Modernizing EDI: How to Cut Migration and

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1 Modernizing EDI: How to Cut Migration and Onboarding Costs by Over 50% An EXTOL International White Paper This white paper extends the EXTOL s Electronic Data Interchange (EDI) Modernization white paper series. In this paper, we examine methods for reducing the cost of switching to and using a modern EDI solution.

2 Background: Classic versus Modern EDI In part 1 of this white paper series, we introduced the distinction between Classic EDI and Modern EDI. Classic EDI is characterized by the batched interchange of standard electronic documents and flat files between trading partners, frequently over a Value-Added Network (VAN). Modern EDI extends the Classic EDI model with any-to-any connectivity, end-to-end integration, near real-time response, support for multiple, non-standard document syntaxes, on-demand visibility, and other value-adding capabilities. The emergence of Modern EDI reflects changes in the way companies are connecting, integrating business processes, and exchanging data. It adds value by expanding integration capabilities while reducing the costs of operation and partner onboarding. Classic EDI remains essential, but it s no longer good enough, by itself. As a result, more and more businesses are migrating to Modern EDI solutions. Migration is the First Step to Modernization The process of replacing a Classic EDI system with a Modern one is known as EDI modernization. Part 2 of this white paper series provides background on this process, and examines best practices for EDI modernization planning and migration. In the context of EDI modernization, migration refers to the set of activities needed to reconstitute EDI assets and operations in a new environment. This includes migration of trading partner connections and supporting implementation objects, such as business processes, events, schedules, maps, notifications, and adapters that connect applications, data, and communication services. With rare exception, migration entails recreation of EDI implementation objects in the new environment, not direct conversion. The main reasons for this are: Proprietary or unavailable assets: Business processes, maps, adapters, and other EDI source system assets may be unavailable, undocumented, and / or protected intellectual property. Any of these factors can make direct conversion of implementation assets infeasible. Best practices: Many EDI implementation best practices are contingent on the architecture and features of the EDI host platform. Incorporating best practices in a new EDI system may entail exploitation of platform characteristics and produce EDI implementation objects that are platform-dependent. Process refactoring: Over time, process inefficiencies and exceptions tend to accumulate in every EDI system, as partner onboarding and maintenance activities occur. Recreating EDI implementation objects provides an opportunity to refactor business processes for improved consistency and maintainability. Onboarding templates: The key to minimizing EDI migration costs is creating reusable templates for projects, business processes, maps, and other EDI implementation objects. Using templates not only speeds migration, it also cuts the time and cost of onboarding new trading partners. Modernizing EDI: How to Cut Migration and Onboarding Costs by Over 50% 2

3 Migration Has a Cost And a Return Most businesses view the process of migrating EDI assets to a new solution as a cost without offsetting returns. Some even view it as a significant obstacle to modernization. But the cost of migration need not be prohibitive. The key to minimizing EDI migration time and cost is to reuse EDI objects in the form of templates across trading partners. Reuse offers an effective lever for EDI migration, because standard EDI transactions Orders, Invoices, Shipment Notices, etc. conform to predictable patterns: Table 1: Reuse potential for different kinds of EDI implementation objects. When migrating trading partners that use common EDI transaction sets, the core reuse investment creating reusable templates is identical, whether you re migrating 10 partners or 10,000. And once migration is done, those same templates continue to reduce costs by cutting the time needed for new partner onboarding: Figure 1: Combining templates with automation aimed at the right reuse level can substantially reduce EDI migration and partner onboarding costs. Modernizing EDI: How to Cut Migration and Onboarding Costs by Over 50% 3

