The Benefits of EDI & ERP Integration
Your business likely has processes and data that it relies on to function. When data is disorganized and processes conflict, things slow down—but when your data is centralized and processes are optimized, you can rest easy knowing you’re on the path to success.
This realization is not new, and companies of bygone days invested significant time, resources, and labor into keeping things running. Fortunately, businesses now have access to technology specifically designed to make operations more efficient, transparent, and cost effective. And even better news is that some of these systems work better when paired together.
We’d like to introduce you to EDI systems and ERP systems—what they do, how they work, and why integrating them may be the best solution for optimizing your business processes.
What Is an Electronic Data Interchange (EDI) System?
How often do you have to share data or communicate with another company?
Think about it: purchase orders, payment documents, shipping notices, invoices, status updates, and more all require sending documents from one computer to another. Things can quickly get messy, with different document formats at play and security threats around every corner. What’s a business to do?
Never fear! EDI is here.
An electronic data interchange (EDI) system is technology that works behind the scenes to facilitate a smooth, seamless, secure, and standardized exchange of business documents between trading partners. This system controls every facet of document exchange, not only enabling the rapid transfer of vital business information but also eliminating many manual processes that introduce errors and take up valuable resources.
What Is an Enterprise Resource Planning (ERP) System?
Pay no attention to the man behind the curtain. The reality is that for many businesses, the man behind the curtain is actually an ERP system.
An enterprise resource planning (ERP) system is a powerful tool that manages critical business operations, including human resources, finance, marketing, sales, supply chain, purchasing, customer relationship management, and more. The solution makes it easy for businesses to collect, store, organize, and analyze diverse business data into a single centralized location and provides real-time visibility into business processes, activities, and departments.
EDI vs. ERP: What’s the Difference Between EDI & ERP?
On the surface, EDI and ERP systems have a major similarity: They are both designed to make your business more efficient, transparent, streamlined, and optimized. However, there are critical differences between these two essential technologies.
Imagine an ERP as the brains of the organization, controlling everything. The EDI, then, is the central nervous system, with neurons that send and receive information to and from the brain.
Another way of looking at it is that EDI systems share information externally (with other businesses) and ERP systems share information internally (among departments). ERP handles your business data, and EDI exchanges it with trading partners.
While ERP and EDI systems carry out different functions, you can integrate them to enhance the performance of both as well as complete your tech stack.
Can These Systems Work Together? The Importance of EDI & ERP Integration
EDI systems can work as standalone technologies, as can ERP systems. But by integrating ERP and EDI, you can facilitate the automatic and seamless flow of data from one end of your business to another—enriching the functionality of both systems, creating a single source of data truth, eliminating manual processes, and leading to a significant boost in efficiency, transparency, and visibility.
That’s why integrating EDI and ERP integration is common among businesses. When integrated and properly configured, these systems help organizations exchange information between back-end and front-end applications as well as external partners.
Fortunately, modern ERP and EDI systems can be easily integrated. Talk to a trusted software vendor about your options for integrating EDI and ERP.
9 Key Benefits of Integrating EDI & ERP Systems
Integrating EDI and ERP systems will change the way your business operates, collaborates, and functions—for the better. While these systems serve different functions, their integration is a powerful way for organizations to achieve seamless internal and external communication and create an agile business ecosystem.
Let’s look at a few of the most impactful benefits you can expect from EDI and ERP integration.
1. Improved Data Accuracy & Synchronization
Integrating EDI and ERP allows data to flow automatically and seamlessly between your front end and back end. You no longer have to check if external purchase orders use the right file type for your system or worry that manually-entered customer information is accurate. Eliminating manual data entry and creating a centralized, shared database helps improve data accuracy and synchronization company-wide.
2. Increased Transparency & Visibility
Supply chains are long, complex, and often disjointed. An integrated EDI and ERP system provides increased transparency and visibility across the entire supply chain, including both external transactions (EDI) and internal operations (ERP). The single source of truth created by EDI and ERP systems means relevant parties have instant access to accurate information, better end-to-end visibility, and easier monitoring, tracking, and control.
3. Streamlined Communication
While EDI handles front-end communication between your business and your trading partners, ERP manages a centralized source of data on the back end. Integrating these systems improves and streamlines communication from end to end, reducing paper-based documents, minimizing errors, and automating manual tasks.
4. Better Customer Service
Customers may not know what’s happening behind the scenes, but they will certainly feel the effects of EDI and ERP integration. When these systems are combined, you will not only handle orders more efficiently and get rid of cumbersome paperwork but also ensure the communication process is smooth and streamlined. Better customer service overall? Yes, please.
5. Enhanced Operational Efficiency
EDI and ERP integration means that the EDI system focuses on making external transactions more efficient and the ERP system optimizes internal workflows and processes. A combined EDI and ERP system pools these resources together to help your business process orders quickly, respond to issues faster, serve customers more effectively, and automate operations as much as possible. The result is a more efficient, streamlined, and optimized organization.
6. More Partnership Opportunities
Companies looking for new partnerships want to work with businesses that are organized, streamlined, effective, productive, and modernized. Having an integrated EDI and ERP system makes your business more attractive to others and can open doors to more partnership opportunities in the future.
7. Superior Decision-Making Resources
Integrating ERP and EDI provides a comprehensive view of data, processes, and operations—both internally and externally—as well as a range of dashboards and analytics to make results easier to understand. With real-time data in hand, these systems inform superior, collaborative decision-making.
8. Reduced Costs
Together, ERP and EDI automate many different business processes, eliminating waste, minimizing costs, and even eliminating human error. They can also pinpoint cost inefficiencies in your business processes and provide solutions.
9. Ensured Compliance
EDI and ERP systems help ensure businesses comply with various industry standards and compliance regulations. They have built-in functions to run compliance checks and stay up to date with changes to industry and governmental regulations to make sure your business is on the right track.
Discover Industry-Leading EDI & ERP Systems at CAI Software
At CAI, we create innovative, production-oriented software to help our customers across a variety of industries streamline business processes and optimize their manufacturing environment. Our goal is to provide you with industry-leading solutions that improve your daily operations, all with excellent service and support.
Whether you are looking to automate production, increase your return on investment, reduce costs, or streamline operations, we can help. With our EDI and ERP systems as well as access to our expert team, optimizing your manufacturing processes is easier than ever.
Contact us today for a free consultation.
