From invoices to purchase orders, shipping forms to contracts, businesses exchange documents every day—traditionally through physical mail or email attachments. But when each of those documents is processed and sent manually, you risk wasting time and creating new opportunities for errors.

Electronic data interchange (EDI) makes the entire process more efficient, centrally managing business-to-business (B2B) transactions by processing and sharing documents digitally between businesses. In doing so, it improves data accuracy and streamlines your operations as a whole. This makes EDI technology a critical tool. But how do you choose the right EDI technology? 

Calculating your costs and benefits is an important first step to finding the best EDI solution for your business. Let’s take a look at what that involves.

EDI investment considerations

Is EDI worth the cost of the investment? To get an answer, it’s important to consider both direct and indirect costs. For instance, consider software and hardware acquisition, management and maintenance, training and customer support. But also look at hidden costs that aren’t as apparent from the start—such as the costs associated with choosing an inefficient or ineffective tool.

Once you have your costs figured out, consider the benefits an EDI offers—including the potential cost savings and any new efficiencies and productivity gains expected from the purchase. As you compare, you’ll begin to better understand the technology’s ultimate value—and can decide whether EDI is worth the investment. 

Let’s explore those considerations and see how they apply as you gauge EDI’s ultimate value to your organization.

Direct costs of EDI implementation

Your direct costs will likely be the most clear as you begin to assess your initial purchase. They include software costs like licensing/subscription fees, transaction fees, overage charges, and so on. 

To fully get a handle on your direct costs, though, look beyond the price list to consider what your business needs to thrive. Compare fixed-price subscriptions with trade volume-based pricing models, for instance, to see which pricing model best suits your organization. And if they’re not already included in the initial price, consider the cost of connectors or customizations that will make the technology work within your business environment. Only then can you get a full handle on your direct costs.

Indirect costs associated with EDI 

Indirect costs extend past your initial purchase. For instance, they include the costs associated with training staff and implementation, but also the expenses associated with ongoing management and maintenance—including monitoring, regular updates, patches, and troubleshooting. 

Unlike many of your initial costs, these will be ongoing and extend over the lifespan of your usage. With that in mind, consider a three-year cost outlook, evaluating how much your first-year costs compare to those of the years to follow, once the solution is up and running. Also, remember to include any costs associated with scaling your solution and monitoring performance. 

The drawbacks of an inefficient EDI

It’s also important to understand the hidden costs associated with choosing a solution that doesn’t quite meet your needs. These costs can add up, as you employ workarounds and additional resources to make up for the inefficiencies. Some may include:

• Non-compliance with trading partner requirements and EDI chargebacks: Many trading partners have strict EDI requirements for document formatting, processing times, and accuracy. An inefficient EDI solution may fail to meet these standards, leading to costly chargebacks and penalties. These non-compliance issues not only strain relationships with key partners, they can also diminish your profitability, especially when penalties accumulate over time.
• Increased operational costs: An inefficient EDI system often requires manual intervention to correct errors or process transactions, leading to additional labor costs. Over time, these inefficiencies add up, reducing the overall return on investment (ROI) of the solution.
• Decreased scalability: As your business grows, an inefficient EDI system may struggle to handle increased transaction volumes. This can result in bottlenecks, slower processing times, and ultimately hinder your ability to scale operations smoothly.
• Missed opportunities for automation: One of the key advantages of EDI is the ability to automate workflows, but an inefficient system may require frequent adjustments or workarounds. This limits your ability to fully automate processes, leaving room for human error and missed productivity gains.

Too many costs can begin to outweigh the benefits—and potential savings—an EDI solution offers, putting your overall ROI at risk.

Long-term benefits of efficient EDI

With the right EDI platform, the long-term benefits you expect to gain from your investment will outweigh the costs, empowering your organization with advantages like:

• Increased operational efficiency and reduced processing times
• Better data accuracy and enhanced business relationships
• Competitive advantage and better scalability of B2B operations
• Improved compliance with data privacy regulations

Through these advantages, EDI technology frees up resources and budget, aids in customer retention, and saves employee time. All of which helps solidify your return on investment, making the purchase more than worth the cost. 

Maximize your ROI with B2B Manager

As you assess EDI solutions and determine the best technology for your business needs, all of the considerations above are an important part of the process. They help you understand the true costs of buying the technology—and allow you to more effectively determine how they measure up to the benefits you’ll achieve.

With no hidden costs and a transparent, predictable pricing model, Celigo’s self-service EDI solution, B2B Manager, helps businesses achieve lower total cost of ownership compared to traditional EDI providers—with additional cost savings through streamlined trading partner integration, simplified day-to-day management, and reduced EDI chargebacks. All while empowering organizations to work without extensive IT resources and with fully automated B2B trading.

In doing so, B2B Manager ensures the benefits outweigh the costs—giving you a competitive advantage that helps you come out ahead. 

To dive deeper into what B2B Manager could do for you, request a demo today.