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What is EDI 855 Purchase Order Acknowledgment?

This post was updated to reflect current trends and information.

Changing a Purchase Order (PO) is an undesirable business practice because it could lead to delays in delivery. Therefore, using EDI 855 becomes key to efficiently managing the ordering process.

EDI 855 Definition

The EDI 855 Purchase Order Acknowledgment is an EDI document that sellers send to a buyer as a response to an order 850, to confirm or reject the delivery of products.

Like all EDI (Electronic Data Interchange) transactions, EDI 855 is used in business-to-business (B2B) communication. Namely, when two business partners exchange electronically the business information in a pre-defined standardized format over a secure connection (VAN, AS2, sFTP).

EDI 855 is the answer to EDI 850 Purchase Order. In the retail business, these two EDI transaction sets (EDI 850 and EDI 855) are usually implemented together to provide high efficiency in the ordering process and provide more efficient logistics.

EDI ANSI ASC X12 855 Purchase Order Acknowledgment Transaction Set

You may have seen the various names and acronyms of EDI 855 transaction such as: X12 855, 855 EDI, EDI 855 document, 855 acknowledgment, EDI acknowledgment 855, EDI 855 message, EDI 855 transaction, EDI PO Acknowledgment, EDI 855 Ack, 855 PO Ack, Order Acknowledgment and so on… but this should not confuse you, all this means one thing: an EDI transaction formally known as EDI ANSI ASC X12 855 Purchase Order Acknowledgment Transaction Set.

The abbreviations in the formal name of this document mean the following:

  • ASC X12 – Accredited Standards Committee X12 (is a standards organization chartered by the American National Standards Institute, it develops and maintains the X12 standard).
  • ANSI -American National Standards Institute
  • X12 – EDI standard
  • Transaction Set – EDI document
  • 855 – code of the transaction

In EDIFACT (Electronic Data Interchange For Administration, Commerce and Transport) standard which is widely used in Europe, and in international trade, the EDI 855 is referred to as ORDRSP (Order Response) message.

How EDI 855 is Used to Manage Purchase Orders and Improve Efficiency?

Using Purchase Order Acknowledgment the seller informs the buyer whether the purchase order was:

  • accepted
  • rejected, or
  • accepted with changes (it means that changes were made to the accepted EDI 850 Order)

EDI 855 is based on the Purchase Order (EDI 850) and has various functions:

  • Confirms receipt of a Purchase Order (EDI 850).
  • Informs about the seller’s intention to fulfill the entire order without changes.
  • Informs about the refusal to fulfill the order.
  • Inform about errors and inaccuracies for example wrong prices, incorrect product numbers, etc.
  • Informs about change in the PO such as:
  1. article cancellation
  2. schedule change
  3. replace items on the order
  4. changes item quantity
  5. price change

Components of EDI 855 Purchase Order Acknowledgment:

What is 855 made of? EDI 855 is paired with EDI 850 and is formed on its basis. PO Acknowledgment contains the following information:

  • Information from PO 850 (Order numbers, date, product details, etc.)
  • buyer and seller information
  • order confirmation numbers
  • Dates of the planned delivery of goods
  • Scheduled time
  • Delivery address
  • Information about ordered products (barcodes, names, quantities, etc.)

855 Purchase Order Acknowledgment Structure

Typically, the EDI 855 structure consists of the following elements:

  • ISA Interchange Control Header. (Mandatory)
  • GS Functional Group Header. (Mandatory)
  • ST Transaction Set Header. (Mandatory)
  • BAK Beginning Segment for Purchase Order Acknowledgment. (Mandatory)
  • REF Reference Identification. (Optional)
  • PO1 Baseline Item Data. (Optional)
  • ACK Line Item Acknowledgment. (Optional)
  • DTM Date/Time Reference. (Optional)
  • CTT Transaction Totals. (Mandatory)
  • SE Transaction Set Trailer. (Mandatory)
  • GE Functional Group Trailer. (Mandatory)
  • IEA Interchange Control Trailer. (Mandatory)

However, it must be remembered that depending on the requirements of the business, optional elements may arise or be removed from the EDI 855 document.

Difference Between EDI 855 and EDI 997

It is sometimes mistakenly believed that EDI 997 (Functional Acknowledgment) can replace EDI 855. These two EDI messages should not be confused, as they have completely different functions.

EDI 997 is just a notification that Purchase Order (EDI 850) has been delivered and does not contain any validation to the Order. The EDI 855 transaction has many functions and informs the buyer whether his order will be fulfilled, and under which basis.

Why EDI 855 is an Important Link Between EDI 850 and EDI 856

Purchase Order Acknowledgment represents an important part of the order fulfillment. When a retailer receives confirmation of order quantities from EDI 856, restocking issues may occur.

Since the supplier sends the EDI 856 immediately after shipment, the retailer can realize that the order is not fully completed too late, when the goods are in transit.

Thus, he does not have time to order a similar product from the same or other suppliers to replenish the necessary stock on time.

EDI 855 for Retail Suppliers

EDI 855 is not implemented by all companies, although practice shows that this EDI document is one of the most important in retail B2B relationships between seller and buyer.

Therefore most of the major retailers such as Walmart and Costco have listed EDI 855 as mandatory EDI transaction for their suppliers.

Here is a Typical Business Flow Using EDI:

There are many scenarios of EDI workflow in the business relationship between the trading partners, thus many different types of EDI transactions may be involved in this process. All depending on the specifics of the company’s activities or the requirements of the business partner.

