Is EDI 2.0 on the Horizon?

How long is it since you came across the acronym EDI? In its heyday, it seemed the entire World was infatuated with Electronic Data Interchange (EDI), although that was over 15 years ago. Since then, many formats have come to fruition, including Ansi X12, Edifact, Tradacoms, Odette and more recently, iterations based on XML.

Unfortunately, EDI became associated in the 1980’s with cumbersome software and complicated standards, which is why these days it’s a much maligned and often overlooked technology, even though, the concept of sending electronic messages and business documents between trading partners can drive tremendous savings and efficiency improvements across supply chains.

Therefore, should the process and investment to get trading partners computer systems talking to one another be simple and cost effective, then it’s safe to assume we could be about to witness another comeback King.

Unbeknown to many industry pundits, there have been a number of low key software companies and specialists working on simplifying computer-to-computer message translation (i.e. the process of sending a purchase order (PO) straight from a customer’s computer system to a supplier’s computer system in seconds). If you’re a business that employs vendor managed inventory, real time replenishment, JIT manufacturing, collaborative planning and forecasting or simply yearns for a near-paperless working practice, then you’ll be salivating at the prospect of EDI 2.0 (pardon the pun).

EDI 2.0, deployed as a fully managed service (i.e. the edi software supplier hosts, manages, configures and supports the software for you and your trading partners), doesn’t require a team of internal IT people or hefty investment. Furthermore, electronic trading relationships with customers, suppliers or partners can be setup within hours and the business benefits reaped within days.

For minimal capital outlay, companies can reduce their average days of debt, streamline the accounts department, improve cash flow and decrease operating expenditure. How often does this type of opportunity present itself I ask myself?

History is littered with examples of “reinventing the wheel”, fundamentally because we realized the previous version had intrinsic value and applying more modern thinking and advancements in technology could make a step change in our economy or life. Certainly, EDI is one such example and a small secretive group of supply chain software vendors could be on the verge changing the way we conduct business forever.