There are many different types of Electronic Data Interchange (EDI) companies that provide a variety of products and services to help business exchange Business-to-Business (B2B) electronic documents with other businesses. Most businesses have a need for a third-party EDI company to help them with their B2B integration. The challenge is select the right type of EDI company that has the right mix of EDI offerings that meet a given business’ EDI needs at a competitive price.
Types of EDI Companies
Value Added Networks (VAN). Core VAN services include EDI translation services, secure data communications, and mailboxing services. Many VANs support “hub-and-spoke” operations where a major manufacturer or retailer uses the VAN to connect to thousands of their suppliers. Most VANs are also full-service EDI providers that provide a full range of B2B data integration services as well as sell EDI-related software. Example VANs: GSX, Sterling Commerce
B2B Portals. These EDI companies are similar to VANs, but cater to a specific industry or supply chain service such as reverse auctions. B2B portals are more community oriented servicing hundreds or thousands of companies that interconnect and collaborate with each other on a regular basis. Example B2B Portals: GT Nexus | Ariba Network.
EDI Software Companies. These companies provide prepackage software or Software as a Service (SaaS). With EDI software companies, they sell software and the business customer operates the EDI software to include EDI translation, secure communications, and possibly mailboxing services. Many of the larger EDI software companies also provide managed services (VAN services). Example EDI Software Companies: Softshare | NuBridges.
EDI Service Providers. EDI service providers usually cater to small and medium businesses to provide EDI translation, connectivity, and EDI supplier compliance for a given industry as well as a specific “Big Box” retailer or manufacturer. EDI service providers also provide contract EDI staff for larger businesses. Example EDI Service Providers: Best to get a referral from like trading partner in your industry or local area.
B2B Integration Companies. This is an emerging market where B2B integration companies are provide EDI tools, connectors, APIs, and services to IT shops to integrate the exchange and sharing of businesses information across multiple businesses. Example B2B Integration Companies: ECGridOS | HubSpan | E2Open
Selecting the Right EDI Company.
Businesses need EDI because they need to collaborate with other businesses to exchange electronic business documents (ex. purchase orders, invoices) and other information. Depending on the level of B2B collaboration will determine what type of EDI company that a business should use. Businesses can generally be classified into one of four types of B2B collaboration models that in turn drives their B2B integration and EDI needs. Types of business collaboration and their EDI needs are as follows:
- Traditional – Independent, Uncertain B2B Relationships. Examples of this is any type of auction like eBay auction, reverse auctions, and commodity-type markets as well as new businesses that desire to leverage EDI technology. This level of B2B collaboration have limited EDi needs. Normally, these companies will use an industry specific B2B portal or use a niche or local EDI service provider to assist them on occasion.
- Opportunistic – Dependent, Uncertain B2B Relationships. Example of this is a seasonal supplier or a supplier that is attempting to establish a long-term relationship with a retailer or manufacturer. Normally, these companies will use a third party provider that specializes in their industry. Their larger customers will determine if they use a VAN or directly connect to them. Their large customers may or may not provide EDI software and assistance to exchange electronic documents.
- Tactical Collaboration – Independent, Certain B2B Relationships. Example of this is when two businesses are regularly doing businesses together, but at least one of the businesses has not realize the extent of the relationship. Medium size to large companies may elect to buy EDI software and hire their own EDI staff. Other companies may continue to outsource their EDI needs to a VAN or use a EDI services companies. Select industries will rely on a B2B portal. This level of B2B collaboration can be very expensive for some businesses if they are not proactively looking for ways to reduce costs and identify the right EDI solution for their business
- Strategic Collaboration – Dependent, Certain B2B Relationships. Many International and large businesses as well as their suppliers seek this type of relationship. Normally, larger companies will have their own EDI shops, use EDI software, and do some level of EDI software development. Also, they will use VANs where required as well as B2B portals. In some cases, they may leverage B2B integration tools and services to gain a competitive advantages or possibly reduce costs.
See postings:
The Relationship Between Business Collaboration and B2B Integration |
B2B eCommerce Resources |
B2B eComerce & EDI Trends for more information.