Below we will look at the simplest and most common business process in which the 855 is used.

  • Step 1: The buyer sends the Purchase Order (EDI 850) to the supplier.
  • Step 2: To confirm readiness to fulfill the order, the supplier sends the buyer a Purchase Order Acknowledgment (EDI 855).
  • Step 3: As soon as the merchandise is shipped, the vendor sends an EDI 856 Ship Notice (ASN) to the buyer.
  • Step 4: An invoice 810 will follow so to get paid by the buyer.

What are the Benefits of EDI 855?

Summarizing the benefits of using EDI 855 for both trading partners that have already been described in this article, the following points can be highlighted:

  • Simplifies interaction with suppliers and increases work efficiency by reducing routine and inefficient operations (making control calls or writing e-mails to confirm or adjust a Purchase order).
  • Using EDI 855, the supplier can promptly notify the buyer if any of the ordered products are not available.
  • When generating EDI 855, the supplier can automatically book the goods for delivery at his warehouse.
  • The buyer, having quickly received information about the unavailability of some ordered product, can promptly place an order from another supplier.
  • Based on EDI 855, the buyer can predict the state of the inventory.
  • Use PO Acknowledgment can significantly improve Advanced Ship Notice (EDI 856) accuracy.

The Most Widely-Used EDI Document in Retail

As you can see from the above business flow, other important EDI documents are involved in the retails ordering process. The most common EDI Transaction sets are:

EDI for retail
  • EDI 846 Inventory Inquiry
  • EDI 850 Purchase Order
  • EDI 855 Purchase Order Acknowledgment
  • EDI 856 Advanced Ship Notice (ASN)
  • EDI 810 Invoice

How to Exchange EDI 855

There are several ways to exchange EDI messages with your business partner. During our more than 20 years of EDI integration practice, we have many clients who use our fully managed EDI services. So, let’s take a look at how does Fully Managed EDI Service works?

Fully Managed EDI Service to Exchange EDI 855

Our Fully managed EDI Solution allows you to create, send, receive, of EDI documents, as well as automatically integrate them into a company’s software system (ERP, CRM…). Following is a description of incoming and outgoing EDI flows, based on our EDI2XML fully Managed EDI Service

For Incoming EDI documents:

We connect to:

  • the Trading Partner’s mailbox, OR
  • a mailbox on our clients’ platform, OR
  • a mailbox on our EDI2XML platform we provide
  • We collect the incoming EDI message (i.e. 850) from the mailbox
  • We turn the received EDI document(s), into a format agreed upon with the client IT team (i.e. XML, TXT…)
  • We drop the final file into the mailbox, waiting for the client IT team to pick up and automatically process into their own software system, OR,
  • We integrate directly into the client’s ERP system, be it on-premises or in another cloud, using certified connectors of Magic xpi.

For Outgoing EDI documents:

  • We receive necessary files from our client, based on a format agreed upon with his IT team
  • We build the outgoing X12 EDI document (i.e. 855) based on the Trading Partner’s provided X12 format and specifications.
  • We connect to the destination’s mailbox & drop the X12 file(s)

EDI Web Services to Exchange EDI 855

However, not all companies can benefit from Fully Managed EDI Services due to implementation fees and monthly services fees. For small companies that need to use EDI with their business partners, we recommend EDI Web Services. It is a cost-effective solution that allows you to start exchange EDI messages in less than an hour and best of all, you don’t need to have any special EDI knowledge.

This is a much more profitable EDI solution for small companies, with no contract, and pay as you go concept. Moreover, you can get started with a free 15 days trial period! If you want to know more about the EDI web service click here.

Get a free consultation on how to streamline your B2B communication with EDI 855 and other essential EDI documents.

 

Looking for more Info? Download our free informative EDI Guides and Whitepaper here

What is EDI 846 document?

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This post was updated to reflect current trends and information.

What is EDI 846 Document?

One of the most important electronic EDI documents heavily exchanged between trading partners is the 846 X12 document. It is important mainly due to the evolution of the drop-shipping business that saw a great advancement in the last few years, because of eCommerce and online sales.

The EDI 846 document, also known as the Inventory Inquiry/Advice transaction set, is used in Electronic Data Interchange (EDI) to provide inventory information between trading partners in the context of e-commerce. This transaction set is commonly employed in the retail industry to facilitate the exchange of inventory details.

What is EDI 846

This EDI document originates from the paper-based “inventory inquiry and advice”. Basically, it is a notification sent by the manufacturer to the seller, advising about stock status and availability. It can also include pricing information. In other words, this EDI message is to exchange information about stock levels and the availability of goods.

For e-commerce, it is very important to have up-to-date information about the availability of goods. That is why one of the major EDI requirements for Amazon, is the capability of the supplier to transmit an EDI 846 Inventory Inquiry message. This is not only a requirement for Amazon exclusively; Other leading retailers such as Cabela’s, Wal-Mart, Costco … all have the same EDI requirement, to be able to feed their e-commerce platform with quality inventory status information.

The EDI 846 document can be sent to business partners, as many times as necessary. It can be 2-3 times a week, up to several times a day; each retailer has his own requirements. EDI 846 Inventory Inquiry/Advice permits suppliers to provide trading partners with information about their products without forcing them to make a purchase. In addition, the EDI 846 transaction is often used to notify business partners about the availability of goods at discounted prices.

