Many EDI Solutions Exist in the Market. What is the Right Solution for Your Enterprise?

From on-premise to iPaaS Managed Services, there are many ways for your business to consume EDI capabilities. Let’s take a look at the various models and the pros and cons of each.

In general, companies that operate on premise EDI solutions operate there own EDI and B2B gateway infrastructure(s) and a team to support the underlying infrastructure, data mapping, onboarding, and support for all the various formats. 

Typical Software Capabilities include:

  • Software support for data transformation and some standards
  • Many support legacy VAN messaging services as core transport mechanism
  • Can support protocols direct protocol like AS2. Many embed Managed File Transfer protocols like sftp via sftp server and sftp clients
  • May have ERP based connectors to major ERP vendors
  • May leverage legacy VAN messaging services

Pros

  • Businesses that want to manage these investments and control over there integration within there data center

Cons

  • Resource and required skillset elasticity
  • Costs – (Did you know) that 5 is the average number of disparate B2B systems and organization operates and supports
  • Fixed IT budgets can limit Business Agility. The average company spends 70% of IT budget on keep the lights on activities. In EDI context, this applies to the support of aging and redundant infrastructures. This allows for minimal dollars to be added for development capacity

Outlook: Due to the complexities associated with operating in many cases integration software to support the various requirements, coupled with other consumption models such as a B2B Managed Services and iPaaS, the sales of on-premise EDI software and traditional VAN messaging has decreased over the past decade, year over year. 

Also known as “EDI Managed Service”, “Outsourced EDI”, or “Integration Brokerage”, the term B2B Managed Services refers to EDI based solutions where companies outsource the EDI infrastructure and Management to a B2B Managed Services Provider

  • B2B Managed Services providers provide the EDI technology (Software and Infrastructure (Technology)
  • B2B Managed Services providers provide Onboarding Services (People and Process) to support data mapping, connectivity, and onboarding services including Program Management
  • B2B Managed Services providers provide Support Services (People and Process) for steady state and change management of the trading network
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Pros

  • Businesses outsource the complexity of managing EDI infrastructures to a trusted provider
  • Business get the benefits of resource and skillet elasticity outsourcing EDI skillsets to a trusted provider
  • Business agility – Businesses can get EDI program efforts completed without needing to add to I/T staffs 
  • Complexity of EDI integration moves to the B2B Managed Services Provider

Cons

  • Provider may not be able to support all EDI requirements or other Integration Needs (Due Diligence Required)
  • Many B2B Managed Services do not allow self service and control the development activities on there platform
  • Overall, costs should be a benefit of a B2B Managed Services model, but ensure your provider provides transparent pricing for steady state support and operations. 
 
Outlook: B2B Managed Services has grown in the recent decade as many businesses have outsourced part of all of there EDI program elements to trusted providers.  It is important to understand the distinction between B2B Managed Services providers and iPaaS providers that have a B2B Managed Services offering.  Pure Play B2B Managed Services providers may specialize in EDI only and do not have the technology platform to support other integration patterns (e.g API, Cloud, IoT etc.. ) thus still requiring Enterprises to make investments in other technology platforms.  Additionally, many of these providers are taking the on-premise software and “hosting” this software in there data centers. Many of these are not true cloud based deployments.  

An integration platform as a service (iPaaS) solution provides capabilities to enable subscribers (aka “tenants”) to implement data, application, API and process integration projects involving any combination of cloud-resident and on-premises endpoints. This is achieved by developing, deploying, executing, managing and monitoring integration processes/flows that connect multiple endpoints so that they can work together. An iPaaS solution is typically used for cloud service integration (CSI), application-to-application integration (A2A), business-to-business integration (B2B) scenarios and, increasingly, for mobile application integration (MAI) and IoT integration scenarios. Gartner considers an iPaaS solution to be enterprise iPaaS (EiPaaS) if it: Is designed to support enterprise-class integration projects; that is, projects requiring, high availability/disaster recovery (HA/DR), security, service-level agreements (SLAs) and technical support from the provider.

