EDI is a system that allows interconnection between many organizations. Typically these are organizations that have and require connections between each other. This can be for purchasing items from a supplier, or services from a vendor. There are also situations where your organization is the vendor/supplier to a customer and that customer uses EDI. There are several reasons to using an EDI service bureau, here are the three primary ones to consider:
This is the main reason for even consider deploying EDI. Only the largest organizations build their own systems, but even if you don’t it is still a big undertaking. After long analysis and EDI mapping, only then will you start to see the cost benefits. But picture the difference between, faxing and then posting the purchase orders to a supplier, and then waiting for official acknowledgment. Now imagine that happening as quickly as sending an email.
Another reason to go with EDI is that it almost completely removes the possibility of human error. There are some systems that will still need someone to enter data or order information, however those will be far less than they are now. Some companies would even set up automatic ordering based on reorder levels, bypassing human involvement completely.
Analogous to the above, the improve accuracy also improves speed. Even if a human operator enters the order, once discovered the error can be fixed quickly. But in general, transactions that took days or even weeks can be now executed in seconds.