EDI 846 Inventory Inquiry and Advice Usage

The other obvious question about 846: who uses this EDI 846 message other than Amazon and the major eCommerce retailers?
The truth is that not only eCommerce retailers can use this EDI transaction and exchange 846 documents. All trading partners can agree to use it to exchange inventory availability and stock level. Some examples:

  • sellers to provide inventory information to a potential customer
  • seller’s representatives to supply the seller with inventory information
  • one seller’s location to give another location inventory information
  • seller to demand the availability of inventory

Diverse Applications of the EDI 846 Transaction Set in Varied Industries and Business Scenarios

The EDI 846 Inventory Inquiry/Advice transaction, has varied usage across different industries and business scenarios. Its primary purpose is to provide detailed information about the current inventory levels of a product at a specific location, typically a warehouse or distribution center. This information is crucial for effective supply chain management and helps trading partners optimize their inventory levels and order fulfillment processes.

Here are some of the varied uses of EDI 846:

  1. Inventory Replenishment: Retailers and suppliers use the EDI 846 to communicate current inventory levels and forecast demand. This helps in making timely decisions regarding inventory replenishment and avoiding stockouts.
  2. Order Planning: The information exchanged through EDI 846 aids in order planning by providing insights into product availability. Retailers can adjust their order quantities based on the actual inventory levels at the supplier’s end.
  3. Demand Forecasting: By analyzing historical inventory data provided through EDI 846, businesses can better forecast future demand for products. This can lead to more accurate production and procurement planning.
  4. Vendor-Managed Inventory (VMI): In VMI arrangements, suppliers use EDI 846 to monitor and manage the inventory levels at their customers’ locations. This collaborative approach helps in maintaining optimal stock levels and reducing carrying costs.
  5. Supply Chain Optimization: The use of EDI 846 contributes to overall supply chain optimization by enhancing communication and collaboration between trading partners. It streamlines the flow of information related to inventory, reducing manual processes and improving efficiency.
  6. E-commerce Integration: In the context of e-commerce, EDI 846 plays a role in updating online product availability and supporting real-time inventory visibility for customers. This is important for online retailers and marketplaces to provide accurate information to customers about product availability.

Overall, the varied usage of EDI 846 reflects its importance in facilitating efficient inventory management, enhancing collaboration between trading partners, and improving the overall supply chain performance.

What Information Does the EDI 846 Document Transmit?

In the EDI 846 transmission, inventory location identification, item, and part description, and quantity are the basic information included in almost any EDI 846 document; however, additional information can be added such as:

  • Quantity forecasted
  • Quantity sold already
  • Quantity available in stock
  • Pricing information
sample-edi-846

With EDI 846 online stores optimize their deliveries. They do not need to enter data manually into their internal systems, such as ERP  or back-office of their stores. It gives an accurate information to online shoppers about the availability of stock, in a real-time mode. Moreover, it does reduce the administration fees and expenses to process orders and items bought by consumers, while having no stock.

What are the Benefits of Using the EDI X12 846 Inventory Inquiry/Advice?

The EDI X12 846 Inventory Inquiry/Advice transaction set provides several benefits for businesses that use it. Here are some of the key benefits:

1. Improved inventory management: The 846 transaction set provides real-time updates on inventory levels and enables businesses to quickly identify inventory shortages or excesses. This helps businesses to optimize their inventory levels, reduce carrying costs, and avoid stockouts.

2. Increased efficiency: The use of EDI eliminates the need for manual data entry and reduces the risk of errors. This can result in faster order processing times, reduced labor costs, and improved accuracy.

3. Enhanced collaboration: The 846 transaction set allows for seamless communication between trading partners and provides a standardized format for inventory information. This makes it easier for businesses to collaborate with their partners and share inventory data consistently and efficiently.

4. Better decision-making: By having access to real-time inventory data, businesses can make better decisions about when to reorder products, how much to order, and where to allocate inventory. This can help businesses to reduce inventory holding costs, improve customer satisfaction, and increase profitability.

5. Competitive advantage: By using the 846 transaction set, businesses can differentiate themselves from their competitors by offering faster, more accurate inventory information to their customers. This can help businesses to attract and retain customers, increase customer loyalty, and gain a competitive edge in the marketplace.

For more information about how edi2xml fully managed services or web service can help you set up your EDI 846 Inventory Inquiry/Advice with your trading partners, please contact us.

Free EDI Consultation EDI 846

Related Posts:

Inventory management and forecast sales using INVRPT, SLSRPT, and SLSFCT
All you need to know about EDI ANSI X12 Transaction Set 850 Purchase Order
How EDI can speed the receiving of goods in a warehouse
What is EDI2XML Managed Services?
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PROs & CONs of Common EDI Translation Methods for SMEs

This post was updated to reflect current trends and information.

An article on our parent site, Namtek Consulting Services, called “Finding the Middle Ground with EDI Software & Services, ” explains the three most common options Small and Medium Enterprises look into when beginning to use EDI to exchange documents with their Trading Partners.

These 3 options consist of:
  1. Building an EDI translation tool from scratch and doing all communication in-house
  2. Going with a large, reputable EDI Vendor to outsource your EDI
  3. Buy an EDI translation tool, targeted solely to developers

Here are the PROs and CONs for each:

1.    Homegrown EDI Software

With this option, your company must have an in-house IT team, with the necessary EDI knowledge and experience to handle EDI capabilities and requirements.