  • Some iPaaS providers provide EDI platform technology (EDI Software and Infrastructure Technology) as part of the overall integration offering, although the primary offering of many iPaaS providers is to provide a technology platform for customers to build and configure there integrations
  • Many of these providers offers B2B Managed Services, in addition, to other data integration services to connect to a client’s business ecosystem
  • Consumers of iPaaS can get the best of all worlds through selection of the “right” platform. This includes a broader technology platform offering than traditional Integration Brokerage offerings. Coupled with a B2B Managed Services offering, Enterprises can optimize there investments in integration technology and improve TCO.
 

Pros

  • Businesses outsource the complexity of managing EDI infrastructures and perhaps all data integration requirements to a trusted provider
  • If iPaaS provider provides Managed Services capabilities, businesses get the benefits of resource and skillet elasticity outsourcing EDI skillsets through the providers solutions, extending the integration technology capabilities significantly for the Enterprise via a single platform
  • Business agility – Businesses can get EDI program efforts completed without needing to add to I/T staffs 
  • Complexity of EDI integration moves to the iPaaS B2B Managed Services Provider or via Systems Integrators who are trained on the platform to deliver integration services
  • SaaS licensing typically applies and tenant does not have to worry about infrastructure management for integration software. Upgrades are part of the SaaS license

Cons

  • From a TCO perspective, this approach provides the best value.
  • Similar to B2B Managed Services, ensure your provider provides transparent pricing for steady state support and operations and that flexible service models are available for customers.
 
Outlook: Enterprise integration as a Platform (iPaaS) has grown significantly in the past few years as many businesses get the benefits of a robust technology platform that can knit all data endpoints, but provide the flexibility of choice for integration consumption. Consideration for a iPaaS platform that provides a flexible service consumption model provides the best of all worlds for tenants. This freedom of choice can allow a customer to perform the integration and onboarding services with existing staff without locking them into a Service Model. The B2B Managed Services can be there for a customer to augment existing staff or as an extension of the customer’s integration Center of Excellence.

Multienterprise supply chain business networks support a community of trading partners that need to work and communicate/collaborate on business processes that extend across multiple enterprises, with an end-to-end / shared focus. Such networks are owned and managed by third-party software vendors, and provide their community of buyers, sellers and partners with multienterprise functionality, services and security. It is the shift from enterprise centric mindset to a real multienterprise in support of an outside-in approach

  • Business Networks provide Business Process Execution as part of a network solution and as part of this solution, provides an EDI infrastructure to connect to trading partner ecosystems
  • These providers do not provide a complete EDI solution for there clients, but only support those messages that support the business process. 
  • These providers typically use a canonical model approach to support any-to-any-to-any map integration to integrate dat between trading partners, tenant ERP systems, and the Business Network applications.
  • Enterprises license the process applications + data integration required to support the business process
 

Pros

  • Can put EDI flows into business contexts
  • As part of standard solution, can provide process visibility into integration flows with visibility and exceptions

Cons

  • Business Network providers, in general, do not provide B2B Managed Services to support a holistic integration service for Enterprises, but targets integrations that feed the Business Processes they support
  • For example, Business Networks that specialize in a Supply Chain Network process management may support Supply Chain EDI, but most likely that client would need another EDI solution to support other types of EDI they may require g. Healthcare Enrollment of their employees with Insurance companies via EDI 834, Lockbox integration with a financial institution via 823
  • Costs – These process based solutions are costly. Additional integration infrastructure still required to support other parts of the Enterprise that will require additional investments in integration infrastructure.
 
Outlook: If your Enterprise Business requirement requires an Enterprise Business Networks to support your networked business process then these solutions are worth looking into. Typically, these businesses offer minimal methods for data integration needs and not considered as integration platforms, but support edge use cases for process integration.