Why Connecting EDI and ERP Is Important

For EDI-implemented companies, integrating transaction processing with ERP is the single biggest saver in improving process efficiency and reducing errors. Reaching the ultimate connection means minimizing keystrokes and eliminating duplicate effort through electronic, system-to-system updates of information.

ERP (Enterprise Resource Planning) is a system to facilitate the flow of information throughout all the business functions within the company as well as interactions to outside partners. EDI takes charge of transmitting documents between organizations.

The importance of an EDI system is that computers can read and understand EDI messages whereas when you receive an order by emails or faxes, you then have to key the order into your accounting software. With EDI, you can read messages and convert them into sales orders or other documents directly without human intervention.

EDI replaces traditional methods of business communication, i.e. telephone and fax, with electronic means of document transmission. Using computers to electronically exchange communication and documents has greatly decreased administrative costs.

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EDI – Electronic Data Interchange and B2B Integration

For EDI-implemented companies, integrating transaction processing with ERP is the single biggest saver in improving process efficiency and reducing errors. Reaching the ultimate connection means minimizing keystrokes and eliminating duplicate…

Betty Machny

EDI Expert * Developer * Onboarding * Connectivity * Bilingual

One of my trading partners was a big, well known company. They kept complaining of duplicate POs. Whenever we investigated, we would find out the issue was that when they received our orders via EDI, they were printed and put in their system manually! There was nothing to prevent 2 people from entering the same order!

Bob Rose

Domtar Sr. E-Business Systems Integrations Analyst

Well said, Ken. To summarize, fully integrated EDI means changing the way business is done.

For companies still doing “rip & read” EDI (like the one Betty mentions in her post), a method that can be used to fully automate the process is to develop a data exchange layer between the EDI server and the ERP system. This layer does all the processing necessary to complete the information to make it processable. For example, if it is an inbound purchase order, the process would extract any necessary information from the ERP system’s database to make the order load without anyone having to key anything. If the data is in the EDI and/or the ERP system, let the computer take care of it.

On the outbound side, if the ERP system extracts data for print, fax and/or email, the same extraction can be done for EDI. Have the data exchange layer do the extraction, then pass it on to the application that needs to format the data into the appropriate media. If the EDI system is robust enough to do any-to-any format and communications, let it determine which map to use based on the trading relationship and how to transmit.

Automate the process between ERP and EDI systems and free the employees to work on growing the business.