How much does EDI cost to implement?
Electronic data interchange (EDI) is a computer-to-computer interface that allows a business to receive important documents — purchase orders, invoices, shipping notices, bills of lading — and have these document populate directly in the business’s internal systems for processing. This eliminates the need to handle the document physically, bypassing the time it takes to receive the document via mail, fax, or even email. It also reduces errors and speeds up delivery, as the details of the document don’t need to be entered by a human. The documents are received and routed automatically by the EDI network to the correct internal system.
As expected, increasing in-house efficiency, reducing errors, and faster delivery all translate into major cost savings for a business. But how much can be saved depends on how much an EDI will cost to be implemented for your business.
EDI Cost Considerations to Implement
Pricing for EDI implementation can vary due to several factors. The first depends on how the company would like to introduce EDI. There are two routes to consider when approaching how to implement EDI for your business: in-house, or with a third-party provider.
In-House
Choosing to implement EDI in-house provides greater control over the process, but it comes with a large infrastructure and equipment overhaul that will require substantial costs. Companies will need EDI software, servers to host the network, space to hold the equipment, communication and mapping software, dedicated IT staff, and EDI specialists. This is just to get the EDI solution set-up on your side, as well. The system will require regular maintenance and upgrades — both to software and hardware — to stay up and running. And you will need to ensure that your EDI network can interface with your business partners, who will likely require an amount of onboarding at minimum, if not dedicated help to get the system up and running on their end. All in all, this route tends to be quite expensive.
Third-Party Provider
Teaming with a dedicated third-party provider to host and implement EDI for your business relieves the stress of setting-up and maintaining the EDI network assets. The off-set here is that third-party providers will charge based on how much your business uses the EDI network. This is generally calculated based on the number of kilo-characters (KCs) within your documents, or on the number of documents being sent via the network. This changes per provider, so be sure to verify with each provider which method they use.
Third-party providers will offer subscription models, with individual tiers within those models broken out into levels of KCs or documents sent over the network. The typical subscription model–levels are:
- Pay-As-You-Go
- Monthly
- Annual
You should evaluate the best option for your business based upon your individual needs. Consider the actual volume of documents that will be sent in a given time period, and remember that you can often adjust the level of service over time. But, it’s also important to be mindful of the type of provider chosen. Some less savory EDI service providers will operate as a “free” EDI solution for businesses, but charge exorbitant fees hidden in their fine print. It’s best to thoroughly research the provider to ensure they are legitimate and a strong partner for your business.
Choose Your Partner for the Best EDI Cost Savings for Implementation
DigitBridge acts as a dedicated service partner to help your business become more efficient and take advantage of the cost savings’ benefits provided by implementing EDI. Replacing the physical model of receiving important business documents, entering them by hand, and dealing with delays based on erroneous entries or errors, DigitBridge is committed to helping your business thrive in the new e-commerce reality by adopting simple digital solutions that work. Automated updates and document entry will save time, reduce errors, and allow business to focus their time, attention, and resources where they’re needed most — toward continued success.
Rather than trying to tackle this venture alone, team up with a partner that simplifies the process and provides superior access to your documents and data, in one secure solution, keeping the focus trained on your business’s success. Team up with DigitBridge today, and build out your capabilities with an EDI solution to support your business.
