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The Ultimate Guide to Electronic Data Interchange (EDI)

3pl edi integration

Electronic Data Interchange (EDI) is an essential component to radically improve your ecommerce transaction process for B2B communications. Learn more about the wealth of benefits that come from EDI integration software and why it’s the best way to improve your online business. 

What is EDI Integration?

EDI (Electronic Data Interchange) is the computer-to-computer exchange that allows a company to send and receive electronic information between trading partners and eliminates the need for manual or paper-based communication. EDI simplifies sending electronic business documents, and an EDI-integrated system saves businesses money, decreases errors, and improves partner communications through faster processing. 

What Does EDI Compliant Mean?

Businesses must follow the requirements set by their trading partners to begin EDI operations and meet compliance. Every industry is unique, and each vendor will enlist their own set of compliance requirements to safely transfer critical business information with their partners. 

Once your business is EDI compliant with your vendor, you can synchronize your data and supply chain operations. Consult with your trading partner to learn how you can become compliant to leverage the stunning EDI capabilities at your disposal. 

What is API and EDI Integration?

Application Programming Interface (API) serves as a messenger to process data interactions between devices and programs. APIs allow companies to add codes to applications to enable connectivity and functionality to sell products and services online.

EDI and APIs transfer data and information for internal systems, and choosing which to implement depends on your backend ecosystem. However, both are complementary and can work in unison to enhance your ecommerce operations. For instance, businesses can use APIs to check pricing or locate catalog inventory on an ecommerce platform and EDIs for order and fulfillment. 

3PL EDI Integration and Benefits

EDI is essential to create dynamic and effective 3pl ecommerce fulfillment. Businesses can quickly scale operations by automating order processing and inventory management using EDI. Nogin’s platform uses a proprietary 3PL EDI integration for partners to improve supply chain predictability and improve internal workflows to save time and resources. 

Some of the benefits of 3PL EDI integration include: 

  • Remove slow manual data entry and human error to improve operational efficiency.
  • Communication automation to save staff time and streamline transactions. 
  • Accurate forecasting from EDI documentation and data to improve labor efficiency and guide business decisions.
  • Predictable margins to better monetize services and customer satisfaction.
  • Free up internal resources to spend less time on menial tasks and focus on business growth. 

What is EDI Technology and What Does It Do?

EDI technology is the most convenient, efficient, and secure method to transfer and exchange digital messages between computer networks. EDI is required for many healthcare organizations, universities, and other entities that need the safest forms of information exchange. However, it is quickly becoming the standard for retail brands and ecommerce businesses to implement on their sites to maintain compliant and protected communications. 

EDI technology allows businesses to use private communication channels to exchange information strictly formatted and requires no human intervention. Eliminating the need for manual oversight is more efficient because companies can automate communications. 

For instance, an ecommerce company can communicate with their shipment companies the status of shipments and destination, package weight, dimensions, quantity, and other pertinent information without needing employee supervision. It not only saves costs of labor but will help make your business operations faster and more secure. 

EDI Software Integration: Advantages and Why You Need It

EDI software integration will facilitate automated data transfer and EDI functionality to improve your ecommerce business. Your EDI software will incorporate translation, mapping, and communication capabilities to securely automate back-end symptom processes.

Some of the advantages of EDI software integration include:

  • EDI mapping converts messages into suitable file formatting applicable to IT, CRM, ERP, and logistic systems. Mapping and translation processes will automatically render EDI documents to appropriate formats, such as CSV, XML, and flat files. 
  • Secure file transfer of EDI documents using complaint organizational protocol. Managed file transfer (MFT) capabilities enhance and simplify file exchange with recipient confirmation, including with more than one business partner. 
  • Backend integration with existing databases and CRMs using API architecture to save money on potentially costly EDI implementation.

Future EDI Integration Trends

The new coronavirus ecommerce environment has shifted consumers to rely heavily on online storefronts. Businesses must focus more on their online storefronts and allocate resources to improve their ecommerce marketing funnel, product listing strategies, and retail pricing strategies to maintain market share and capitalize on consumer trends. 

There are many ecommerce myths, but one this is for sure: businesses that provide the most accessible and fulfilling shopping experience online will continue to grow, and the ones that fail to adapt to future trends will fall. Investing in the best ecommerce software and enterprise ecommerce solutions will help ensure your business thrives. 

EDI has existed for decades and is an integral part of B2B communications. Some of the top EDI trends to watch in the future include:

  • Changes in EDI payment structure and large companies bringing EDI processing in-house. 
  • IT shortages will have businesses rely on partners to facilitate EDI operations to save money and resources. 
  • The further expansion of companies to export and sell goods on a global scale will increase the need for business collaboration using EDI. 
  • Further adoption of cloud-based systems to scale resources and meet buyer demands. 
  • A shift towards omnichannel capabilities to store and ship products and allow businesses to leverage multiple distribution points efficiently. 

Supercharge Your Ecommerce and Compete Online Using Your Nogin

Learn more about the Nogin Intelligent Suite to improve your ecommerce business from all fronts. Our enterprise-class technology provides the flexibility and insights your business needs to maximize your marketing and operational efforts. We help our partners increase conversions, improve retention, leverage predictive analytics, and more to ensure your processes are efficient and your profits are maximized. 

Get in touch with one of our Nogin Nerds to learn how to catapult your business to the next level.

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