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SaaS EDI or On-Premises EDI Translation Software: What you should know

This post was updated to reflect current trends and information.



Should we migrate our EDI integration and processing platform to a SaaS EDI platform or instead, adopt an EDI translation software on-premises?

The above question is asked by many business executives when involved in EDI integration projects, either when a contract or license with their current EDI provider or translation software comes to an end or before signing for a new EDI business relationship with a new partner. All of these reasons are valid and lately, this topic of discussion is being brought up much more, simply due to the popularity of “cloud” enhanced capabilities and security and Software as a Service (SaaS).

More and more enterprises are working to improve their supply chain management, which leads to companies adopting software applications (as a service). This allows them to increase efficiency, provide higher availability, reduce costs and increase profitability.

Today’s article will address the points every business owner should be evaluating when looking for an answer to the above question.

Enterprise IT Governance & Policy

The first thing to look at before making a decision on whether to go with SaaS EDI or to adopt an EDI translation software, is the company’s policy and IT governance, i.e. the rules and procedures that govern technological implementations and processes. What is the policy and general rule to implement software systems (including EDI)? What are the security measures and privacy rules?

Most companies of different sizes establish strict IT governance rules and procedures and follow these guidelines as much as possible. From my own observations, I have noticed that many enterprises, that have more than 20M of revenues per year and that use enterprise software such as JDE or SAP, have strict rules stating that they can only deploy software solutions on their own premises. However, today we are seeing more of these enterprises going for cloud and SaaS offerings, as it fits their needs much better.

EDI Volume

The second important point to look at is the volume of EDI data you wish to exchange with your business partner (or the current volume if you are already on EDI). This will give a good indication as to what direction your company should be leaning towards. In my professional opinion, the volume of EDI transactions is not the only factor when deciding to convert to SaaS EDI or to adopt translation software, but it is an important parameter.

Point-to-point EDI or VAN

The third point is to look at statistics about EDI connectivity with your current EDI partners, or forecast them if you are new to the EDI world. In today’s digital world, most EDI transactions are going point-to-point between business partners in a very secured manner using the Internet pipeline and secured protocols such as AS2, sFTP, FTP, etc. There are less transactions going through a VAN in comparison to a few years ago, as VANs charge additional expenses for EDI connectivity, which can add up and become quite costly.

Current IT Architecture & Team

A company’s IT architecture and team are extremely important when making decisions about EDI integration and implementation. If the company decides against the SaaS EDI model, does it have all the necessary hardware infrastructures, connectivity protocols and security to internally handle all kinds of EDI processing? Is the IT team equipped to handle such a project? Do they have the expertise and know-how to implement, manage and monitor EDI processes, transactions and translations? If the answers to the above questions are ‘no’, then the enterprise is better off with the SaaS EDI model.

EDI Translation Software Licensing

Don’t forget to evaluate the EDI translation software itself, from cost to functionalities to yearly maintenance and support to the ongoing development and programming during and after the implementation phase. It is also important to evaluate the capability of the IT team working with the EDI translation software.

Read: Take this QUIZ: Is your business cut out for on-premises EDI software?

SaaS EDI Service Provider

Whether using the services of a provider under the SaaS model or on-premises, it is crucial to select the right service provider for EDI. SaaS EDI providers should have a lot of experience in not only EDI but also in EDI and systems’ integration. In addition, the turnaround and customer service and support for that provider are key points for a decision. Keep in mind that some major SaaS EDI providers only see your business as an opportunity to increase revenue and stock value instead of focusing on giving a personalized and amazing customer service.

Conclusion: SaaS EDI or EDI Translation Software?

We are aware that the selection process and choice between SaaS EDI and EDI translation software is a challenging one. We believe that by having the right mechanism and people in place, enterprises of any size can make educated decisions based on what’s best for their business.

If you need more information or help in determining which model you should go with, please contact our EDI team for a free consultation.

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EDI Translation Software “On-premises” or “As a Service”

This post was updated to reflect current trends and information.

