SaaS EDI: Everything You Need to Know

Integrating SaaS EDI with ERP and your other mission-critical applications is easy, enabling you to move data and documents seamlessly across your business and broader supply chain. This connectedness makes you more agile and easier to do business with than your competitors.

Read this article for everything you need to know about SaaS EDI. And to find out if it’s the right option for you.

What Is EDI?

EDI–Electonic Data Interchange–is a set of standards defining how two companies working together (“trading partners”) should share information.

Back in the day, this “information”–an invoice, purchase order, shipping notification, or healthcare claim–was printed onto paper and sent by mail. When the document arrived (assuming it didn’t go missing along the way!), the recipient manually keyed the information into their internal systems. But this was expensive, inefficient, and unreliable–hence EDI was born.

EDI eliminates the need for such unpredictable, manual processes, saving trading partners vast amounts of time. It defines how data should be formatted, keeping entire industries on the same page. And it automates data flow electronically, guaranteeing safe dispatch and receipt.

The Benefits of EDI

1. Lower costs: You can save money on printing and paper, but the most significant savings are time-based. Employees are liberated from the most time-consuming, laborious tasks to focus on higher-value work.
2. Fewer Errors: Data sent via EDI is never touched by a human hand, which means no fat-fingering and costly downstream consequences.
3. Increased Efficiency: Trading partners can collaborate at breakneck speed when the documents they need to forge ahead are created, sent, and received in seconds instead of hours.
4. Greater Security: Sending documents by mail–or even by email–is insecure. They can be intercepted or fall into the wrong hands. EDI can encrypt data before it’s exchanged, which is why HIPAA, the U.S. Federal health insurance law of 1996, encourages the widespread use of EDI in the healthcare system.
5. Greater Supply Chain Visibility: Information transmitted via EDI can be tracked all the way along the supply chain, enhancing visibility and accountability. Management can spot potential inefficiencies and collaborate more effectively with their trading partners.
6. Better Data Management: EDI data is digital, which means it can be searched, mined, scraped, and analyzed for continuous improvement

What Is SaaS EDI?

What Is SaaS?

SaaS–software as a service–is a new(ish) way for businesses to access and pay for software. Rather than “owning” the software themselves, companies subscribe to software and applications developed by third-party vendors and access them in the cloud.

The alternative to SaaS is “on-premise” or “on-prem,” which is software that you pay for and own. On-prem software doesn’t live in the cloud. It lives–or rather is stored–on a server, which companies usually keep in their office.

As outlined in the benefits below, SaaS is, in many ways, a better way to use software. It’s less onerous, more flexible, and (all things considered) less expensive. It’s no surprise, therefore, that the global SaaS market is growing massively. It’s expected to jump from $130.69 billion in 2021 to $716.52 billion in 2028 (at a CAGR of 27.5%.)

The Benefits of SaaS EDI

Reduced Time-to-Benefit

SaaS EDI is generally faster to implement than on-prem, so you can quickly benefit from the time and cost savings.

Integrating SaaS EDI with your back-end systems, such as your ERP system, still takes time (don’t trust any vendor that says otherwise!) But most companies experience rapid ROI and are up and running faster than they expect.

Subscription Vs. Upfront Costs

Unlike on-prem software, which companies usually pay for upfront, SaaS solutions are available on a subscription basis. You pay to use the software monthly, which suits many small and medium companies better.

One thing you don’t have to worry about with 1 EDI Source is being “tied in.” Whether you’re an on-prem or SaaS customer, you own your maps. If you decide to switch vendors, you can take your maps with you, which isn’t always the case with our competitors.

Lower Total Cost of Ownership

With SaaS EDI, you don’t “own” the software–you effectively “rent” it, paying monthly for use. The vendor accepts full responsibility for the smooth running of the solution, which includes time-consuming bug fixes, updates, and upgrades.

Shifting the maintenance burden to the vendor reduces pressure on your IT team and means you don’t have to pay for expensive third-party support. You get all the new features that come down the pike automatically, keeping you one step ahead of the competition. 

Scalability

With SaaS EDI, you can scale freely, accessing additional resources at the touch of a button. Performance isn’t affected by high-pressure events like traffic spikes, and you don’t have to worry about outgrowing your solution. On the other hand, If things suddenly go south and your business contracts, you can drop down to a less expensive package, reducing your costs. 

Accessibility

SaaS EDI is delivered via the cloud. It’s accessible not from your desktop but in your browser. The untethered nature of cloud-based software means your employees can access your system anytime, from any location, and often from any device, giving you the flexibility required to adapt to remote and hybrid work models.

Integration

Cloud-based systems integrate via APIs (application programming interfaces), which enable two applications, like EDI and ERP, to “talk to each other” seamlessly. With APIs, it’s easier to design stable integrated systems for end-to-end automation. You can add and remove additional SaaS solutions easily without threatening the stability of your IT ecosystem. 

EDI + Cloud = SaaS EDI 

With SaaS EDI, companies can leverage all the benefits of EDI and the cloud in one piece of software. The cloud delivery element compounds the speed, efficiency, and visibility improvements any type of EDI solution provides. Throw lower costs, maintenance, and time-to-benefit into the mix, and SaaS EDI becomes an attractive choice for many businesses.

If you’ve any questions about this article or want to discuss SaaS EDI further, reach out to one of our experts at 1 EDI Source.