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  • The global shipping crisis and procurement: Why automate purchase order confirmations?

    The global shipping crisis and procurement: Why automate purchase order confirmations?

    Trending articles

    The global shipping crisis and procurement: why automate order confirmations?

    The two-week closure of China’s Ningbo-Zhoushan Port south of Shanghai in August, following a dock worker’s positive test for COVID-19, has exacerbated the global shipping crisis. The pressures caused by this supply chain disruption have been relentless and, in procurement, it’s quickly being defined by significant delays and a subsequent backlog of purchase order confirmations that need to be processed. In Europe, businesses are reporting a dramatic increase in order confirmations as the ongoing disruption is forcing suppliers to provide multiple order confirmations for each purchase order. This challenge presents an opportunity for businesses to build long-term and sustainable resilience within their purchasing processes. By automating order confirmations with the Netfira Platform, businesses are able to ensure end-to-end transparency and allow employees to focus on value-adding tasks.

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    Procurement and the uncertain new world

    COVID-19 has caused unprecedented global disruption to businesses and consumers alike. The pandemic led to a drastic shift in consumer demand for certain goods. This demand was met with widespread lockdowns, causing many workers to remain at home, and has resulted in a massive shipping backlog and a global shortage of key materials and components. In May 2021, container ships were estimated to be spending an average of 33 hours anchored due to port congestion, up from only 8 hours in May 2019. This disruption has been felt by businesses across the globe, regardless of size. In September, for example, Toyota announced a 40% reduction in car manufacturing in light of a computer chip shortage. However, the pandemic alone is not to blame for the current global shipping crisis. In March 2021, a 400-meter-long container ship was blown off course by strong winds and caused a 6-day blockage of the Suez Canal, a vital passage linking Europe and Asia. The Suez Canal blockage is estimated to have cost $9 billion per day and highlights the need for business leaders to future-proof their processes against disruption in an uncertain and interconnected world.

    What makes purchase order confirmations so important?

    Purchase orders are legally binding contracts between the supplier and the buyer, but that legal protection is not valid until the purchase order confirmation is issued. If the purchase order is not confirmed and accepted by the supplier, it is not a contract. Moreover, without the purchase order confirmation, it is impossible to know whether or not a supplier actually received the order and is in the process of fulfillment. As soon as the supplier confirms the purchase order, the buyer receives a confirmation number by e-mail he or she can reference in the event that there is an issue with the order. Purchase order confirmations are also vital because the confirmed date will be taken into account when the system checks the material availability. Consequently, purchase order confirmations serve a legal as well as an operational function ensuring smooth procurement activities.

    Why purchase orders and purchase order confirmations need to be compared

    Documents that do not match perfectly represent different expectations for buyer and supplier and expose both to the risk of litigation. In addition, important details such as delivery dates are confirmed in a purchase order confirmation, making this transaction crucial to smooth business operations. Therefore, it is important that the buyer checks the confirmation against the purchase order, and contacts the business partner in case any discrepancy is found. 

    Automated order confirmations in response to new challenges in an uncertain world

    Manually processing, comparing and checking purchase order confirmations has always been time-consuming and error-prone. But with the COVID-19 pandemic exacerbating the global shipping crisis and leading to a significant shortage of materials, the workload has increased excessively. Buyers are confronted with an increasing backlog of purchase order confirmations. Today, it is not uncommon for up to 10 purchase order confirmations per purchase order to be generated due to changing situations and circumstances.

    Supply chain disruptions mean businesses are receiving multiple order confirmations per purchase order

    Whenever the price, quantity or delivery date changes because of unforeseen events or backlogs, a new purchase order confirmation must be created. The buyers, in turn, need to check and compare the new order confirmation against the purchase order. That is why purchasing needs to implement intelligent solutions allowing automated processing of order confirmations.

    How the Netfira Platform automates purchase order confirmations

    The Netfira Platform automates operational processes and the data and document exchange. For purchase order confirmations without deviances, the Netfira Platform offers fully automated processing thus completely erasing the need of manual work. In case the Platform finds a discrepancy, the system offers the buyers a guided standardised process. That way, buyers can process a high volume of order confirmations quickly, efficiently and correctly.

