How to build a business case for electronic data interchange (EDI)

Transcription

1 How to build a business case for electronic data interchange (EDI) 1 1

2 3 What is EDI? 4 How do I calculate cost savings? 5 What should I do next? 6 About MessageXchange 2

3 What is EDI? Electronic data interchange, or EDI, is a way of electronically exchanging structured data. The technology first came about in the 60s and is widely used today in a number of industries because of its significant benefits; efficiencies, reduced errors and disputes, and cost savings. At MessageXchange, we most commonly see EDI used for the exchange of purchase orders, shipping information and invoices. However, it can realistically be used to transfer any information that a software package holds. Some of our clients choose to send product data to their buyers. Others send production forecasts to their suppliers so they can make sure they have stock on hand when they need it most. EDI works by one party inputting data as usual into an IT system. The information is sent via a gateway and translated, or mapped, into the correct format and input into the recipient s system. Efficiencies Electronic data interchange removes the need for staff to manually input data into your IT systems. Gone are the days where you receive orders and invoices by fax, mail or . With EDI, you can receive documents straight into your IT system. Reduced errors and disputes Using EDI, documents only need to be entered once, not several times by a number of people. The automatic nature of EDI significantly reduces the incidence of data entry errors and disputes. Cost savings EDI automates processes and removes the need for several people to handle one document, so their time can be spent on more important things. On top of that, EDI has been proven to reduce the order to cash cycle. 3

4 How do I calculate cost savings? What you save using EDI Orders received Hourly rate Orders Time it takes to enter orders % of orders expected via EDI Each business is different and therefore their cost savings will vary between companies. Our MessageXchange Account Managers are always happy to work with you to calculate accurate figures for your business. As a first step, we have provided a basic calculation you can perform (to the right) to see what sort of cost savings you could expect. Some variables to consider are: Whether you are a supplier or buyer The range of documents you choose to implement The number of trading partners you have. On top of the savings on orders, deliveries and invoices, your business can also take into account: Savings in paper and other stationery Improvement in cash flow in the order to cash cycle Savings made if EDI is implemented with downstream suppliers. $1.3 billion The savings per year seen by the UK grocery sector as a result of EDI. (GS1 UK and Cranfield School of Management) Deliveries Shipments per year % of shipments disputed/returned Time it takes to resolve Hourly rate Invoices Invoices sent Time it takes to enter and send invoices Hourly rate % of orders expected via EDI Invoices sent % of invoices disputed Time it takes to resolve Hourly rate ROI on EDI Year one Savings in year one establishment costs running costs in year one Subsequent years Savings for the year running costs for the year * These calculations are to be used as a guide only 4

5 What should I do next? Now that you have a rough idea of the savings EDI can bring to your business, our Account Managers can help you calculate accurate figures based on your business, its processes, types of trading partners and other variables. Our team can then discuss all options with you, whether it be integration (EDI), a webform solution or something else. There is absolutely no obligation to go with a MessageXchange solution; we re happy just to have a chat and explore what it could mean for your business. At MessageXchange, we have a whole range of customers from small mum-andpop suppliers through to multinational organisations. We ve helped companies find and implement solutions, onboard their communities and see completely automated processes and huge cost savings. 5

6 About MessageXchange MessageXchange is a Melbourne-based company with offices in Hong Kong and Shanghai. Owned by Michael Ross and John Delaney, MessageXchange has over 15 years of experience and processes over 100 million messages every year. Our B2B gateway cloud service is configurable so it can be flexibly applied to your requirements with minimum effort. Our integration team are specialists in message routing and mapping and are always on hand to assist you in setting up or troubleshooting your B2B gateway. MessageXchange was developed by our team specifically for cloud B2B integration and they ensure the service is up-todate with the latest industry standards, functionality and security so you always have the best service at your disposal. Highly secure and reliable, we guarantee the viability, continuity and efficiency of your business. We operate some of the most sophisticated and proven technology in the world. Our long-term clients include some of the largest organisations in retail, manufacturing, telecommunications, postal services, logistics and more. We continually prove to be the industry leader of B2B integration. 6

7 Contact us today to find out how we can tailor a solution to suit your business sales@messagexchange.com 7