A frequently asked question about Dynamics is, why is there no EDI Module like many legacy ERP systems such as SAP and others? Did you know that Dynamics did, at one time, have an EDI module? This blog explores the reasoning behind Microsoft’s approach to EDI and how it can surpass every ERP system with an embedded approach.
Dynamics 365’s origins were in a product developed by Damgaard in Copenhagen, Denmark. It was called Axapta and subsequently renamed by Microsoft to Dynamics AX. In versions 2.5 and 3.0 a module developed for the North American market handled EDI integrations for outbound ship notices, outbound invoices, outbound purchase orders, inbound purchase orders and inbound invoices. At the time it was considered to have reasonable capabilities for a mid-market ERP system. In 2006, the EDI Module was deprecated in Axapta 4.0 with the introduction of the Application Integration Framework (AIF), which could connect more of the system to external partners and interfaces.
The difference between the two integration options was considerable. The EDI module, which would be familiar to many ERP implementers and users had expected capabilities such as the ability to identify which customers or vendors had EDI requirements, import routines for translated data via files in a comma separated value (CSV) format, trigger points for outputting transactional data, screens for import and error correction and more. The AIF did not have these facilities and many developers created custom solutions built around AIF or simply created completely custom embedded systems – leaving companies with custom systems that inhibited adoption of new Dynamics AX versions.
Let’s go back to the original question, why not create (or re-create) an internal EDI module like some of the legacy ERP platforms? In short, embedded EDI systems are poorly suited (inflexible) to today’s rapidly changing business and technology landscape. Microsoft recognized this reality and removed the EDI Module from Axapta in 2006.
What makes an embedded Dynamics EDI module undesirable? Modern ERP systems like Dynamics 365 are amazingly flexible and able to accommodate a business' evolving business model. One example of its flexibility is the many ways Dynamics 365 allows users to receive, transfer and to ship/transport inventory (at least 10 different native options within Dynamics). When you attempt to connect all these options with common business requirements such as integrating external warehouse systems, managing offshore sourcing programs, dropship management or integrating third-party logistics providers (3PL’s) embedded code becomes unwieldy and often requires further customization. Creating complex embedded code to accommodate hundreds of scenarios drives ERP complexity and rigidity. Rigid ERP systems limit a business’ ability to innovate and implementations become business process change exercises to force the business to conform to the ERP system!
Another flaw in an embedded approach is the need to add partner-specific business rules into the core ERP system. Many companies that may want to conduct business electronically with your organization represent a wide spectrum of readiness and capabilities. Some are sophisticated with very specific rules that differ from organization to organization. Other companies have limited systems and send data with errors and incomplete data sets that require advanced capabilities to resolve into accurate business transactions without human intervention. Creating these capabilities in an ERP system is a task without end.
Modern ERP systems deserve a modern approach to connecting to partners and external systems. A smart platform that can adapt to any ERP endpoint quickly and externalize partner-specific business rules and logic that requires no embedded code in the ERP, is the future state of EDI and something Data Masons has been working on for many years. Microsoft has developed a truly robust integration framework in Dynamics 365 that facilitates connections to partners and many useful interfaces. An intelligent platform can enable enterprises to quickly onboard new partners and relationships without customizations or consuming valuable IT resources.
To learn how to digitally transform your organization with Data Masons EDI, request a call with us today.