PRO: The IT team is capable of developing their own EDI translation software to integrate within their ERP system for optimal performance. The whole process will be customized to their exact needs.

CON: This process usually ends up being very expensive and time-consuming for everyone involved. On top of it, many SMEs cannot afford to have their own in-house IT department and EDI experts.

2.    Prominent EDI Vendor

PRO: Large vendors help you connect to the retail industry’s largest network of Trading Partners.

CON: These Vendors are not cheap! Get ready to pay high monthly fees and to wait months at a time to hear back from their Support team.

3.    EDI Translators for Developers

PRO: These tools are affordable to buy, consisting only of a low one-time fee.

CON: Because these translation tools are used and maintained by developers, it requires knowledgeable resources in-house and ongoing support within the company to preserve all EDI capabilities. Your in-house team will need to handle all EDI mapping and requirements for each Trading Partner connection. Therefore, the cost to buy the translation tool may be within budget, but it will cost your company time, effort and in-house IT wages to complete the whole EDI project.

The best option? An EDI Fully Managed Service that is: Affordable, handles ALL EDI mapping, and has a great support team. Take a look at EDI2XML!
Free EDI consultation
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Tips to Empower your eCommerce with great Supply Chain through EDI Integration

 

This post was updated to reflect current trends and information.


The term “eCommerce” is generally understood as the process of selling products and services over the Internet. However, there is much more that happens behind the scenes of an eCommerce Store. Business transactions such as electronic data interchange (EDI), supply chain management and funds transferred are all part of this online store, as it involves the exchange of all kinds of business transactions to keep the business running smoothly. In this article, I will dig deeper into these hidden eCommerce business transactions. To learn more about the positive effects an online store has on a company, read this blog written by my colleague.

Supply Chain Management (SCM)

Supply-Chain-Management-SCM

In general business terms, SCM is the management of the flow and movement of finished goods from point A, where goods are produced and stored, to point B, where the goods are consumed (final destination).

There are many elements, parameters and interconnecting networks involved in the process of provision of products and services required by the consumer. The challenge with supply chain management is to synchronize the line of supplies with consumer demand and also be able to measure the performance and success rate.

eCommerce & SCM Challenges

In today’s digital world, more and more businesses are embracing the online trade by building electronic stores and creating a web presence to promote and sell their products and services to a wider range of consumers around the world. Due to the revolution of mobility and Internet connectivity, consumers today are much more Internet savvy and are very capable of browsing and shopping online to quickly find the products or services they want. However, in turn, consumers are becoming impatient and request their bought products to be delivered to them in the shortest amount of time. This has created some challenges for e-retailers, such as the following:

  • How to keep the supply chain line full in order to respond to the growing demands and trends of the consumers
  • How to balance between incoming demands and production, knowing that major production facilities today are overseas and avoid a high level of inventory storage and great “over-stock”
  • How to quickly communicate the right business information and requests between the different systems of multiple business partners involved in the supply chain pipeline?

#1 – Use fully integrated software systems

The first tip in overcoming the above challenges would be to use integrated software systems when running an eCommerce Store. Whether it is a small business or a larger enterprise, having one platform to manage and run your business is very advantageous. I have witnessed many enterprises with over 50% of their business coming in from their eCommerce store and they are still keying in information manually. To be efficient, enterprises should be using integrated software systems to manage their eCommerce and retail business.

#2- Integration & Data Exchange (EDI, XML..)

To be able to balance between the demands of products and services coming in from the eCommerce site and the supply chain demands, the best option is to empower the eCommerce platform with EDI capabilities. This way businesses can exchange data automatically in real-time with suppliers and business partners, in order to keep the supply chain filled.

Most of the time, enterprises are not able to change their “legacy systems” quickly and at a low or affordable cost. This kind of project requires a large budget and a lot of resources. Therefore, unfortunately we still find too many legacy systems based on AS400/DB2 and other platforms that are still in production.

At the same token, modern ERP systems such as JDE and SalesForce lack many built-in features capable of exchanging data such as EDI. They offer the gateways for integration (i.e. API, Web Services…) but they expect the company to invest time and effort on integration and data exchange projects.

Read: EDI, XML or Web Services; what’s Best for eCommerce Integration

#3- Adopt Modern Solutions

In order to be able to exchange data electronically, enterprises should invest in modern, scalable integrated IT solutions that are flexible enough to grow with the business. The ideal integration solution should have the capabilities to parse data of different formats (such as EDI, XML, Json, CSV…), translate EDI from one format to another and it should be powerful enough to interact with different systems and platforms.

In addition, a modern efficient integration solution is the one that offers the flexibility to communicate with different business partners, using various modern communication protocols such as AS2, sFTP, Web services, etc.

Is your eCommerce & Supply Chain out of sync?

We often believe that we are sheltered from these common problems and that our IT systems work fine. After taking the time to analyze your business processes a little more you may begin to see some problems or room for improvement. With my 20+ years of experience on the matter, I have seen it all. Start empowering your eCommerce site with the best tools and processes.

 

 
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Top 3 Challenges to Overcome in Salesforce and EDI Integration Projects

Today’s business environment is full of complex business processes; lead time to deliver, merchandise fulfillment, forecasting and more. On top of these processes, there are constantly new strict regulations imposed on businesses by major retailers, like Amazon, Sears and Wal-Mart. Most often, restrictions are enforced when dealing with data exchange, stock and inventory availability and other compliances.