    Future-proof processes through the automation of order confirmations

    COVID-19, the shipping crisis, and the global shortage of key materials and components have significantly disrupted the supply chain. Purchasing must deal with an unprecedented level of uncertainty. Since uncertainty is inevitable and will always be a part of procurement managers’ lives, purchasing departments need to optimise and future-proof their operational processes to meet the challenges of an uncertain world and to deal with supply bottlenecks quickly and efficiently. By automating mundane work like processing purchase order confirmations, businesses can increase the reliability of their processes and achieve a competitive advantage. The Netfira Platform relieves buyers quickly and reliably, reduces manual workload and future-proofs procurement for present and future challenges.

    Webinar: Auftragsbestätigung-en automatisieren


    Video ansehen

    Bildschirm mit: Die Herausforderung bei Auftragsbestätigungen

    Pfleiderer Case Study

    Learn how Pfleiderer successfully digitised its procurement through process automation.

    Watch the video



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  • The global shipping crisis and procurement: Why automate purchase order confirmations?

    The global shipping crisis and procurement: Why automate purchase order confirmations?

    Trending articles

    The global shipping crisis and procurement: why automate order confirmations?

    The two-week closure of China’s Ningbo-Zhoushan Port south of Shanghai in August, following a dock worker’s positive test for COVID-19, has exacerbated the global shipping crisis. The pressures caused by this supply chain disruption have been relentless and, in procurement, it’s quickly being defined by significant delays and a subsequent backlog of purchase order confirmations that need to be processed. In Europe, businesses are reporting a dramatic increase in order confirmations as the ongoing disruption is forcing suppliers to provide multiple order confirmations for each purchase order. This challenge presents an opportunity for businesses to build long-term and sustainable resilience within their purchasing processes. By automating order confirmations with the Netfira Platform, businesses are able to ensure end-to-end transparency and allow employees to focus on value-adding tasks.

    Share:

    Procurement and the uncertain new world

    COVID-19 has caused unprecedented global disruption to businesses and consumers alike. The pandemic led to a drastic shift in consumer demand for certain goods. This demand was met with widespread lockdowns, causing many workers to remain at home, and has resulted in a massive shipping backlog and a global shortage of key materials and components. In May 2021, container ships were estimated to be spending an average of 33 hours anchored due to port congestion, up from only 8 hours in May 2019. This disruption has been felt by businesses across the globe, regardless of size. In September, for example, Toyota announced a 40% reduction in car manufacturing in light of a computer chip shortage. However, the pandemic alone is not to blame for the current global shipping crisis. In March 2021, a 400-meter-long container ship was blown off course by strong winds and caused a 6-day blockage of the Suez Canal, a vital passage linking Europe and Asia. The Suez Canal blockage is estimated to have cost $9 billion per day and highlights the need for business leaders to future-proof their processes against disruption in an uncertain and interconnected world.

    What makes purchase order confirmations so important?

    Purchase orders are legally binding contracts between the supplier and the buyer, but that legal protection is not valid until the purchase order confirmation is issued. If the purchase order is not confirmed and accepted by the supplier, it is not a contract. Moreover, without the purchase order confirmation, it is impossible to know whether or not a supplier actually received the order and is in the process of fulfillment. As soon as the supplier confirms the purchase order, the buyer receives a confirmation number by e-mail he or she can reference in the event that there is an issue with the order. Purchase order confirmations are also vital because the confirmed date will be taken into account when the system checks the material availability. Consequently, purchase order confirmations serve a legal as well as an operational function ensuring smooth procurement activities.

    Why purchase orders and purchase order confirmations need to be compared

    Documents that do not match perfectly represent different expectations for buyer and supplier and expose both to the risk of litigation. In addition, important details such as delivery dates are confirmed in a purchase order confirmation, making this transaction crucial to smooth business operations. Therefore, it is important that the buyer checks the confirmation against the purchase order, and contacts the business partner in case any discrepancy is found. 

