Edi: Cost vs. Benefit

Topics: Cost, Cost-benefit analysis, Costs Pages: 8 (1792 words) Published: October 31, 2012
Preparing a Cost/Benefit Analysis for your EDI
Implementation Project: How a new type of EDI can help
you save money and grow your business
The Telegraph was perhaps the first big invention that allowed companies to communicate with each other by exchanging documents that exceeded the postal service. It allowed information to travel end-to-end at the speed of light, at what was then accepted to be an affordable cost. Then there was Teletype and Telex systems which grew to span the world , allowing businesses to exchange a whole page of information in around two minutes. While this allowed companies worldwide to do business with each other more effectively , it was still largely paper-to-paper based, and did not allow for the transmission of raw data, a need that increased rapidly with the use of digital computer systems in companies across the 1960's. This created the opportunity for large international corporations such as retailers, manufacturers and transportation providers to work together to create d irect data links between systems in the shared vision of a paperless office and having a more reliable communication system that eliminated human error and cut costs. These were the first steps towards electronic data interchange (EDI), which has been a major form of document exchange since then all over the world. It was implemented to overcome some of the challenges relating to Paper Based transactions, and the exchange of key documents in this way. At it's core, EDI is the computer-to-computer exchange of standard electronic business documents such as purchase orders and invoices between two organisations without the need for human interraction.

Doing business has come a long way since the mid sixties when this was nessecary, but the challenges and pains that it was introduced to overcome are quite often the same. This is because while efficient, EDI was costly to implement and even harder to scale across a

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carrying EDI messages for over 90% of the Fortune 500 companies optimising large number of organisations. EDI however, despite it's bad reputation has been reliably collaboration and reducing the cost of doing international business with their partners for over fifty years. Likewise, in finance markets, EDI is the central figure in the global financi al system. However, less than 30% of all other companies in the world are EDI enabled, and have yet to realiza the immense benefits that such a system has to offer. Just as the system of using the Telegraph to exchange messages seemed outdated to a company using EDI technology, so again should it be to a company who has updated their EDI system when they consider moving back to the old one they used. Despite the potential mass of benefits the old system offered, many enterprises, as already stated were reluctant to implement it, due to the perceived problems, including the difficulty of justifying the investment and the infastructure it required. EDI has, as with most other communication methods, come a very long way since the mid sixties however, now it has a host of smart and intelligent add-ons and features available that may never have been thought possible on its creation. For example, with the simple click of a button, Hauste Enterprise users have assess to a Business Intelligence Service that shows real time actionable business intelligence on their whole supply chain from order right through to invoice payment, which can automatically be triggered having been correctly matched on our invoice matching system. EDI in it's new form today can facilitate the radical restructuring of business procedures, leading to a fully paperless office allowing companies to benefit from all of the benefits (both operational and strategic) imagined with EDI and much, much more.

Operationally, EDI offers short term benefits including enhanced speed...
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