April 9th, 2021
You may think that electronic data interchange is too complicated (or expensive) for a small business, which has neither the budget nor the resources for EDI technology. However, there are unique solutions for these companies which enable them to also benefit from the advantages of electronic document exchange. One of these solutions, web EDI, is very interesting because its implementation is fast and the cost very reasonable.
What Is Web EDI?
Web EDI is an electronic data interchange (EDI) system that allows you to manage the creation, transmission, and reception of commercial documents (invoices, orders, etc.) via a web-based portal. All a company needs to start using web EDI is a simple Internet connection and a web browser. This greatly limits the work of installation and technical configuration while at the same time reducing costs.
How Does Web EDI Work?
Nothing could be simpler than web EDI. Users gain access to a secure web portal where they can generate commercial documents by filling in a data entry form. Once the information is entered, the document is automatically converted into an EDI message in the appropriate file format. It is then transmitted to the recipient via a secure Internet protocol, such as FTPS (secure file transfer protocol), HTTPS (secure hypertext transfer protocol), AS2, or other.
Depending on the platform, the user may have access to pre-filled forms to speed up and automate part of the process. But it is important to take into account that web EDI always involves manual processes to some extent and is not fully automated for the invoice sender.
Hub & Spoke Model
Web EDI today is generally based on the so-called hub and spoke model, whereby the primary trading partner (hub) deploys EDI and sets up a supplier (web EDI) portal to be used by the secondary trading partners (spokes). In this way, the hub can receive all documents in their preferred EDI format without requiring their trading partners to invest in an EDI solution of their own.
Web EDI makes it easy for a hub to simplify EDI adoption with all trading partners. This ultimately results in numerous benefits for both sides.
The Advantages of Web EDI for Hubs (Buyers)
As mentioned earlier, the main goal for hubs is to encourage EDI adoption for as many trading partners as possible. The first advantage of web EDI is that onboarding is simple—there’s no need to create individual maps per trading partner. In many cases, onboarding for web EDI can be accomplished entirely online and fully automated.
Another advantage of web EDI is that it allows hubs to centralize more of their commercial document exchanges. This advantage is significant in that it provides the hub with greater supply chain transparency by pulling together massive amounts of EDI data. This data can then be analyzed and is often used to drive strategic business decisions when it comes to optimizing operations.
Since web EDI is easy to implement and adopt, the hub no longer has to deal with paper invoices and unstructured emails. The main benefit here is organization, as it virtually eliminates the chance that the accounting team has to dig through old emails to find a specific invoice a month after it was received because the payment was made incorrectly. By combining traditional EDI with web EDI (and PDF to EDI conversion if necessary), hubs can group all their exchanges on a single system and thus have better control over the procure-to-pay process.
Benefits of Web EDI for Spokes (Suppliers)
The main advantage of web-based EDI communication for small and mid-size suppliers is, of course, the fact that it facilitates access to EDI technology and thus facilitates the order-to-cash process. In addition to the considerable amount of time saved with an electronic exchange—even when a manual-entry web EDI portal is used—EDI also enables secure data exchange between companies. As previously mentioned, web EDI also has the advantage of being economical solution as it does not require any particular technical investment aside from ensuring Internet access.
Since web EDI is a solution offered in service model (SaaS) and, furthermore, accessible through a web-based portal, it is available anytime and anywhere in the world. Additionally, the user does not have to worry about possible updates or technical problems that may occur, because the platform is constantly updated. Therefore, web EDI also guarantees access to a solution that is always up-to-date. Meaning, it will always ensure compliance with the technical conventions of the primary trading partner (hub) as well as legal requirements (local, international, and industry-specific).