    Automated order confirmations in response to new challenges in an uncertain world

    Manually processing, comparing and checking purchase order confirmations has always been time-consuming and error-prone. But with the COVID-19 pandemic exacerbating the global shipping crisis and leading to a significant shortage of materials, the workload has increased excessively. Buyers are confronted with an increasing backlog of purchase order confirmations. Today, it is not uncommon for up to 10 purchase order confirmations per purchase order to be generated due to changing situations and circumstances.

    Supply chain disruptions mean businesses are receiving multiple order confirmations per purchase order

    Whenever the price, quantity or delivery date changes because of unforeseen events or backlogs, a new purchase order confirmation must be created. The buyers, in turn, need to check and compare the new order confirmation against the purchase order. That is why purchasing needs to implement intelligent solutions allowing automated processing of order confirmations.

    How the Netfira Platform automates purchase order confirmations

    The Netfira Platform automates operational processes and the data and document exchange. For purchase order confirmations without deviances, the Netfira Platform offers fully automated processing thus completely erasing the need of manual work. In case the Platform finds a discrepancy, the system offers the buyers a guided standardised process. That way, buyers can process a high volume of order confirmations quickly, efficiently and correctly.

    Future-proof processes through the automation of order confirmations

    COVID-19, the shipping crisis, and the global shortage of key materials and components have significantly disrupted the supply chain. Purchasing must deal with an unprecedented level of uncertainty. Since uncertainty is inevitable and will always be a part of procurement managers’ lives, purchasing departments need to optimise and future-proof their operational processes to meet the challenges of an uncertain world and to deal with supply bottlenecks quickly and efficiently. By automating mundane work like processing purchase order confirmations, businesses can increase the reliability of their processes and achieve a competitive advantage. The Netfira Platform relieves buyers quickly and reliably, reduces manual workload and future-proofs procurement for present and future challenges.

    Webinar: Auftragsbestätigung-en automatisieren


    Video ansehen

    Bildschirm mit: Die Herausforderung bei Auftragsbestätigungen

    Pfleiderer Case Study

    Learn how Pfleiderer successfully digitised its procurement through process automation.

    Watch the video



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  • What is a purchase order confirmation?

    Trending articles

    What is a purchase order confirmation?

    Whenever a buyer places an order, a purchase order is issued. The supplier in turn generates a purchase order confirmation to confirm the purchase order. 

    What is a purchase order?

    A purchase order (PO) is an administrative document that specifies the quantity, quality, unit and total price of goods or services that suppliers must provide.  The purchase order also states the general terms and conditions such as delivery terms, price, payment terms, payment means, legal conditions etc.

    What is a purchase order confirmation?

     A purchase order confirmation (POC) is the conclusion of the negotiation between a buyer and a supplier about the sales price and delivery date and hour of a purchase order a buyer sent. The confirmation outlines the acceptance (total or partial) of the conditions set by the buyer in the purchase order. If the purchase order confirmation confirms the purchase order totally, then the parties are legally bound to the transaction as per the terms set therein.  

    Why is a purchase order confirmation important?

    Purchase order confirmations serve a legal as well as an operational function ensuring smooth procurement activities. 


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  • Webinar: Automate and not just digitise

    Webinar: Automate and not just digitise

    Webinar:

    Automate and not just digitise – The challenge with order confirmations

    Online | On demand


    Watch the webinar

    *The recording of this webinar is only available in German. 

    The current procurement situation and the COVID-19 pandemic highlight the need for reliable, transparent and, above all, efficient processes. Purchasing departments are required to use digital solutions in order to be successful and future-proof.

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    In purchasing, the processing of order confirmations proves to be an important, but often time-consuming and labour-intensive activity. While one order confirmation was sent per order in the past, today often 3, 5, 7 or even more order confirmations are  sent. The processing effort explodes. Therefore, digital solutions should be used here to optimise these processes.

