Over 30% of companies that use EDI do not use a VAN (Value Added Network) provider and are therefore failing to reap the benefits from outsourcing the management of EDI.
This was a finding of a survey of companies conducted recently by leading EDI company, Data Interchange. It also found that 30% of respondents had multiple direct connections to VAN providers, while almost 40% of companies had a single, direct connection to a VAN provider.
"Outsourcing management of the EDI process to a VAN frees a company to concentrate on its core competence," said Colin Fisher, Head of UK Sales at Data Interchange. "IT departments can become bogged down by managing EDI in-house – on-boarding new partners or disconnecting others – and all while trying to keep pace with technology changes and updates, which can mean companies get left with out-dated systems. This survey indicates there is a hefty proportion of companies that can benefit from outsourcing."
The number of businesses with multiple direct connections, revealed through the survey, indicates a shift to a more competitive market, according to Fisher. He said: "The landscape is becoming far more complex. It is changing from the historical structure of each Tier 1 company supplying one OEM only, with subsequent constraints down the supply chain. Suppliers are now supplying multiple customers, through complex supply chain networks rather than direct chains. Such complexity is best managed by a specialised EDI partner."
Choosing a EDI partner or a value added network (VAN) provider is similar to selecting a web portal, in that the customer may point a company in the direction of their chosen provider. "Companies may be using multiple VANs because their customers suggested they should. But this is not a requirement and may not be the most beneficial route for the supplier," said Fisher. "Data Interchange has interconnects already in place to deal with multiple preferred VANs, so traffic can be consolidated and economies of scale realised. A simple answer to a complex problem."
Surprisingly for 2016, the survey found that when businesses were not using their EDI capability, they turn to emails and customer web portals in the main, closely followed by fax. Fisher commented: "Over time, a company's processes and supporting technology can become sclerotic and often the comfort of familiarity can mask underlying issues. Our job at Data Interchange is to show the ROI that can be achieved by supporting companies to review their processes."