Microsoft Dynamics 365 Supply Chain Management EDI Pitfalls

The benefits of EDI are easily identifiable with enhanced efficiency, better data integrity and accuracy, as well as cost reduction on removal of excessive manual efforts.  What is not discussed are the potential pitfalls or shortcomings of EDI and how to address them.  Here we plan to dig in and bring some of that to light.  

Implementation Cost: This is the initial upfront cost to setup and develop the required mapping and routings of all your trading partners transactions in/out of your D365 application.  There is typically a significant amount of effort required to coordinate the efforts with yours and your Trading Partners VAN for connectivity.  Some may choose to go direct to keep that cost down, but the effort is still there for the initial connection.  

On-Going Maintenance Cost: EDI connectivity as well as hosted services especially in cloud-based solutions that are more common in today’s business world there are on-going costs based on annual subscription cost, transactional traffic, and number of trading partners can be some of the various areas where a company can incur on-going cost.  

Data is the key component to every EDI solution, after all data is what is transmitted via each EDI document.  There are many things that can occur in the transformation and ultimately has the potential of providing inconsistencies through formatting, errors, corruption, or even loss. These key items can greatly impact your business relationships with your trading partners.  

Security: Protecting your company’s, employees, and trading partners sensitive data is also a large concern within the EDI space.  This can be of great concern as it relates to financial data especially any EFT transactions that might be transporting between you and your banking institution.  Options for encryption and additional system security measure can come into play and often add an additional level of technical experience and cost.  

Integrity: Ensuring the accuracy or the integrity of the data as it transacts from one format to another till it reaches its destination can open a door for inconsistencies and data transformation that could alter the data from its original form.  The inconsistent and invalid data can greatly impact your supply chain.    

Complexity of a solution will impact the setup and development of that solution which can also have a direct impact on the overall cost of the implementation.  

Integration: Integrating into D365 can be challenging based on how each integration point is designed and setup to send/receive EDI data.  Whether that integration is API, ODBC, File Integration, etc.  The cloud-based install of D365 can also provide its own set of challenges especially when you’re working through a file integration solution versus a standard connector.  This complexity will often require additional resources skilled in the various areas to aid in the overall development of the solution.  

Interoperability: How a trading partner interprets the standards leveraged for EDI today, ANSI X12 or EDIFACT, can be inconsistent across your partners or even your partners separate divisions or businesses.  These inconsistencies can lead to additional setups and or even development to accommodate them all individually.  This too can require additional resources as well as time and money to implement each scenario.  

Flexibility to market changes that impact your trading partners or potential trading partners business demands required being able to quickly move and get you EDI integrations updated or added to your current systems.  An overly complex system can add delays to that process and limit your ability to be flexible enough to move to your trading partners demands.  

Scalability of an EDI solution to the potential future growth of an organization is often overlooked.  Typically, the solution is designed and developed to the current needs, demand, and budget.  As the business grows, and turnover of resources occurs the solution acquires many Band-Aids along the way and issues start to occur as it was not designed or maintained for scalability.   

Interdependence of Trading Partners can greatly impact the success of EDI if you do not get the full cooperation of your trading partners.  While you can manage and control your EDI solution you cannot control how your trading partners system responds or is managed. Effectively communicating changes to their transaction sets or requirements should come in a timely and documented fashion however it’s not always how they are received, and this can add a level of chaos to the demands on your EDI system.  Not to mention any technical issues they might encounter resulting in down time or delay in receiving any transactions at all.  In addition to this the financial stability of your trading partner can also impact their ability to keep their system running smoothly and prevent delays as well.   

Conclusion to this is the benefits of EDI can far outweigh the pitfalls if evaluated and maintained correctly.  The key is to evaluate your needs regarding your businesses must haves versus your nice to haves and keep looking to the future to allow the growth of your organization to be in sight for your EDI plan as well.  After a proper evaluation you may even decide now is not the time to incur the costs as the volumes do not account for the benefit you are looking to gain and plan to revisit the discussion in the future.  

When the time is right, and the cost make sense it really depends on what the needs are to build the proper scalable solution.  Items such as infrastructure, security, cloud base managed solutions, and technical details should come into play.  Identify the items you need at a bare minimum to bring your organization the immediate cost/benefits of an effective EDI solution.  Also look at what your growth should look like and what advancements or upgrade plans might be in place for the future detailing out when you might expect them.  Then come back to that plan and re-evaluate the current solution with the current health of your organization.   

Goals, and business plans will change continuously for your organization over time as do your trading partners. Staying in front of them and being able to re-evaluate your current state will help you to limit the pitfalls that you could encounter.  

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