Offshore Outsourcing of EDI

The topic of offshore outsourcing is raging throughout the information technology industry. It is expected that by 2010 25% of all IT jobs will be moved to developing countries. The benefits of offshore outsourcing are real and companies are looking into outsourcing more specialized areas of IT. EDI is one of those areas of specializations that are being considered.

If your organization is looking to take advantage of EDI offshore outsourcing you should consider a few things. As I mentioned in my earlier post, being successful in EDI is more than knowing the pure technology of creating a document format. Consider finding a partner with a solid experience delivering solutions specifically in the area of EDI. This is a very basic yet a very important point to understand. You will not consider giving a project of developing a mobile application to someone who knows only how to build website or desktop applications. Similarly, you should be careful not to give an EDI project to someone who has done just some data conversion or development.

I would suggest asking the following questions when looking for a partner to outsource your EDI offshore.

• What level of knowledge in EDI does the company possess?
  It is difficult to gauge a company’s knowledge of EDI without extensive EDI experience of your own. Consider reviewing completed projects to see how they match what you are planning to do. If possible, talk to customers and assess the level of satisfaction and the success of the project.
• Does the company have a local presence in North America?
  Success of any project depends on the quality of the collected requirements. Even if you are planning to provide detailed requirements for the project using your own resources, the availability of a local analyst will greatly increase your project success. He or she not only will provide additional EDI expertise, but will bring a good understanding of the outsourcing process.
• What is the core competence of the company?
  It is always better to deal with someone who specializes in your specific requirements than dealing with someone with superficial knowledge. However, it is equally important to have broad knowledge of the technology even if you are not planning to directly employ it in your project. A wider knowledge will assist the company in making better recommendations rather then just following your minimum requirements.
• How well is your industry understood?
  EDI processing is closely connected to business processes. Understanding industry specific requirements will reduce the probability that something is missed or misunderstood.

Offshore Outsourcing can greatly improve your operations and save you both time and money. Take the time to evaluate your partner and do your homework before jumping in.

EDI in Business

EDI is a big part of electronic business. It was developed in the mid 1960s, initially for the rail and road transport industries. The popularity of EDI has grown a lot since then. There are currently two major EDI standards ANSI ASC X12 and UN/EDIFACT. In North America, X12 is the most commonly used EDI standard, while EDIFACT is used mostly in Europe and is considered an international standard. The standard to use is usually mandated by your trading partners. Today, it is hard to find a large company not using EDI in business.

Some companies think that it is enough to have a technical resource to make EDI happen, or that any software capable of producing EDI output will be good enough. Not so simple. The success of an EDI implementation is measured in the benefits or problems it brings to the business. I find that few organization were able to successfully implement EDI on their own, although many tried. The difficulty of EDI is not in producing the required format, but in making sure it will work in your business. Did you know that for medium size companies in the retail industry ‘EDI’ problems most often surface as problems in cash flow, lost of revenue due to EDI charges (fees charged for your mistakes), and lost business? Take a look at the following EDI stories, you will better understand what I am talking about.

A properly implemented EDI solution can expand your business. A poorly implemented solution can damage a business relationship with your customers. Before jumping into EDI organizations should consider their options. Today companies considering or using EDI have many different choices available to them – implement in house, offshore, or outsource. Each has its benefits and problems. The key is selecting the right partner to help in the process.