4 Broad experience with reuse across many industries and application cases has established that reuse can substantially reduce migration and onboarding costs. What may be less clear is that the cost-saving benefits of reuse can be low or high, depending on where and how reuse is applied. Cost Reduction Factors Reusable templates are just one key to reducing migration and onboarding costs. Figure 1 shows two others reuse level and automation. These three factors influence migration and onboarding costs in different ways: Templates lower costs by reducing the number of EDI implementation objects that need to be created when migrating or onboarding each trading partner. For example, creating business process for 50 trading partners from a single template is substantially cheaper than creating each process from scratch. The degree of cost reduction that is attainable using templates varies according to the reuse level targeted by the templates. Project templates reduce costs more than map templates, for example, because they incorporate reusable business processes, adapters, and other objects, in addition to maps. Automation lowers costs by reducing the manual steps needed to create and customize EDI implementation objects. For example, automation can eliminate the need to manually set partner-specific naming, routing, and acknowledgment properties when deploying projects based on a project template. Comparing Reuse Strategies Table 2 compares four reuse strategies, based on the task requirements each imposes on migration and onboarding. The reuse strategies are ordered left to right, from lowest to highest cost savings: 0. Baseline (no reuse): The baseline case shows the tasks required to create integration objects from scratch, for every trading partner. This case occurs only when integration requirements are unique for each trading partner. 1. Manual reuse without pre-built base maps: This case, typical of integration with a home-grown application system, entails creation of base map templates followed by use of the templates to migrate or onboard trading partners. 2. Manual reuse with pre-built base maps: EDI vendors may offer base map libraries or templates to reduce mapping effort when integrating trading partners with a commercial ERP or other enterprise application system. If base maps are available for the application system and transactions you need to support, they may obviate the need to create map templates as part of your migration project. Modernizing EDI: How to Cut Migration and Onboarding Costs by Over 50% 4

5 3. Manual reuse with pre-built project templates: Additional cost savings are possible by applying reuse at the project level. Project templates that add reusable business processes, adapters, notifications, and other implementation objects on top of base maps further reduce migration and onboarding effort. Just as with map templates, you can create project templates as part of your migration project, or source them (if available) from your EDI vendor. 4. Automated reuse with pre-built project templates: This reuse strategy combines pre-built project templates with intelligent automation methods that generate and customize partnerspecific projects. Table 2: Comparing template creation and deployment task requirements for four reuse strategies. Modernizing EDI: How to Cut Migration and Onboarding Costs by Over 50% 5

6 Time Savings Comparison Figure 2 compares the cost savings produced by the reuse strategies described above for a 3-transaction, 100-partner migration effort: All reuse strategies cut migration time by at least 75%, compared to the no reuse baseline. Starting with off-the-shelf base map templates saves just.9% of migration time. Employing reuse at the project level saves 4 times as much as at the map level, but still produces only 3.5% savings over basic reuse. Automated reuse at the project level improves on the time savings of the best manual migration strategy by a factor of more than 15 (58.7% versus 3.5%). Figure 2: Comparing cost savings for four reuse strategies. This comparison excludes costs for installing and configuring EDI middleware and tools, project documentation, and project management. Modernizing EDI: How to Cut Migration and Onboarding Costs by Over 50% 6

7 To some, these results may seem surprising, even counterintuitive. For years, base map templates have been viewed as the gold standard for rapid migration and onboarding. Yet, in a 100-partner migration project, they save just.9% more time than building map templates from scratch. It s important to recognize that using map templates accounts for much of the 77% savings that basic reuse offers. But the effort needed to create them in the first place accounts for a small fraction of overall project time. And that fraction approaches zero as the number of partners you need to migrate grows. For that reason, the cost savings ratios in Figure 2 vary little in projects with more transactions per trading partner. Conversely, the effort required to apply reuse, whether at the map or project level, accounts for a relatively large proportion of overall project time. Some of that effort customizing maps to meet the needs of each trading partner, for example cannot be fully automated. But it turns out that many reuse tasks creating new projects from templates, renaming partner-specific objects, configuring acknowledgments, setting partner-dependent parameters, configuring routing, etc. are time-consuming and well suited to automation. Not only does automation cut the cost of these tasks, it also eliminates many kinds of manual errors that can extend testing time or contribute to runtime exceptions. Automating Project-level Reuse Figure 3 shows how automated, project-level reuse works. The process is identical for trading partner migration and onboarding. The main steps in the process are: 1. Acquire or create a project template for each trading partner transaction profile (e.g., a template for EDI Orders + Order Changes + Ship Notices + Invoices + acknowledgments). Project templates organize business processes, maps, adapters, and other objects for each EDI transaction in a given profile. For new partner onboarding, you can reuse project templates created for your migration process. For migration, your EDI vendor may offer off-the-shelf project templates that can eliminate all or part of this step. 2. Supply sample EDI data or a trading partner profile table that contains partner names, EDI identifiers, and optional EDI attributes. These inputs guide generation and automated configuration of partner-specific project objects in the next step. For some migration projects, trading partner profile data can be extracted automatically from the classic EDI source system. 3. Generate and configure projects for each trading partner using the Project Generator utility. Based on the project template you supply, the Project Generator creates and configures EDI projects for each trading partner identified in the sample EDI data or trading partner profile table. Modernizing EDI: How to Cut Migration and Onboarding Costs by Over 50% 7

