On Wednesday, April 14th, 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.
Why Is Automation Important For SMB?
Automation is important for small and medium-sized businesses (SMBs) for several reasons:
- Increased Efficiency: Automation helps streamline repetitive and time-consuming tasks, allowing SMBs to operate more efficiently. By automating processes such as data entry, inventory management, invoicing, and customer support, businesses can save valuable time and allocate resources to more critical activities.
- Cost Reduction: Automation can help SMBs reduce costs by minimizing the need for manual labor and human intervention in various operations. By automating tasks, businesses can eliminate errors, reduce labor costs, and optimize resource allocation, ultimately improving profitability.
- Enhanced Productivity: By automating routine tasks, SMBs can boost overall productivity. Automation enables businesses to complete tasks faster, with greater accuracy and consistency, freeing up employees’ time to focus on more strategic and creative activities. This, in turn, can lead to increased innovation and competitiveness.
- Improved Customer Experience: Automation can play a crucial role in enhancing the customer experience for SMBs. Businesses can provide quicker responses, personalized interactions, and round-the-clock assistance by automating customer support processes. Automation can also enable businesses to analyze customer data and behavior to deliver more targeted marketing campaigns and tailored offers.
- Scalability and Growth: Automation provides SMBs with the scalability required for growth. Businesses can handle increased workloads by automating key processes without necessarily adding more staff. This allows SMBs to scale their operations efficiently, adapt to market demands, and seize new opportunities.
- Data Insights: Automation generates valuable data and analytics that can help SMBs make informed decisions. Businesses can gain insights into customer behavior, market trends, and operational performance by automating data collection and analysis. These insights can be used to identify areas for improvement, optimize strategies, and drive business growth.
- Competitive Advantage: Automation is increasingly becoming a standard practice across industries. By adopting automation tools and processes, SMBs can remain competitive and keep pace with larger enterprises. Automation allows SMBs to operate more efficiently, deliver superior customer experiences, and allocate resources strategically, giving them a competitive edge in the market.
Overall, automation empowers SMBs to optimize their operations, reduce costs, improve productivity, enhance customer experiences, and position themselves for growth in a rapidly evolving business landscape.
What Is EDI Automation?
Electronic data interchange (EDI) automation refers to automating the exchange of business documents and data between trading partners using standardized electronic formats. EDI is a structured method of exchanging business information electronically, replacing traditional paper-based processes such as fax or mail. EDI automation involves implementing software systems and advanced technology that facilitate the electronic exchange of data and streamline the associated business processes.
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 your business has unique requirements, and you are the buyer, so remember, you are in control.
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, 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.
There are so many small benefits, but here are the three major ones that we’re seeing:
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 relationships.
The costs add up!
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!
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.
For more information on automating your operations, click here. If you’re wondering if we work with a specific ERP, click here. If you have any other questions on what Vantree can provide for you and your business, don’t hesitate to contact us.
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