Why Small and Mid-Sized Businesses Need to Automate their Operations

Introduction

On Wednesday, April 14^th, Philip Aguib, Sales Director at Vantree Systems, spoke to Leena Poodipeddi, Brand, Sales, and Marketing Strategist in the SaaS-EDI B2B integration space, and Jim Gonzalez, Owner of EDI support LLC on LinkedIn Live.

They discussed the need for EDI Automation for small and mid-sized businesses, the benefits of EDI Automation, various choices for small-midsized companies, the cost of chargebacks, and what to look out for in an EDI solution.

The challenge

Companies are asked to be EDI compliant with big-box retailers all the time. When these businesses are new to the market, they often choose the first company that the retailer recommends because it’s easier. That decision allows them to get their products in the store as quickly as possible and keep the positive momentum going in the relationship. Sometimes, that is the right thing to do.

The problem is, we see a considerable increase in companies using 5-10-15 different EDI portals to manage their EDI requirements with their customers. Depending on the business’s size, they can spend anywhere between 10-20hrs/week doing manual data entry into their internal systems, leading to mistakes and tension between internal and external parties.

Based on our research, we are not surprised to see that 96% of users feel extremely bogged down managing these portals because they hate being inefficient.

For companies out there doing EDI, we understand it’s essential to keep the positive momentum going into a new business relationship. The message is: stop and think about how to automate data in your internal system because 90% of the B2B traffic transmits through EDI. It’s that critical.

Also, it’s essential to explore the best solution for you because, after all, your business has unique requirements, and you are the buyer, so remember, you are in control.

Solutions

The reality is there are many solutions available, whether you are using a cloud or on-premises ERP. At Vantree, we have connectors that will allow you to efficiently and reliably import and export your EDI documents automatically from and to your system with a click of a few buttons. EDI is not the only format we support, and we also use formats such as API, Web services, XML, JSON, etc.

If you are a smaller business, you might be using Quickbooks or Sage products. If you are a medium-large size business, you might be using Acumatica, Microsoft Business Central, NetSuite, SAP Business One, etc. We have connectors for those as well.

If you are a larger enterprise, you might be using SAP S4Hana, Microsoft GP, Finance & Operations, Oracle, etc. We have automation products that integrate with any system, no matter the size of the business.

And since we’ve worked with the most significant trading partners, we know their requirements and can ensure you are compliant with them.

The key is, we make sure to give just as much attention to the trading partner requirements, as the requirements for the businesses, by applying custom business validation rules in the integrations to ensure that the data is accurate and the process is seamless for the users.

Benefits

There are so many small benefits, but here are the three major ones that we’re seeing:

Guaranteed ROI

Financially speaking, customers are guaranteed to see an ROI. Based on our case studies, medium to large customers save anywhere between $20,000-$50,000 in their first year by adopting EDI automation solutions and $50,000-$100,000 in consecutive years as their volume increases.

A McKinsey research paper also showed companies could see upwards of 300% ROI when investing in this level of automation. I know what you might be thinking, 300% is relatively high, but you must think of the cost of:
- Manual data entry.
- Mistakes, chargebacks & corrections.
- Inefficiencies and not scaling your business quickly enough.
- Negatively impacted customer relationship.
The costs add up!

Improved Relationships
From the trading partner relationship perspective, the benefit is you are keeping that positive momentum going, but instead of short-term, you are investing in the relationship long term. When adopting EDI automation solutions, you provide your customers with faster, cleaner, and more accurate data.

This decision shows your customers that you mean business and that you are ready to take on more if the opportunity presents itself. I cannot tell you how many times I’ve heard from customers that their trading partners are frustrated with them for “bad EDI behavior.”

Automation is especially critical when selling online through a marketplace like Amazon, Wayfair, Chewy, etc., or on your website, where we see an increase of 250% + YoY in volume. We are talking about thousands of single customers, orders, tracking notifications, and invoices. We all know what it’s like to have a negative online shopping experience. You don’t want that for your customers!

Happier employees
Lastly, one more benefit that is somewhat intangible but is critical these days is an improved quality of work for users. When companies invest in EDI automation solutions, they eliminate the headache of manual data entry, redundant tasks, and correcting mistakes.

As a manager or director, if you push for automation in your organization, you support your team’s quality of life. This decision results in happier and more engaged employees, which we all know is essential to a successful business.