As soon as there is a requirement for EDI implementation and integration, company executives, along with their IT personnel, begin by determining how they will comply with their EDI business partner to exchange EDI documents. They will need to acquire EDI translation software, initiate testing, and so on. This however is a complex and lengthy process, which many executives do not look forward to. Difficult questions arise, such as, “Shall we outsource to an EDI service provider? Shall we do it ourselves “on-premises”? Shall we do the translation and conversion of EDI “as a service” using an outside provider?

Which of these options is the best and most affordable way to go?”

Why Do We Need To Translate EDI

As you already know, EDI (Electronic Data Interchange) is the standard to exchange business data between business partners in a very proprietary EDI format. Your business partner would send data such as a P/O (EDI 850), an Inventory Inquiry/Advice (EDI 846), or any other EDI transaction, based on his own terminology of business parameters. It is then up to the “receiving party” to take the sender’s EDI data and information, translate it into a well-understood format, which the receiver’s system will be able to use and process. With EDI2XML, we translate the EDI format of incoming documents to a much simpler, more structured XML format so humans, namely the IT developers, and systems can easily work with.

Translate EDI “On-premises”

Normally, translating incoming EDI documents “on-premises” requires a lot of parameters before launching such a project. As a starting point, a good level of expertise in EDI, EDI communication, and systems integration is required. Integrators should also have a fairly advanced knowledge and expertise in how the company’s software system (ERP, CRM, etc.) works and how to integrate and push data into that system.

While the ability to integrate with the most commonly used ERP and CRM systems does not create any major challenge for experienced IT developers, the main problem is having a high level of proficiency in EDI implementation.

Another major task for the “on-premises” translation is, in most cases, the need for the company to invest on hardware, software licenses, and services (internet, dedicated IP, VAN) to be able to exchange EDI documents with their business partner.

Useful Reading: What are the advantages of using EDI2XML?

Translate EDI “As a Service”

With the emergence of cloud-based IT services and the affordable plans offered by service providers, the ability to translate EDI “as a service” in the “cloud” and deliver the end result to the ultimate destination, has become a more productive approach.

Typically, an EDI service provider offering EDI translation “as a service” will:

– Act as an intermediary layer between the EDI sender and EDI receiver

– Receives the EDI incoming document (i.e. 850, 860, 864,…) on behalf of the “ultimate receiver”

– Extract the data received in EDI format and translate it into a standard format (i.e. XML)

– Transmit the XML data to its ultimate destination for Integration OR integrate directly into the software system of the ultimate receiver.

To send EDI documents out, the EDI service provider will be acting also as an intermediary hub between business partners and do the following:

– Receive data in XML format to be sent to the business partner from the sender through FTP or sFTP

– Translate data received and convert from XML to EDI format

– Transmit that EDI data to the destination

Dive into the world of EDI (Electronic Data Interchange) with our insightful video explanation. Explore the video

 

Advantages of EDI Translation “As a Service”

With the EDI translation in the cloud offered as a service, companies have a lot of great advantages:

– Quick implementation cycle

– Secured and proven platform to exchange EDI with partners

– No initial investment on hardware or software licenses

– Get up-and-running quickly: your projects are on-time and on-budget

– Use the wealth of expertise your EDI service provider has in EDI

– Let your team of IT professionals focus on integrating XML files into your system rather than learning EDI

– Predictable and static recurring monthly fee for the service

– Possibility to move to “on premises” mode any time

– Ability to integrate to your system directly without your internal IT resources

Discover how you can streamline and simplify your EDI projects with EDI2XML Fully Managed Services

The Best EDI Solution

Most companies usually lean towards the “on-premises” option when they have “internal policies” and security measures in place or are a large enterprise with their own team of IT experts.

The “as a service” option is much more advantageous for small to mid-sized enterprises, where they may have a lower number of exchanged EDI transactions.

As the “as a service” option’s low initial investment and quick deployment are attractive features, every situation is different and should be dealt with on a case-by-case basis with one of our EDI experts prior to making a final decision.

 

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