EDI solutions are like high-speed bridges connecting businesses, enabling efficient document exchanges, streamlining communications and eliminating traditional data transfer delays. But you need a solid blueprint before you can build your bridge. That’s where an EDI requirements template comes in.

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An EDI requirements template ensures you and your trading partners are on the same page, helps select necessary EDI features and simplifies implementation. In this article, we’ll guide you in crafting the perfect template to find the right software for your needs! Let’s dive in!

EDI Requirements Checklist

Key Requirements

We’ve onboarded over 100,000 users into our software selection platform. This has given us a wealth of insights into their usage patterns based on industry, company size and user persona. By leveraging this data, we’ve identified key requirements you should consider to minimize the risk of selecting the wrong software.

Our goal is to empower you to benefit from the collective experience of your peers who’ve embarked on the same journey before you.

The requirements below are a good starting point. However, because every business has different demands, we recommend customizing them to match your needs.

1. Document Management

The right EDI software should handle any document type you have on hand. The software converts documents you upload into a secure format and sends that format to the receiving party, whose software converts it back into its original form for them to read.

Take stock of the file formats your company uses most often and compare them to the software available to you to ensure which options are most compatible with your needs. The number of documents you send at once is an important factor as well — will a more basic solution with a limit on how many you can send suit you? If so, your business can save money by opting for a less complex EDI platform.

2. EDI Protocols and Standards

Imagine two businesses trying to communicate using walkie-talkies with incompatible channels. That’s the frustration you can avoid with standardized EDI protocols and formats. These are universal translators for your EDI software, ensuring seamless communication with your trading partners.

Gregory Shein, the owner of NOMADIC SOFT, echoes this sentiment:

EDI integration streamlined communication by automating data exchange, reducing manual intervention. For instance, order processing time decreased by 40% due to immediate, standardized data transmission. Moreover, the biggest impact of EDI has been a significant reduction in errors and faster processing times, leading to more reliable and efficient business operations.

Gregory SheinCEO, Nomadic Soft

EDI protocols are like encrypted languages that dictate how to pack and transmit your data. Popular options include VAN (Value Added Networks), AS2 (a secure internet protocol), FTP/sFTP (secure file transfer protocols) and HTTPS (used for secure web communication). These protocols ensure data security over public and private networks.

On the other hand, EDI standards define the structure and format of your data. This includes things like information order and file types. Common EDI standards include ASC X12 (prevalent in the US), EDIFACT (widespread in Europe), Tradacoms (used in specific industries) and XML (a flexible, text-based format).

• EDIFACT Protocols and Standards
• EDIINT (AS1/3), AS4, and ebXML Protocols
• Health Care Protocols and Standards
• MFT Protocols
• X12 Standards

3. EDI Transaction and Community Management

Transaction management and community management help your business identify common trends in the documents and files you send and receive. These features also eliminate duplicate entries and notify you and your partners if a transfer has failed.

Using these features means receiving useful insight into how your transactions are performing, allowing you to pinpoint trends and identify opportunities for improvement. This insight should also help you eliminate recurring errors by finding out when and where they occur.

Ashwin Ramesh, CEO of Synup, said:

Previously, processing a customer order required manual entry into the system, potential back-and-forth for clarifications, and then sending a separate invoice. EDI automates this entire process. The customer’s order populates directly into the system, triggering automatic inventory checks, order fulfillment, and electronic invoice generation. This reduces processing time, minimizes errors, and improves customer satisfaction.

Ashwin RameshCEO, Synup

• Document Tracking and Searching
• Duplicate Checking
• EDI Trading Partner Group/Label
• EDI Trading Partner Lookup
• EDI Trading Partner Setup and Customizable Partner Configuration
• Message Log
• Message Tracking
• Partner Onboarding
• Self-registration
• Web Portal

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4. EDI Translation and Mapping

Any EDI software you choose needs to not only translate its data into other formats but also integrate with ERP and accounting solutions.This ensures proper syncing and provides automation benefits, drastically reducing the possibility of human error in data logging.

Robert Khachatryan, CEO and founder of Freight Right Global Logistics, highlighted:

EDI has slashed manual entry errors by 85%, leading to more accurate transactions. This reduction in errors has not only saved time but also reduced the costs associated with correcting mistakes. Transaction processing times have also decreased by 70%, allowing for quicker responses and turnaround. This efficiency boost has enabled us to meet tight deadlines and improve our overall service quality.

Robert KhachatryanCEO and Founder, Freight Right Global Logistics

EDI mapping, on the other hand, directly integrates with your ERP solution to automatically carry out the encoding, transfer and decoding process for certain files and data types. This can be difficult to set up on your own, so be sure your EDI provider has a reliable support team to help.

5. Integrations and Extensibility

As mentioned above, integration with other software is an important part of ensuring your EDI platform is running smoothly and copying the correct data. While businesses that don’t need many EDI transactions may benefit from a standalone system, growing businesses or businesses of considerable size should consider integrating their EDI and ERP systems to improve informational consistency and reduce errors.

