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What is EDI?



EDI or Electronic Data Interchange is the term commonly used to describe the transfer of digital data from one ERP (accounting) solution to another. EDI is actually a decades old term which related to a strict format and protocol for sending digital data. The business world has become a lot more digital since EDI was first introduced, however most EDI solutions have not advanced that much. 

Traditionally EDI was reserved for the largest organisations. Think huge companies like Foodstuffs, or Progressive supermarkets. These companies usually have an EDI policy where any suppliers must connect digitally to their network in order to supply their supermarkets. This can make interacting with these large organisations very expensive and difficult. In fact most organisations, if they do have any EDI connections, have only set them up for their largest customers or suppliers. This means that whilst some of their processes are digital, most are still manual. This difference in how sales orders, or invoices are received can create many inefficiencies in a business. 

Whilst the difficulty of setting up EDI can be prohibitive to most organisations; the benefits of EDI/digital exchange can be huge. These include: 

  • A reduction in supply chain costs 
  • Getting your product to market faster 
  • Retention of a higher percentage of your profit by having in place a more efficient process
  • Reduction of errors caused by manual data entry

Now imagine if you could gain all of these benefits in your own organisation and many more. 

DX2 digital exchange is EDI re-imagined. DX2 can be used as an EDI solution but its also so much more. 

Key differences between DX2 digital exchange and other EDI providers

The number one key difference between DX2 and other solutions is that:

DX2 digital document exchange can be used for several processes (EDI, Epaper, PDF, manual entry), for any document type (invoices, sales orders, purchase orders, ASNs, freight notifications), for any document format (xml, cxml, pdf, ubl).

Here are some more key differences you should think about when making a decision on what solution to choose for your organisation.

Standard EDI solutions

DX2 Digital Document Exchange

Because of the expense, it's common to set up EDI connections for only your largest suppliers or customers. This leads to some processes being digital while others still handled manually.

Able to use DX2 for largest and smallest suppliers and customers due to several ways to receive and convert files and documents.

Several tools required to complete several tasks in a process.

One integrated digital exchange solution to input the document or digitally capture the document; or receive the document file; then send it on to a digital approval, then collaborate on the document, then analyse the data.

Connections with trading partners are expensive to setup and maintain

Simplified setup process, trading partners can participate and take responsibility for their part.

Every time a supplier or customer needs to change something in their process, it is expensive to change

DX2 enables suppliers and/or customers to make changes to their files themselves cutting down on work for your team.

Errors can be difficult to self-diagnose and rectify.

DX2 includes a digital courier which allows your team to keep track on where documents are in the process, gives you the ability to self-diagnose errors and resubmit documents.

Email conversations about errors in invoicing or purchasing mean the messages are not held alongside the document, are difficult to search for and can be lost.

Conversations can be held right alongside the purchase order, sales order or invoice and are easily retrievable.

Difficult to access from outside an organisation’s firewall

DX2 is cloud based and mobile – it works for distributed teams and organisations.

Limited life span

DX2 can be used for just a few of your processes /connections now, but is also ready to turn more of your processes digital as your organisation needs to.

Standard procurement solutions

DX2 digital document exchange as a procurement solution

Do not have collaboration functionality

Conversations can be held right alongside the purchase order, sales order or invoice and are easily retrievable.

If integrated as part of your ERP solution are only accessible by Finance users  

DX2 sits outside the ERP solution meaning that both your finance and your operational users can access.

If external to your ERP solution, is often based on per user pricing making it expensive to give access to all your finance and operational users

DX2 pricing is based on transactions not users. You can have as many users as you need.

Require several tools to complete an end to end process i.e. a separate OCR solution, then a separate Approvals solution, a separate PO solution

DX2 is an integrated digital document exchange solution that includes modules for digital capture (OCR), manual invoice entry, EDI, purchase orders and spend management, approvals and analysis/reporting.

Poor usability leads to poor user adoption

User friendly user interface that staff enjoy using which improves user adoption.

Poor approval chain

Flexible approval chains to several use cases and cope with parallel and sequential approvals and different approval levels.

Only deal with procurement documents such as invoices and purchase orders

Can deal with any document on either the purchasing, or the sales side.

Standard customer/sales portals /sales processes

DX2 can be used as a sales solution

Not connected to your ERP solution

Can connect to any ERP solution.

Can not receive orders digitally

DX2 can receive all your sales orders digitally and send to your ERP solution.

Can’t handle catalogues

DX2 can connect to your catalogue.

No personalisation

Highly personable, utilises previous customer data to offer targeted product suggestions.

Difficult and slow to make changes and configure

Deep level of configuration so owner organisations can make all the changes they need themselves. Enables you to keep up with sales promotions and other changes in sales strategies.

Slow responses to invoices leads to slow cash to bank process

DX2’s collaboration functionality enables your customers to communicate with your team right alongside the relevant invoice meaning errors, queries can be dealt with quickly speeding up the approval process on the customer side.

Read more about the evolution and future of EDI in this article by our Manager Director, Joe McLeod. 

To find out more about how PGW Wrightson uses DX2 to send digital invoices to Dairy Holdings Limited, NZ's largest dairy farming company then read more at: PGW Wrightson and Dairy Holdings Ltd set up digital delivery of invoices saving time and money.

If you're like to talk to us about your project, and how you'd like to make more of your business processes digital, please get in touch