8 4. Customize, test, and deploy your new EDI projects, according to the requirements for each trading partner. Figure 3: The Project Generator, included with EXTOL Business Integrator (EBI) Studio, cuts migration and onboarding costs by deploying and customizing projects from templates. The Project Generator automates a large majority of reuse tasks, including: Creating new projects and project objects based on any provided template Renaming partner-specific objects Setting partner-dependent parameters on Business Processes and Adapters Configuring EDI Acknowledgments Configuring inbound and outbound EDI Routes Archiving generated projects Project templates may encompass single transactions or complete transaction sets for Order-to-Cash, Procure-to-Pay, Load Tender-to-Delivery and other business cases. You can also generate projects for non-standard B2B integration, cloud integration, data integration, and proprietary business processes, including cases that require integration with homegrown applications. Modernizing EDI: How to Cut Migration and Onboarding Costs by Over 50% 8

9 Whether you use it to create one or many projects at a time, the project generation approach saves staff time, cuts migration and onboarding costs, eliminates many kinds of manual errors, enforces consistency, propagates standards and best practices, reduces time to value, and greatly reduces the risk of missing important business deadlines. Conclusion Historically, concerns about switching costs have impeded EDI modernization. The cost of migrating trading partners from legacy EDI systems has been a particular concern for many businesses. But recent advances in automation and reuse have lowered barriers to modernization, by reducing the time, effort, risk, and overall cost of migration by more than half. Because standard EDI integrations conform to predictable patterns, reuse is especially effective at reducing EDI migration costs. But not all reuse strategies are equally effective. Only automated reuse at the project level yields a significant reduction in migration time and cost, especially with large numbers of trading partners. An important side benefit of automated reuse is that savings continue to accrue after migration, as new trading partners are onboarded. The same templates, automated tools, and processes used for migration also cut the costs and time required to onboard new partners. For that reason, one of the best times to migrate to a modern EDI solution is when planning to onboard new trading partners. Automation is also the key to reducing migration costs for non-standard partner connections. Many businesses exchange proprietary XML documents, flat files, and spreadsheets instead of standard EDI documents, to accommodate unique trading partner integration requirements. Design-time automation methods are particularly effective at reducing migration time and costs for such non-standard cases. Modernizing EDI: How to Cut Migration and Onboarding Costs by Over 50% 9

10 Modernizing EDI: How to Cut Migration and Onboarding Costs by Over 50% About the Author Jim O Leary, Vice President of Product Strategy at EXTOL International, is an expert on strategic business and IT project planning. Jim has over 20 years of senior and executive management experience with software companies, and holds a deep understanding of current technological drivers across multiple industries. Related Content: Modernizing EDI: Drivers, Options, and Success Factors Modernizing EDI: Best Practices for Project Planning and Migration About EXTOL International EXTOL International has been a provider of integration software and service solutions for more than 25 years. It s flagship product, the EXTOL Business Integrator (EBI), is a unified middleware platform and toolset for integrating trading partners, onpremise applications, cloud services, and enterprise data, in any combination. EBI is available as a software solution for selfmanaged data transformation and exchange, and as an Managed Service offering for companies that prefer to outsource. EBI automates customer and supplier interactions for manufacturing, retail, transportation, logistics, insurance, and many other industries. It comes complete with all of the capabilities you need for business-to-business (B2B) integration, including powerful process automation and data transformation; adapters for integrating partners, applications, and data resources; and a comprehensive, web-based dashboard for monitoring and analyzing integration activities. EBI supports both classic and modern EDI requirements, including traditional batch and non-traditional real-time interactions. It includes X12 and EDIFACT EDI document standards, and supports integration of XML, flat file, and spreadsheet documents. The integrations you create with EBI are portable across IBM i, Windows, and Linux environments, as is the EBI product itself. EBI integrates flexibly with business applications and data. It offers pre-built adapters for enterprise software products from Oracle, SAP, TMW Systems, and others, and supports both SOAP and REST services for integration with SaaS and other service-oriented applications. EBI can also integrate with internally-developed applications, using file system, database, web service, and other open interfaces. The EBI Studio is a design-time tool environment for creating and maintaining custom integrations that run on EBI. EBI Studio includes advanced metadata-driven modeling and object generation tools that cut the time needed to create integrations and replace legacy integration assets. EBI Studio also supports a very high level of object reuse, so you can bring new trading partners onboard faster, and with fewer errors. Learn more about EBI at: