Electronic data interchange (EDI) is one of the most critical technologies in today’s global marketplace. Businesses worldwide use EDI to facilitate the B2B transaction process and exchange documents with international partners. EDI solutions have been proven to impulse business growth across all industries and have become the backbone of global business operations.
The success of EDI has been felt on a worldwide scale. By facilitating frictionless commerce between international trading partners, EDI has led the way to streamline global trade while also eliminating manual paper processes. Thanks to the automation capabilities of EDI, its adopters enjoy improved supply chain efficiency.
Does EDI have a future?
EDI is currently evolving alongside the business processes it facilitates. Novel Internet B2B technologies such as XML-based document standards and API-based B2B transactions have worked towards complementing EDI instead of replacing it.
What makes EDI unique?
EDI is faster and more efficient than other communication channels such as email, phone, fax, or portals. Likewise, it reduces the labor required to fulfill B2B interconnectivity needs, thereby increasing productivity and reducing costs simultaneously.
EDI transaction types are designed for different processes. A EDI shipping order issued by a manufacturer to a warehouse has all the information needed to ship a product to a retailer. This includes a shipping and billing address plus a list of standardized product numbers and qualities. A buyer looking to receive more merchandise only needs to send a purchase order.
The 10 top EDI trends in 2023
1. EDI platforms gaining popularity among small businesses
As EDI becomes less of a novelty and a necessity, small- and mid-sized businesses have become more reliant on it. However, these businesses need to refrain from implementing in-house systems for EDI. Instead, third-party services that leverage EDI transactions are becoming the new standard.
Empowering a business through an EDI network provider has become easier than ever. Top-of-the-line EDI solutions are available at a fraction of the cost of in-house EDI, providing businesses with cloud-based perks such as remote access and visibility. Companies that were previously stunted by a lack of technology or unattainable industry standards can now thrive thanks to SaaS EDI.
2. Increasing demand for IT professionals
Despite the growing popularity of EDI, computer science professionals capable of deploying proper EDI B2B integration are becoming rare. Soon, companies looking to implement in-house EDI will need more qualified staff. While certain industry professionals claim this might be a turning point in the use of EDI, others ascertain that the lack of EDI expertise should be a significant concern for companies.
3. Healthcare EDI market expansion
EDI has experienced continual growth for the last 40 years and is particularly important for the healthcare and logistics industries. Thanks to its synergy with HIPAA regulations, healthcare EDI stands tall as a prime source of EDI growth. Considering the incoming drought of EDI-specialized IT talent, healthcare industry professionals should strive to acquire a satisfactory EDI solution as soon as possible.
Recent research provides a positive outlook for those interested in the future of the healthcare EDI market. The global healthcare EDI market is forecasted to grow by more than 10% by the end of 2033. The healthcare EDI market is expected to garner nearly USD 10 billion (source).
4. EDI as a driver of digital transformation initiatives
While the Covid-19 pandemic was a significant catalyst for the accelerated digital transformation initiatives of recent years, the efficiency found in digital processes has incentivized their long-term adoption.
One area that is the most positively affected by the adoption of digital technology is the supply chain. Processes that were previously considered to be complex and time-consuming, like the repetitive filling of shipping forms, can be handled by EDI in the blink of an eye. Companies engage digitally with their partners daily at volumes once considered unattainable.
5. Embracing cloud-based EDI networks
Cloud technology has already been around for the last two decades. However, it still has ample space to grow and develop. For instance, only a tiny percentage of current warehouse management systems in the US implement cloud-based technology.
A growing number of retailers require specific EDI compliance capabilities. Meanwhile, these compliance capabilities can help distribute products to hundreds or thousands of distribution points. It is expected that, due to demand, revenue, and the B2B sales potential of EDI, more warehouses will make the switch to a cloud-based, EDI-integrated infrastructure.
6. The expansion of e-invoicing mandates
Regulatory bodies worldwide are interested in expanding the proliferation of electronic data, particularly electronic invoice data. From South America to Scandinavia, mandatory electronic invoicing is becoming the norm. Countries like Italy have already made away with paper invoices in Europe, and France plans to do the same from 2023 onwards.
New government mandates and industry initiatives have continued the broad appeal of EDI. One of the most notable changes to EDI protocol is the Pan European Public Procurement Online (PEPPOL) standard. This system was created to simplify the purchase-to-pay process of Business to Government (B2G) transactions.
The PEPPOL standard has been widely adopted across Europe, with 31 countries already making use of it. Due to its efficiency, the standard has also been accepted by Australia, Canada, New Zealand, Singapore, South Africa, and the United States. It is expected that the PEPPOL or similar future standards will expand to new markets and facilitate the automation of business processes at a bigger scale.
7. The diversification of markets
Regardless of the benefits EDI software brings to B2B connectivity, many businesses still need to take full advantage of their potential. More often than not, companies have stuck to their tried-and-true methodologies and have thus ignored the profit-making capabilities of collaborating on a global scale. Indeed, a detailed analysis of the US export market shows that, even when more than 8% of the country’s economic output (about $2.5 trillion) comes from exports, less than 1% of American businesses export (source). US companies must collaborate internationally in order to expand their reach.
Current EDI software trends are critical to the expansion of international business. Standard EDI processes like automation solutions help companies stay on good terms with global trading partners by enabling fast payments and avoiding disruptions to the supply chain. The software empowers companies to comply with hundreds of different buyer standards, helping avoid penalties such as chargebacks.
8. Better data exchange capabilities
We are currently experiencing an upward spiral in the way data is handled. Thanks to the constant expansion and monitoring of data supply chains, new and exciting ways to improve business processes are being developed. As EDI becomes more commonplace, it helps improve data visibility, ERP, and forecasting capabilities.
Better data exchange capabilities allow businesses to take a proactive approach to management. Businesses in different countries can collaborate and synergically expand their operations. Improved access to data will enable companies specializing in electronic sales to accurately gauge demand and ship appealing products to distribution centers without fearing unsold merchandise sitting idle for long periods.
9. EDI and eco-responsibility
EDI can offer much more than a competitive edge in business. From invoices to shipping orders, the traditional way of handling business transactions generates tons of paper waste. In comparison, the ones and zeroes comprising EDI software require no paper use.
Just as email and instant messaging apps have made business-related postage a thing of the past, so does EDI bring the business world towards a paperless age. Not only is this better for the environment, but it also means that offices will be better organized and less cluttered by file cabinets.
10. Improving efficiency via EDI standardization
In 2023, working with different document forms and standards will seriously hinder a business. EDI creates a general standard for all documentation, avoiding situations where an extra amount of work is required to fulfill the particular requirements of different partners.
If you’re working without a proper standard, you may need to format purchase orders and invoices differently for every partner. Not only is this cumbersome, but it will also take considerable time and effort from your accounting team. With EDI, all your documents follow the same organizational standard, streamlining all processes and eliminating the need for tedious manual labor.
Invest in the future of your company by partnering with Vantree. Whether you’re looking to enhance your EDI automation capabilities or adopt a state-of-the-art Web EDI service, Vantree has the tools and expertise to help you achieve your goals.
Our Web EDI provides a robust software environment to cover all document transaction needs. Thanks to a personalized workflow, you can have visibility on all transactions from anywhere and anytime. You can send and receive EDI documents in just a few clicks. The software handles all the heavy lifting.
The benefits of Web EDI include:
- An easy-to-use interface allows you to search, view, print, and save all relevant document types.
- Modern reporting tools that provide daily and weekly reports as well as personalized email notifications
- A secure, password-protected software environment
- Increased operational efficiency while also improving the time and cost-effectiveness of processes
- A 24/7, team-based, and constant business EDI support service from dedicated solution agents
- A low-cost entry to EDI that can seamlessly integrate with other business systems