Finding the right provider for your data interchange
13 Dec 2017
It’s one thing to know you need to have the right electronic data interchange provider, quite another to find one. Stefan Köhler provides some guidance.
Until recently, most organisations venturing into Electronic Data Interchange (EDI) didn’t have to think too much about their choice of vendor as these were typically imposed along with standards and technology as a condition of doing business.
Now, EDI is widely available in a competitive marketplace as a managed or ‘pay as you go’ service, requiring relatively little commitment.
You are aiming to grow the business, you need to find out how good your service provider is at on-boarding new links in the chain
Problems, though, associated with some of the old style VAN (value added network) providers – complacency, service degradation, increased prices, and often quite insanely complex charging mechanisms – have discouraged many.
Yet the accelerating pace of commerce and volumes of data mean that EDI is no longer optional. So what should a firm be looking for to ensure a successful, long-term relationship with an EDI service provider?
Pricing and charging: Costs should be transparent, predictable and have a straight line relationship to usage volumes – no sudden uplifts or surcharges for exceeding agreed volume limits, no on-going charge by the number of partner connections (some of which may be rarely used). And if traffic falls for some reason, costs should reduce.
Service: There are no published independent sources on service performance and reliability, but a vendor should be prepared to offer statistics that are confirmed by existing users. The web portal should offer easy ways of verifying that data is being sent and received.
Resilience against the unexpected: Fear of criminal or state-sponsored hacking or denial of service is very real, plus any IT-based system is vulnerable to communications breakdowns, fire, flood and other catastrophes.
What security features does the vendor offer?
What is the back-up provision for servers etc and where are these located?
Is back-up mirrored and continuous – or could hours/days of data be lost?
How do system and data restore procedures work? In what timescale? Has anyone actually tested these?
Who actually owns the servers and storage, what priority does your vendor have if things go wrong?
Is help and assistance available 24/7, do support teams have deep technical and business understanding?
Future-proofing: Neither your business nor EDI is static. You are aiming to grow the business, so there will be ever more potential EDI partners. You need to find out how good your service provider is at on-boarding new links in the chain. This isn’t just a technical or cost issue – especially with smaller partners, there is a need to sell the concept and advantages of EDI. A good service provider may be in a better position to do this than you.
EDI standards are continuing to develop and ‘open standards’ are gaining traction, while older ones continually evolve to reflect changing business needs and to optimise themselves to the new technologies. So it is important to understand a vendor’s commitment to and investment in keeping at least abreast, if not leading, these changes.
Of course, none of the questions asked above obviate the need for ordinary due diligence. Look at the ownership, the capitalisation – might they disappear in hard times? The accounts may show their commitment to continuing technical support and development.
Standard stuff, but it is still the core of any procurement decision.
Stefan Köhler is sales director at Data Interchange