January 5, 2016

EDI Expert Video Series Episode 19: Outsourcing v. In-House EDI

In EDI Expert Video Series 2.0, IDEA’s B2B EDI Solutions Manager Tom Guzik goes beyond the basics of EDI to more complex topics. Intended as a guide to small IT teams making big decisions and changes, this series explores the ins and outs of EDI implementation, integration, and maintenance.   
 
In this episode, we discuss conducting EDI in-house compared to outsourcing. If you have any questions you would like to see answered in a future segment, please submit your topic to communications@idea4industry.com

 

Q: Why would I choose an EDI software solution over a web-based or service bureau solution?
 
A: The reason why you would want to choose your own EDI software package to run in-house versus going with a service bureau depends upon the volume of activity you have. If you have lots of trading partners and expect to have a lot of EDI transactions that are line intensive (i.e., larger transactions), it might make sense to purchase EDI software and build that into your IT system.

This is in comparison to going with an outsourced solution, such as a web-services bureau, where you will definitely benefit from not needing to purchase software and have initial upfront capital expenses, but you’ll end up paying more for the service in the long run. This is because you typically pay for the eaches, so for each transaction, each document, and each trading partner added, you’re going to incur additional costs.

So, typically the scale balances out that when you’re doing a low transactional level with a small handful of trading partners, outsourcing it makes a lot of sense. Once you start getting larger, where you have about 100 trading partners or more with 12 to 14 different documents exchanged with each over thousands of transactions a week, it’s actually cheaper to bring your EDI efforts in-house, own the software, and have a dedicated resource who manages it on your behalf because then you can grow exponentially without increasing your costs. 

Want to learn more about EDI or IDEA’s IDX services? Contact Tom Guzik at tguzik@idea4industry.com.