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Data Masons Blog

3 min read

The Three P’s of Microsoft Dynamics EDI (and “Paper” Isn’t One of Them)

February 25, 2011 @ 3:02 AM

After dedicating a career to documents, from paper-based, to fax-based, and now EDI, you can say that I’m pretty passionate about how paper-based processes impact organizations using Microsoft Dynamics. For me, a good day at work means helping yet another company reap the benefits of Dynamics EDI while saying goodbye to their error-prone paper shuffling.

I’d like to think you’re already using, or evaluating, a Microsoft Dynamics ERP solution such as AX, GP or NAV and that you’re also looking at ways to improve the ROI on your investment. I would suggest starting with your business document processing, both outbound and inbound, as they hold numerous opportunities for improvement. For starters, analyzing how you handle purchase orders, invoices or bills of lading and also your customers’ expectations as to how you acknowledge document transmissions. And of course, the earlier you review these processes, the quicker you’ll start accelerating your ROI.

If you use paper throughout these processes, there’s nothing to say that you can’t continue. But for some of you, you don’t have the option of using paper because your customer mandates that you communicate documents via EDI. Like many people in this situation you might think “where do I start?”, “I don’t understand EDI,” or “EDI is overwhelming as getting it wrong is so costly.” So to put you at ease, I present the 3 P’s – Potential, Performance and Precision - to consider when it comes to EDI integration to Microsoft Dynamics.

EDI simply saves organizations money and supports green initiatives. By providing an alternative solution to communicating information that is normally transmitted by paper, you have the potential to reduce the costs associated with manual intervention and reduce the likelihood of errors, which also can be even more costly.

According to the 2008 Aberdeen report "A Comparison of Supplier Enablement around the World", only 34% of purchase orders are transmitted electronically in North America. They also report that the average paper requisition to order costs a company $37.45 in North America. With an EDI requisition to order costs are reduced to $23.83 in North America.”

While the cost savings are measurable, so is the environmental impact of decreasing the reliance on paper-based processing. Paper is one of the largest consumables in the trading partner network and so by transitioning from manual processes to an automated, fully-integrated EDI solution, you can feel good about your corporate citizenship and your role in promoting a healthier environment.

The fact is that paper-based systems can only be improved so much from a speed aspect, even if you have opted to include a third-party document process automation solution. The challenge with these solutions is that you most likely still need to have user involvement at some point in the process. However, EDI solutions with automated process scheduling capabilities improve overall performance dramatically as they eliminate user intervention, resulting in lower risk processes and accelerated response rates when managing customer relationships.

Paper-based systems can also impede on achieving lean objectives, such as reduced cycle times and the elimination of non-value add processes. An automated EDI solution can support your specific lean manufacturing and cost reduction programs.

In today’s competitive market place, performance considerations should be key when deciding on moving to/adding EDI capabilities as in some cases, it might be one of the only ways to gain a competitive edge.

Precision focuses on the increased accuracy that EDI delivers over traditional paper document exchanges. As businesses push to improve input speeds, paper-based processes give way for greater risk of errors. With the right EDI solution fully-integrated and automated, not only can you control the potential risks for errors, but you can also benefit from features such as automatic email alerts when errors arise.

Together the precision and performance of Dynamics EDI integration delivers improved customer satisfaction, reduced errors and decreased costs associated with expediting goods, or even services that are late or maybe lost.

Overall EDI shouldn’t be put on the back burner as it can dramatically increase speed and improve accuracy of critical business transactions. And with the availability of audit trails and/or electronic logs of all the document activity between you and your trading partners, integrated EDI helps you measure and track processes from start to finish.

So while I may be passionate about paper, the true passion is eliminating the burdens that paper can bestow on your organization and helping you realize the benefits of maximizing EDI opportunities with Dynamics.

Written by Marketing