Top 3 Challenges to Overcome in Salesforce and EDI Integration Projects

Luckily for companies, a diversity of efficient ERP systems, EDI tools and enterprise software applications, such as JDE, Salesforce, SAP, are running businesses of all sizes. Integration between different systems is becoming more than a luxury, it is a necessity. Enterprises of all sizes are making greater efforts to equip their IT systems with the capability to comply with requirements imposed on them by major retailers. One such issue is EDI integration and the ability to exchange and comply with retailer’s requirements. The key is to ensure you have chosen the right technology and the best team to handle the integration projects.

In my previous article, I addressed the major issues related to EDI integration with JDE. In today’s blog, my focus is on EDI integration with Salesforce or any other software CRM application. These projects can be long and costly if not done right, therefore read below to have an efficient, cost effective and solid integration for EDI communication.

What is Salesforce?

Top 3 Challenges to Overcome in Salesforce and EDI Integration Projects 2Salesforce is a cloud-based CRM (Customer Relationship Management) software system. It is very popular amongst enterprises of all sizes as it is best known for its openness for integration. Developers and integrators can read and write data using API and web services. Many companies use Salesforce as a unified tool for leads, campaigns, opportunities and customer tracking.

EDI Integration with Salesforce

Salesforce is simply a CRM system but add-on modules have been developed so users can enter sales orders for clients and confirm processing. However, when it comes down to needing to complete further business processes, which are included in an ERP solution, such as EDI communication, a different approach should be followed. Integrating EDI orders sent by retailers to a CRM user requires further expertise by a team of IT professionals with a solid knowledge of integration and EDI.

Read: Why we love EDI2XML for EDI Integration with JDE (And You Should Too!)

Following are the top 3 challenges that any EDI integration project manager should consider and overcome:

1) The Technology

It is essential in any EDI integration project with Salesforce to be using good technology; that is scalable, flexible and easy to use, with little training necessary. Such technologies exist in the IT marketplace and if properly used, it can be leveraged to save a lot of time, effort and money in the integration process. The ideal tool should be able to interact with XML and Salesforce and all its interfaces (API, SOAP…).

2) EDI via AS2 or VAN

The second issue to consider during an EDI integration project with Salesforce is in regards to the communication protocol to transmit EDI data between you and the retailer. More and more, retailers such as Amazon, Wal-Mart and Sears, are mainly offering AS2 connectivity for suppliers wishing to exchange EDI with them. AS2 is a protocol of secured communication of EDI files from point A to point B. When setup and implemented correctly, this kind of implementation saves a lot of money.

However, most often, companies go with a VAN due to the retailers’ incompliance with AS2. It is difficult to do business with these big players without them enforcing their rule by using the service of EDI VAN to all their suppliers. Therefore, the choice to even go with a third party service provider is not given but it does exist.

3) EDI Translation

The EDI translation and integration into the Salesforce databases is the biggest challenge of all. It truly takes some major evaluation and analysis of the situation before beginning. One major question to consider and ask is whether to do the EDI translation and mapping on-premises or as a service. Of course, it all depends on the company’s budget and the capacity of the company’s IT team and knowledge of EDI communication. Also, another consideration is the type of technology. Nowadays, there are experienced service providers that are capable of taking on the service of:

  1. Receiving EDI transactions from the retailer
  2. Processing the EDI files
  3. Translating the EDI files and integrating it into the company’s Salesforce system

What’s Next?

As you might know, a lot of parameters are involved in EDI integration projects, whether you want to integrate with Salesforce or any other software application. A professional opinion from EDI experts is important and very much needed for any business.

Namtek’s IT & EDI Consultation is free and at your convenience. Do business the right way – contact us today.

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Best EDI Processing Options: Service Bureau VS Translation & Integration Solution

In today’s article, I will be addressing the best option to process EDI data, exchanged between business partners, by identifying the advantages and inconveniences of two methods; an EDI Service Bureau and a Translation/Integration solution.

It’s not a surprise to business people that exchanging business data using EDI protocols and formats has been around for a while and is clearly here to stay. If you’ve stumbled upon this EDI article, then you are perhaps either interested in enhancing your EDI capabilities or looking to implement EDI in your business environment. Either way, it is proof that EDI is still in demand in the business community.

As this is my first time addressing EDI through a Service Bureau in my blogs, I will clearly define and explain what a Service Bureau does and provide my opinion on the topic.

EDI Service Bureau

EDI Service Bureaus have been around for many years. They were created as a third party provider sitting between business partners. How it works is simple. The Service Bureau receives EDI data from one partner to process into a human readable format (on behalf of the destination partner) and then send out to that destined business partner.

How A Service Bureau Processes EDI Data

As mentioned above, upon receiving the EDI data from a VAN or directly from a business partner, a Service Bureau will take that data and process it to generate a format that is agreed upon by the destination partner. The most commonly used formats are:

  • Paper document
  • PDF document
  • Excel format or CSV (Comma Separated Values)
  • Web-based document

Once the EDI data received by the Service Bureau is translated to one of the above formats, the Service Bureau would then transmit the translated document to his client (final destination partner) using one of the following methods:

  • Fax
  • FTP or sFTP
  • E-mail

For outgoing EDI documents, the partner would return the information to the Service Bureau in the same formats as mentioned above (i.e. paper, PDF, Excel or CSV documents). Nowadays, some Service Bureaus provide web-based interfaces for their clients, to manually enter the data in order to generate outgoing EDI files to be sent to their partners.

