A lot has changed for business operations over the last few years with technology emerging as the game-changer. The switch from paper-based systems to electronic data interchange (EDI) is one of the key transitions. While EDI costs much less than its paper-based equivalent, there are many other reasons businesses are moving over. The manual exchange of paper-based documents such as invoices, purchase orders, and receipts is cumbersome and error-prone. Further, human input is needed beyond data entry to the document transmission stage. But going digital can address these challenges.
It is easy to imagine the value of an EDI solution to make things simpler, easier, and cost-effective for businesses. They offer a combination of document standardization and digital transmission of information. While these solutions work well for all kinds of enterprises, they are a tad more valuable for e-commerce businesses. The paperwork and vendor networks in the domain are extensive, so going digital with document transfer is perhaps the most sensible thing to do. Let us explain the reasons that make EDI a worthy investment for e-commerce sellers.
Supports the omnichannel approach
When it comes to running an e-commerce business successfully, an omnichannel approach can set you apart. Consumers prefer brands that cover diverse selling channels, which is the reason it is a growing trend. Retailers are taking a cue and going the extra mile to respond to these expectations. It requires adding new sales channels to get out in front of consumers. It can be challenging because sales channels are often siloed from one another. But a lack of communication and coordination between sales channels can get risky for businesses.
For example, you may sell the products in the stocks through one channel and accept orders through another when there are visibility gaps. It means you will have to cancel or delay orders and even face customers’ wrath. As your e-commerce business grows and you add new selling channels, an omnichannel approach becomes essential. EDI takes you a step ahead with an omnichannel fulfillment and retail strategy that integrates multiple sales channels seamlessly.
Empowers the business with accurate and consistent data
When systems and sales channels are not in tandem, you have to rely on manual data entry and processes. These operate across the organization, and there is always a risk of manual errors in processes. Things can get even more complex when documents have to be transferred between departments and externally. Human errors can easily be compounded across the business, impeding its long-term growth.
Even if you can sideline human errors, the sheer volume of data can get overwhelming to handle for e-commerce enterprises. You may end up messing data and making wrong inventory forecasting decisions in the end. These decisions can translate into process errors and flawed results, steering the business in the wrong direction. EDI removes gaps between systems and processes, such as ERP, IMS, and accounting software to help with better forecasting and decision-making.
Facilitates tighter inventory management and control
Stock surpluses and shortages are a common concern for e-commerce companies. But they are more likely to happen when forecasts and decisions are driven by inaccurate, incomplete, and inconsistent data. You can address these concerns by adopting edi services for inventory automation. It helps you see the big picture and make better inventory, category, and assortment choices. Further, it facilitates inventory visibility that curbs the possibility of surpluses and shortages.
You can see where the e-commerce inventory is right now and when it may move to the next destination. Retailers can even stay updated on the suppliers’ inventory to keep goods flowing smoothly. It is far better than the manual steps of inventory replenishment. There is hardly a chance that you fail to submit a purchase order or send the same purchase order twice. EDI ensures that replenishment orders are placed only after inventory reaches a specific threshold.
Enables better management of finite resources
As your business matures, it needs more resources, such as staff, inventory, space, and systems. If you fail to align the resource availability, your company may lose on the speed of development. For instance, an unexpected sales spike can cause inventory depletion, late shipments, and fulfillment delays. Such situations can have a ripple effect of unhappy customers and strained trading partner relationships. They can also pressurize processes such as hiring, data entry, and warehousing logistics.
EDI adds agility and scalability to the existing resources. You have better control over inventory and warehousing. The elimination of data entry tasks reduces the workload on the employees, and they can shift their attention to business-critical tasks. It is vital in the competitive e-commerce landscape where the smallest innovation can be a game-changer for the business.
Makes your company a valuable business partner
E-commerce businesses cannot operate in a vacuum. Matching consumer expectations requires close collaboration with vendors, suppliers, distributors, shipping partners, and more. Legacy systems and outdated processes can be a major hindrance in this context. Big brands and retailers will not work with businesses that do not have an EDI, making it a must-have for e-commerce sellers of all sizes.
The relevance of EDI extends beyond improved efficiency, accuracy, and automation for your business internally. EDI compliance helps with the retention of current trading partners while opening new opportunities for your business. Moreover, it can streamline the onboarding process for new partners and accelerate time to value with business partners. A robust network goes a long way in strengthening the core of your business operations.
The benefits of digital documentation are immense for any e-commerce business. They keep your business on the growth route with better inventory visibility, sales forecasting, and speedy e-commerce fulfillment. With this, you can stay one step ahead of the evolving consumer shopping habits. It is the most vital aspect of running a successful e-commerce business in the era of tight competition in the industry. EDI adoption is one small step that can open immense opportunities for your e-commerce business, so you must embrace them sooner rather than later.
This is a Sponsored Post – the author has requested this post be shared on Women in Ecommerce – WECAI.org and WE were compensated for sharing.
