including a field to a batch process that fails to perform a particular validation. Having multiple tools clouds visibility, making it difficult to find and fix errors.
Validation: Backend Integration — EDI data requires numerous validations before it can be imported. For example, if your organization wants to insert a PO into NetSuite, you'll have to first ensure that the customer exists in NetSuite and that the customer has the requisite ID. Each line item in the PO also needs a specific ID, and so on. All of these validations can cause failures or errors.
Cross-Team Coordination — The big challenge here is that many larger organizations have separate teams to manage EDI and their backend systems. Your organization will need to ensure your EDI and backend system teams communicate closely to identify any issues. The integrations team will need to understand enough about EDI to perform the necessary validations. And the EDI team must ensure EDI messages contain the necessary data. Both teams need to monitor the integration process.
Managing Upgrades and Security Risks — Managing upgrades to all these integrated systems can be a mess. The more systems in place, the more maintenance and upgrades are required. In addition, your team must track security risks as systems age. In particular, many EDI systems are legacy solutions that haven't been updated for years, causing security risks, not only in the EDI systems themselves, but also to backend systems and common business applications. That's just one reason why EDI modernization is so important.
Despite the complexities inherent in multi-step EDI integrations involving separate tools, many organizations that have already implemented an EDI process like this may want to largely stick with it because it can be difficult and time-consuming to re-do all the mappings to unify the entire process.
In this case, the best approach may be to slowly introduce modern solutions to handle discrete parts of the process, such as leveraging a modern EDI platform to onboard new partners and document transactions or secure the most sensitive file transfers via MFT protocols like AS2. Then, as you complete proof of concept (POC) projects, you can reuse the automated workflows you’ve created as templates and slowly, begin to replace costly legacy tools.
3. End-to-End EDI Solution
You can solve many of the challenges inherent in traditional EDI-backend integration with an end-to-end EDI integration solution.
Such an end-to-end tool allows you to exchange documents with trading partners, easily translate them into any file format, and import data from those documents into date stores and backend systems — all within one solution.
As with the full EDI integration process, you will still need to perform the same validation steps as data is entered into the backend system and the teams that manage EDI and the backend systems will have to collaborate in the initial setup process to get things working correctly. But the right solution can help you automate the validation process.
Because these solutions perform all necessary integration tasks, they improve visibility. Both the EDI teams and those responsible for the backend systems can see what's going on across the entire system, in one dashboard.
Unified EDI solutions are also often more flexible than multi-solution integrations because they provide a common translation layer, rather than requiring to customize the translation for every specific backend system. In other words, when you want to integrate EDI with a new system or application, you won't have to redo the entire translation step.
As a result, end-to-end EDI solutions are more scalable and easier to maintain.
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