EDI solution and ERP

How Businesses Process Data Received From Service Bureaus

Depending on which format the Service Bureau translates the EDI data into, the business partner would have to deal with it differently. Here are the possible scenarios for incoming EDI documents:

  • If the data is treated in a web-based format, the business would need to login to the Service Bureau web portal, retrieve the data (orders, invoices, etc.), print or export the document, and then either key it in manually into their own management system or import it from CSV, only if their internal system supports this kind of process.
  • When the EDI converted data is sent as a paper document or PDF (received by either fax or e-mail), the user will then have to key the information received in manually into their system, without question.
  • When the data is received in Excel or CSV format, the user can either key in the data manually or import it into his internal ERP system.

The same concept applies for outgoing EDI documents through Service Bureaus. In all cases, the business has to either key in data in Excel or manage it through a web-based interface provided by the Service Bureau.

Service Bureau Inconveniences

As you may have noticed by now, exchanging EDI via a Service Bureau is not the most efficient way of communicating with business partners (click to tweet). In fact, the likelihood of human errors and inefficiencies are very high. In this day and age, where there are constant improvements in technology, it is extremely inefficient for SMEs to be keying in orders received by EDI (through paper document or PDF) (click to tweet). Even with the web-based alternative that Service Bureaus offer, it is still unproductive to manage multiple systems rather than having one single platform with full EDI capability.

Read: Convert EDI to XML: the Winning SaaS Option

EDI Translation & Integration

Once businesses have switched from using a Service Bureau to implementing an EDI translation and integration solution, they have eliminated all kinds of inefficiencies and human errors and have become much more efficient. The way it works is by having a fully integrated business solution in place that has built-in capability to process incoming and outgoing EDI documents. Refer to my previous article entitled See What It Means To Be Fully Integrated with an Efficient Business Software Solution that expands more on integrated solutions.

However, it is very common for business owners to be hesitant to implement a fully integrated solution into their small business, as they believe all ERP systems are expensive. That is simply not the case anymore, as we are in 2014 and IT solutions have become very affordable. EDI2XML offers affordable EDI integration that fits into the budgets of small and medium sized businesses (click to tweet).

What Is The Best Option: EDI via a Service Bureau or a Translation & Integration method?

As a professional IT consultant and developer, I have helped many small and mid-sized businesses streamline their business processes for over 20 years. I truly believe a fully integrated process and solution would be the best option to go with. Not only is it more efficient for your company as a whole but is also affordable. I have already published my arguments in a previous article entitled EDI integration projects: Advantages and Benefits.

If you are interested to learn more about this topic or any other issue related to IT or EDI, please click on the image below and I will be more than happy to contact you for a FREE consultation.

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Take this QUIZ: Is your business cut out for on-premises EDI software?

This post was updated to reflect current trends and information.

As an EDI expert, I receive many questions related to deployment of the EDI software. “Should our business go with on-premises or “in the cloud”?” As many business executives are not sure which way to go, I have listed a few questions that will make their EDI deployment decision easier.

Below are the right questions to ask yourself in order to make the best decisions for your company when it comes time to implementing EDI software.

Please note: if your major problem is how to integrate EDI with JDE, please refer to my previous blog entitled, ‘How to Solve the Biggest EDI Integration Problems with JDE’.

1. Do we have the proper in-house EDI expertise?

Before making any decision about how to deploy EDI2XML, Namtek’s EDI conversion solution, or any other EDI software internally, one should ask the very basic question: Do we have an IT professional in-house with a basic understanding of EDI? A basic understanding is all an IT expert needs when dealing with EDI2XML on premises.

2. Do we have the expertise to work with XML?

The second question is of course asking whether your internal IT team has the necessary capabilities and expertise to work with XML and its schemas. An IT professional having expertise in XML is much more probable than EDI expertise. However, never assume, as it is always best to confirm this beforehand.

3. Do we have enough time for our IT resources?

Once you realize you have an in-house IT team with the expertise in EDI and XML, you need to evaluate if they have enough time to handle an EDI implementation project. Many executives underestimate the time and effort involved in EDI communication, especially if their IT team is handling other priority projects and tasks. The same question should be asked if the company does not have an in-house team and has hired outside IT consultants for their day-to-day IT needs.

Read: SaaS EDI or On-Premises EDI Translation Software: What you should know

4. Do we have the necessary IT infrastructure?

Another very important factor to consider before deploying EDI translation software on premises is your company’s current IT infrastructure. If your current hardware and infrastructure cannot support an EDI software solution, then it is time to invest, which can of course add more costs to your project’s budget. Nowadays, many business executives do not want to worry about this and have opted for “cloud-based” software services. Adopting SaaS solutions (Software as a Service) does not require any investment in IT hardware and infrastructure.

5. Can my current ERP software handle EDI integration?

Any time there is an integration project within a company, a crucial question to ask is if your current ERP software (if your company even has one) can handle EDI integration, or any add-on software integration. If your company is still running a legacy software system or out-dated software, with no support and maintenance, integration becomes very difficult. The best way to go for any integration project, including EDI, is to begin with an upgradable and scalable management software solution where integration is easy and quick.

Please review my article about the importance of fully integrated software in a business of any size.

Where do we go from here?

