Electronic Data Interchange (EDI) is Dead, Long Live EDI…
Feb 6, 2010 Accounting Software
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Many of us suffered firsthand the debacle of Electronic Data Interchange (EDI) during the 1970’s and early 80’s. Multiple standards, clunky translation software, teams of technicians and rooms full of super computers represented the typical backdrop.
Affectionately known as a “hub and spoke” approach to supply chain management, it often involved suppliers forced to take archaic software that sat on a standalone PC, which if working would allow them to receive PO’s from their customer. Periodically, the poor supplier would check the PC for new orders, print them out and then manually rekey them in to their own computer systems. Genius!
This eNirvana (every buzz word back then remotely related to EDI started with an e) spurned a myriad of software and value added network suppliers who quickly got fat from their spoils. IT Directors professed the world of Supply Chain Management was now electronic and Financial Directors rejoiced at the resultant business benefits and cost savings.
Everything was going swimmingly well until the day a very well known and respected individual asked whether Electronic Data Interchange (EDI) was actually all smoke and mirrors. Why were there so many standards (and sub-standards), why were the costs so high, why was it restricted to just purchase orders or invoices, why was there little or no integration and why did it take so long to roll-out.
This same person though “claimed” to have the answer with a software product and set of data definitions that were so ahead of their time they made EDI appear decidedly prehistoric. Call it middleware if you will, a solution that threw caution to the wind and embraced a new phenomenon called XML.
The panacea of business to business (B2B) collaboration was we were led to believe now called XML and that it would solve all of the drawbacks associated with EDI.
Of course, whilst many jumped on to the bandwagon, hanging on to the shirt tails of Obi-Wan Kenobi, a few cynical (or should that be sane) individuals and companies took a different path. You see, and here is the fundamental flaw in XML and EDI, not one messaging standard or technology will ever become the de facto method for B2B communication, period. From a technological standpoint, what is needed is akin to a universal spoken language convertor, something that in real time allows people from France, Spain, China, Japan, England and Germany to hold a flowing conversation with each other in their native tongues.
Sounds fanciful? Well if you search hard, there are now emerging companies that are able to demonstrate universal business translators. Translators that sit within a supply chain, taking XML, EDI, flat-files and many other electronic file formats and in real-time converting these in to a format that is understood by the computer systems of connected parties. SAP can now talk to Infor, SAGE can communicate with Epicor and CODA can interpret Microsoft Navision. Now whilst this may have been technically possible with predecessors, none of us would argue that costs, timescales, speed and overheads would have grounded the project before it even began.
It’s fascinating to see how the landscape has evolved over the last few years to bring us to this point. People have finally accepted that no one B2B language will rule the World, failed supply chain projects litter news desks and archaic technology has been banished to the broom cupboard.
This new regime of software companies at the forefront of universal business to business translation offer their services on a fixed price basis, systems are managed and hosted on behalf of customers, they operate in real-time and are infinitely scalable. The killer blow though is their ability to get global supply chains communicating, without the need for them all to speak English.
Perceptant is a recognised expert in Supply Chain Management & Electronic Data Interchange (EDI) and has been linking supply chains for over 20 years. For a limited period you can get a free review of your supply chain by visiting their online B2B Collaboration and Integration Forum, which is found on their homepage.
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Tags: accounting, Accounting Software, business, computers, edi, Electronic Data Interchange, integration, internet, software, supply chain management
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