APIs, though often cited as EDI replacements, can be useful in making these integrations easier. Additionally, some systems provide Lightweight Directory Access Protocol (LDAP) to access an Active Directory (AD) database.

6. Platform Capabilities and Security

Integrating EDI with your other business systems allows you to take advantage of full-spectrum reporting and business intelligence. It lets you track EDI activity through custom dashboards and view metrics through “Schema-on-Read” technology.

It’s also important to be sure the support system in place for the EDI product you choose is reliable, such as with a service level agreement (SLA). Many systems offer customized SLAs to meet customer requirements, with some even promising service uptimes of over 99.9%.

By definition, EDI software promotes security by encrypting data, but you’ll want to be sure the service for this technology is reliable as well. It’s useful to look at customer sentiment and reviews to get a sense of how support works with any product you’re considering.

Benefits of EDI Requirements Analysis

Now that we’ve explored the essential features of an ideal EDI solution, you may wonder why it’s necessary to conduct a comprehensive analysis of your business’s internal requirements. After all, why not get an EDI platform that includes all the features mentioned above?

The reality, however, is more nuanced. A thorough analysis of your unique business needs is crucial to selecting and implementing an EDI solution that truly optimizes your operations.

A clear list of requirements, ranked by importance, helps define the technical and functional needs of your business. This ensures that the software you choose can support the specific needs of various departments and processes while also being flexible enough to adapt to future changes and growth.

Manan Roy, Principal Analyst at SelectHub, explains the importance of a requirements checklist:

A comprehensive requirements document serves as a reference point for all team members, fostering better communication and collaboration among developers, designers and stakeholders. Overall, it reduces the risk of implementation failures and the need for complex, costly customizations after the go-live.

Manan RoyPrincipal Analyst, SelectHub

To ensure smooth EDI implementation, gather your business’s requirements by outlining the specific needs and goals the system should address. By identifying trading partners, the types of transactions to automate and the necessary data exchanges, you can effectively plan the implementation process while minimizing disruptions.

Here are some more tips from Roy on how organizations can lay the groundwork for a successful EDI requirements analysis:

• Determine the types of transactions they need to automate (e.g., invoices, purchase orders, shipping notices).
• Specify the data elements they need to exchange for each transaction type.
• Consider their future EDI needs and scalability requirements.
• Consider hiring an EDI software selection and implementation consultant to gain insights into the latest technology trends and ensure that innovative features are included in requirements.
• Tools like the SelectHub TSM platform can help organizations seamlessly build, prioritize, weigh and manage requirements. This streamlines the process and provides clarity in decision-making.

How To Set up EDI

The decision to implement EDI is a great first step towards streamlining your data exchange and boosting efficiency. But now comes the question: how do you actually set it up?

In this section, we’ll go over the most important steps to help you identify your requirements, choose the best solution and lay the foundation for a successful implementation.

Assess Your Needs

It’s crucial to take a step back and assess your specific needs before diving headfirst into a solution. This initial planning stage will lay the groundwork for a smooth and successful integration. Here are some key aspects you must clearly define:

• Trading Partners: Who will you be exchanging data with? Identify all your business partners who require EDI integration.
• Document Exchange: What type of documents will you be sending and receiving? Common EDI documents include purchase orders, invoices and shipping notifications.
• Endpoints: Which internal systems will need to connect with your EDI solution?
• EDI Standards: Determine the common EDI standards used by you and your trading partners.
• Communication Protocols: Choose the technology you’ll use to transmit data. This could be a Value Added Network (VAN), AS2, secure file transfer protocols (FTP/sFTP) or HTTPS.

Beyond that, here are some key questions you can ask internally to identify your requirements better:

• Which of our current business partners are already using EDI? This helps identify who you need to prioritize for EDI integration.
• Which documents cause the most delays or errors in our current processes? This focuses your EDI implementation on the areas with the biggest impact.
• Do we have an internal IT team or resources to manage the EDI integration process? Knowing your internal capabilities helps determine if additional support is needed.
• What’s our budget for EDI implementation, including software, potential training and ongoing maintenance? Setting a budget upfront ensures a realistic approach to EDI adoption.
• What are our long-term goals for EDI integration? Understanding your vision helps tailor the implementation to support future growth and objectives.

Once you’ve identified your business’s internal needs, you’re ready to compile a requirements checklist. Here are a few pointers from Roy you should consider when creating the checklist:

• Identify manual workflows currently in place and explore features and functionalities in modern EDI platforms that can automate these processes.
• Gather technical, functional and service-related pain points from stakeholders and document them as requirements to address in the new EDI software.
• Identify the enterprise applications and prioritize them for EDI deployment and conversion to EDI.
• Use Cost Benefits Analysis (CBA) and EDI Surveys to determine which part of the organization is most ready for EDI, which cycle will cost the least to implement EDI, and which will deliver the greatest savings/increase in profitability.
• Prioritize and classify requirements into must-haves, nice-to-haves and future considerations. This helps in focusing on immediate needs while keeping an eye on future growth.