If you’ve answered “YES” to all 5 questions above, then your company is suited for an on-premises EDI implementation process. However, if you’ve answered “NO” to at least one of the questions, then it is best to go with an EDI conversion service that does the complex work while your team of IT consultations take care of the integration with your internal software system. If however you do not have an internal IT team, then simply go with an EDI software solution “in the cloud” with full service. At this point, you wouldn’t need any IT infrastructure or in-house IT team as all you would need to do is hire an outside team of EDI experts to implement and handle the EDI communication. Please check out our EDI2XML as a Service for more information on how an EDI solution “in the cloud” works.

If you need further help in determining what the best steps are for your company, I am be happy to offer my team’s long time EDI and systems’ integration expertise for a Free Consultation.

Free EDI consultation

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How to Solve the Biggest EDI integration Problems With JDE

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This post was updated to reflect current trends and information.

EDI integration projects have always been time consuming, as it requires an expert team with EDI knowledge and many resources. No matter how small or large the company is, the previous statement falls true for them all. It is the nature of EDI and all the processes involved that makes an EDI integration project complex and problematic for the developers and executives. In this article, I would like to identify a few of the major problems of EDI integration with JDE (JD Edwards) and how to solve them, in order to have a smooth and successful EDI implementation.

About JDE

JD Edwards, also known as JDE, is an Enterprise Resource Planning (ERP) software that Oracle sells and supports. JDE is offered in two different lines (or editions): JD Edwards EnterpriseOne and JD Edwards World. In most cases, JDE software solutions are implemented and deployed in corporate level enterprises. It is less present in small enterprises since most SMEs cannot afford its maintenance costs.

Why EDI integration with JDE is a problem

Read: EDI Integration with JDE Made Easy with EDI2XML

While JDE is a great corporate level ERP solution, offering lots of tools and connectors for data integration (flat file and other format), it does NOT offer out of-the-box an integrated EDI solution or connector that would make EDI integration seamless. It offers the necessary interfaces to define file formats for export and import, but it stops short on completing the loop into a full EDI solution.
For EDI project integration, JDE heavily relies on third-party “EDI translation software” to send or receive EDI files, and to turn the EDI files into a format (flat file for example) that can be easily interpreted and processed by JDE.

Having said that, you can now imagine how complex and time-consuming integration of EDI in JDE is for a company’s IT personnel and developers. The major problems can be summarized as follows:

  1. IT personnel need to have an extensive EDI expertise; for example, a high knowledge of EDI is needed to be able to define the data to be extracted from the incoming EDI file
  2. They need to learn how the “EDI Translation software” works as well as how and when to extract data and transform it into the proper format for JDE
  3. Of course, they need to know how to work with JDE and setup interfaces and connectors. This one is not of a major concern as IT personnel handling JDE are experienced with this platform

Looking to integrate your EDI or eCommerce processes with Oracle JDE enterprise one, look no further, since we have the best integration option where we turn your Oracle JDE system into a modern REST API, that receives https requests and acts accordingly. LEARN MORE>

How to solve the integration problems

In order to solve problems associated with EDI integration with JDE, it comes down to reducing the number of points identified in the previous section to 2 rather than 3, by capitalizing and building on JDE expertise. So how can this be done in order to have an EDI integration project run smoothly, on budget and on time?

Read: Top 3 Challenges to Overcome in Salesforce and EDI Integration Projects

The answer is simple. Companies running JDE can leverage:

  • EDI2XML : the technology to convert EDI to XML (and XML to EDI)
  • Magic xpi: the business integration platform from Magic Software, that is able to orchestrate the entire business process. It is an “Oracle Validated Integration” solution for both JD Edwards EnterpriseOne and JD Edwards World.

Magic xpi comes with a lot of built-in features to support an EDI project implementation such as:

  • Communication components (FTP,sFTP)
  • Ability to execute scheduled tasks based on several triggers
  • Ability to execute tasks based on file scanning triggers

EDI2XML has complementary features to make an EDI integration project within JDE very simple and straightforward:

  • EDI2XML is able to generate FA 997 out-of-the box for incoming EDI documents
  • EDI2XML turns the EDI files received into readable XML format, so no need for extensive EDI expertise

Therefore, EDI integration projects with JDE don’t have to be so dreadful anymore. The marriage of EDI2XML, Magic xpi and our team’s EDI expertise can definitely benefit your company and make EDI projects easy and under budget.

To read more about using EDI with JD Edwards and the third-party applications, Click here

Free consultation ecommerce JDE integration
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EDI Translation Software “On-premises” or “As a Service”

This post was updated to reflect current trends and information.

As soon as there is a requirement for EDI implementation and integration, company executives, along with their IT personnel, begin by determining how they will comply with their EDI business partner to exchange EDI documents. They will need to acquire EDI translation software, initiate testing, and so on. This however is a complex and lengthy process, which many executives do not look forward to. Difficult questions arise, such as, “Shall we outsource to an EDI service provider? Shall we do it ourselves “on-premises”? Shall we do the translation and conversion of EDI “as a service” using an outside provider?

Which of these options is the best and most affordable way to go?”

Why Do We Need To Translate EDI

As you already know, EDI (Electronic Data Interchange) is the standard to exchange business data between business partners in a very proprietary EDI format. Your business partner would send data such as a P/O (EDI 850), an Inventory Inquiry/Advice (EDI 846), or any other EDI transaction, based on his own terminology of business parameters. It is then up to the “receiving party” to take the sender’s EDI data and information, translate it into a well-understood format, which the receiver’s system will be able to use and process. With EDI2XML, we translate the EDI format of incoming documents to a much simpler, more structured XML format so humans, namely the IT developers, and systems can easily work with.

Translate EDI “On-premises”

Normally, translating incoming EDI documents “on-premises” requires a lot of parameters before launching such a project. As a starting point, a good level of expertise in EDI, EDI communication, and systems integration is required. Integrators should also have a fairly advanced knowledge and expertise in how the company’s software system (ERP, CRM, etc.) works and how to integrate and push data into that system.

While the ability to integrate with the most commonly used ERP and CRM systems does not create any major challenge for experienced IT developers, the main problem is having a high level of proficiency in EDI implementation.

Another major task for the “on-premises” translation is, in most cases, the need for the company to invest on hardware, software licenses, and services (internet, dedicated IP, VAN) to be able to exchange EDI documents with their business partner.

Useful Reading: What are the advantages of using EDI2XML?

Translate EDI “As a Service”

With the emergence of cloud-based IT services and the affordable plans offered by service providers, the ability to translate EDI “as a service” in the “cloud” and deliver the end result to the ultimate destination, has become a more productive approach.

Typically, an EDI service provider offering EDI translation “as a service” will:

– Act as an intermediary layer between the EDI sender and EDI receiver

– Receives the EDI incoming document (i.e. 850, 860, 864,…) on behalf of the “ultimate receiver”

– Extract the data received in EDI format and translate it into a standard format (i.e. XML)

– Transmit the XML data to its ultimate destination for Integration OR integrate directly into the software system of the ultimate receiver.

To send EDI documents out, the EDI service provider will be acting also as an intermediary hub between business partners and do the following:

– Receive data in XML format to be sent to the business partner from the sender through FTP or sFTP

– Translate data received and convert from XML to EDI format

– Transmit that EDI data to the destination

Dive into the world of EDI (Electronic Data Interchange) with our insightful video explanation. Explore the video

Advantages of EDI Translation “As a Service”

With the EDI translation in the cloud offered as a service, companies have a lot of great advantages:

– Quick implementation cycle

– Secured and proven platform to exchange EDI with partners

– No initial investment on hardware or software licenses

– Get up-and-running quickly: your projects are on-time and on-budget

– Use the wealth of expertise your EDI service provider has in EDI

– Let your team of IT professionals focus on integrating XML files into your system rather than learning EDI

– Predictable and static recurring monthly fee for the service

– Possibility to move to “on premises” mode any time

– Ability to integrate to your system directly without your internal IT resources

Discover how you can streamline and simplify your EDI projects with EDI2XML Fully Managed Services

The Best EDI Solution

Most companies usually lean towards the “on-premises” option when they have “internal policies” and security measures in place or are a large enterprise with their own team of IT experts.

The “as a service” option is much more advantageous for small to mid-sized enterprises, where they may have a lower number of exchanged EDI transactions.

As the “as a service” option’s low initial investment and quick deployment are attractive features, every situation is different and should be dealt with on a case-by-case basis with one of our EDI experts prior to making a final decision.

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The Advantages of EDI integration projects

Why use an EDI integration project?

In today’s business world, lots of decision makers are still wondering whether to plunge into EDI integration projects or to hire a couple of new employees to manually enter data received and processed by a third party EDI service bureau.

Which option is much more beneficial for their company and returns the most on their investment?

At a quick glance, hiring data entry clerks might seem appealing for the following reasons:
1) The EDI understanding is still a complex topic to understand by non-technical people;
2) The considerable initial capital investment on integration projects: professional services, EDI consultants, professional services…
3) The ongoing EDI service bureau transactional fees, connectivity fees..
4) The time and effort needed to integrate EDI with their ERP, or Business management software solution, that will be billed by IT consultants, EDI specialists and consultants.

While the above reasons are completely valid, companies stop short from researching about the evolution of the EDI world.

With EDI2XML and its “Software as a Service” model, companies are able to cut over 75% of their EDI integration projects costs and gain efficiency and accuracy within a short amount of time. Just by implementing and using EDI2XML translators, the IT consultant of an SMB, will be able to focus on building the integration between XML data files and the business management software solution in place, since XML is widely used and understood nowadays. EDI2XML is able to generate a readable XML of the EDI file, easily understood by humans and systems. As long as the IT consultant has access to the ERP database structure, he will be able to read the EDI formatted file in XML, and push to the tables, after applying all kinds of business validation. The same applies for outgoing EDI documents. As long as the IT consultant is able to generate an output XML file based on a pre-defined schema, XML2EDI engine will process that file and convert into an EDI file format.

EDI communication protocols are becoming very straightforward today; less complexity and more security. Major retailers and corporations are using AS2 or FTPs secured in order to communicate EDI documents back and forth between business partners. Even better, if a company is not able to handle EDI projects due to lack of budget or expertise, EDI2XML technology is used and empowering erpwizard which is a fully integrated business management software solution offered “as a service” (SAAS) either “on customer premises” or in “the cloud“. Not only is it a fully integrated ERP software solution, but it offers a complete EDI solution.

We have over 15 years in EDI integration in the retail, manufacturing, distribution and healthcare industries. We’ve been very active in Montreal, Canada, where our EDI consultants are experienced at the business level just as much as they are at the technical level.

Read: Free EDI to XML converter: What’s the catch?

Free EDI Demo

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