Identify the Right Solution

The global EDI Software market is projected to reach $7.84 Billion by 2032, growing at a CAGR of 16.01%. In such a growing market, it’s easy to get swept up in generic features and overlook your specific needs.

To avoid this pitfall, use your requirements checklist as a vetting tool to compare and analyze the options in the market. Here are a few key features you can consider including in your checklist:

• Supported Standards and Protocols: Does the software support the EDI standards and communication protocols your trading partners use?
• Data Mapping and Translation Capabilities: Can the software seamlessly map your internal data formats to the EDI standards required by your partners?
• Trading Partner Management: Does the solution offer tools to manage your trading partner network efficiently, including onboarding and ongoing communication?
• Security Features: Does the software prioritize data security with features like encryption and access controls to protect sensitive information?
• Scalability and Flexibility: Can the solution adapt to your growing business needs and integrate with future apps or systems?
• Reporting and Analytics: Does the software provide reporting and analytics tools to track EDI activity and identify areas for improvement?

But that’s not all.

Roy explains additional ways to compare EDI software:

Look for user reviews, case studies and demo versions to get a sense of how each product performs in real-world scenarios. Consider using software selection and analysis tools like SelectHub, which can streamline the evaluation and selection process by providing comparisons of various products based on your specific requirements.

Manan RoyPrincipal Analyst, SelectHub

At SelectHub, we compile user reviews, feature analysis and pricing information to create detailed product comparison matrixes. We let you compare the industry’s leading products side-by-side to help you find the most suitable product for your business.

You can explore these comparisons between leading EDI solutions:

• IBM Sterling B2B Integrator vs. Boomi
• Boomi vs. B2B Data Exchange
• B2B Data Exchange vs. IBM Sterling B2B Integrator

If you want to simplify your software selection journey, consider adopting our Lean Selection methodology. It’s a proven nine-step process that ensures you dot your i’s and cross your t’s when analyzing software and minimizes the risk of overlooking crucial features. Give it a try!

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Plan Staff Training and Conduct Implementation Testing

As you near the finish line of your EDI implementation journey, it’s time to focus on training and testing. Equipping your team with the necessary knowledge and conducting thorough testing are crucial steps for a smooth and successful launch.

Khachatryan said:

Invest in training. Make sure your team is well-trained to use EDI systems effectively. Proper training ensures that your staff can maximize the benefits of EDI and avoid common pitfalls.

Robert KhachatryanCEO and Founder, Freight Right Global Logistics

A well-designed training program will familiarize your team with EDI software, data mapping procedures and best communication practices. This empowers them to unlock EDI’s full potential and navigate the system confidently.

Following training, thorough testing is essential. This involves simulating real-world data exchanges with your trading partners to identify and rectify potential issues before going live.

Khachatryan added:

You can start by testing core processes with a limited number of partners. This allows you to manage the transition smoothly and address any unforeseen challenges in a controlled environment. Once you’ve ironed out any kinks in the system, you can then confidently expand EDI integration to your entire trading partner network.

FAQs

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Next Steps

Our EDI requirements list will give you a starting point to help you shop for the best software fit. But the process doesn’t exactly end there. Luckily, we have the resources to help at every step of the way.

We’ve created an EDI requirements template that you can download for free! It covers all high, medium and low-priority EDI features you might need in potential software. You can use it to customize and prioritize your business requirements.

Do you think you’re ready for a successful EDI software selection and implementation? Which are the most important features you look for in EDI software? What challenges have you faced in your EDI journey? Share your experiences and insights in the comments below!

SME Contributors

Robert Khachatryan is the CEO and founder of Freight Right Global Logistics. He has expertise in ocean freight visibility, supply chain design, eCommerce shipping, freight marketplaces and booking automation. With a background in rates and supply chain dynamics, he offers insights into current industry trends and challenges.

Ashwin Ramesh is the CEO of Synup, a rapidly growing SaaS startup in the location and brand marketing space. With a strong background in digital marketing strategy, Ashwin previously served as the CEO of OrganicApex, overseeing technology and marketing strategies.

He also held roles as Business Head at eAscend and CEO at E-business Initiative, specializing in backend SEO. Ashwin’s experience in managing and growing tech-driven companies highlights his expertise in driving business success in competitive markets.

Gregory Shein is an entrepreneur and full-stack web developer with experience in eCommerce and SaaS projects. He’s the CEO of Nomadic Soft in Dubai, a company he founded in 2020. Gregory previously held the position of CTO at Apollo Internet and GS Software House, where he was responsible for leading technology initiatives.

His career also includes a successful tenure as a freelance web developer on Upwork, roles as CTO at Beamge.com and founder of Moy-razmer.

Manan Roy is a native of Tezpur, Assam (India), who currently lives in Kolkata, West Bengal (India). At SelectHub, he works on categories like CRM, HR, PPM, BI, and EHR. He has a Bachelor of Technology in CSE from The Gandhi Institute of Engineering and Technology, a Master of Technology from The Institute of Engineering and Management IT, and an MBA in Finance from St. Xavier’s College. He’s published two research papers, one in a conference and the other in a journal, during his Master of Technology.