    The decisive factor is the maximum possible degree of automation in order to successfully relieve the procurement department.

    How you can achieve this with the help of the Netfira Platform with an implementation time of only approximately 6 weeks and an internal IT effort of approximately 2-3 project days, you will learn in our free webinar “Automate and not just digitise – The challenge with order confirmations“.


    Watch The Webinar

    Learn how to:

    • Automate data and document processing 
    • Connect business partners with the Netfira Onboarding App 
    • Digitise and automate operational processes  
    • Process purchase order confirmations automatically

    Presenter:

    Michael Kuhn

    Head of Sales


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  • The Netfira Platform – unique alternative to EDI

    The Netfira Platform – unique alternative to EDI

    Trending articles

    The Netfira Platform – a unique alternative to traditional EDI solutions

    EDI is a set standard in some industries and sectors, such as in retail or the automotive industry. For many enterprises, however, EDI is not the right solution as it is too complex and expensive. In other areas, like purchasing, there are innovative alternatives to the classic EDI solutions. The Netfira Platform increases operational efficiency by providing a cloud-based SaaS solution that automates B2B document exchange processes and connects all relevant business partners quickly and easily. 

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    Download the information sheet

    Please fill out the form below to receive the Netfira vs EDI information sheet.


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  • Has the coronavirus pandemic boosted the digitisation of purchasing processes? 

    Has the coronavirus pandemic boosted the digitisation of purchasing processes? 

    Trending articles

    Has the coronavirus pandemic boosted the digitisation of purchasing processes?

    For over a year now, the corona pandemic has had the global economy firmly in its grip. In spring 2020, it quickly became apparent that purchasing was behind when it comes to digitisation. However, the COVID-19 pandemic also triggered positive developments as it helped to change our view of digitisation. Companies began to realise that technology and digitalisation tools are a stabilisation and success factor in times of existence-threatening crises. But what about the digital transformation in purchasing today? Has the coronavirus pandemic boosted the digitisation of purchasing processes? 

    Share:

    The digitisation of purchasing processes has become a priority

    Surveys show that during the coronavirus pandemic, cost reduction, supplier management and the digitisation of purchasing processes are of central importance. Most companies have reconsidered their priorities in response to the crisis. While process efficiency and efficient data management have long been decisive prerequisites for modern and resilient purchasing, these issues are even more important today. That is why it is now vital to digitise further and optimise operational purchasing processes. Buyers acknowledge the importance of digitised processes but do they use intelligent automation tools to achieve that goal?   

    Too little operational automation in procurement

    The automation rate in operational purchasing is still comparatively low in 2021. Yet, the automation of operational activities plays a vital role in the digitisation of purchasing processes. The automation of operational processes leads to reduced manual tasks, fewer errors, more efficiency and transparency, and process optimisation in procurement. Furthermore, in the fight against the consequences of the pandemic, purchasing plays a crucial role in the company. Disrupted supply chains put risk management as well as supply and process security at the centre of attention. The use of digital automation tools and software solutions enables and facilitates these tasks immensely. 

    Cloud-based platform solutions have a high future potential

    Survey results show that only a small proportion of cloud-based platform solutions are currently  used, but most companies consider them to have a high future potential for procurement. The Netfira Platform, for example, is offered as a SaaS solution (Software-as-a-Service) and operated in the cloud. Compared to on-premise solutions, the SaaS service model provides low costs, high flexibility and cost-effective scalability while guaranteeing high data protection. This is particularly important in times like these, as procurement must react to developments and requirements in an agile, flexible and cost-efficient way. 

    Artificial Intelligence has high application potential in the future

    Even though only a small proportion of the companies surveyed use Artificial Intelligence (AI) in purchasing, most are convinced that AI has high application potential in the future. The AI-based Netfira Platform already demonstrates this. Innovative Artificial Intelligence can show its full strengths particularly in operational procurement, which is predominantly characterised by manual tasks. When processing documents and data, AI imitates the human behaviour of those involved in the process. This means automated data exchange at the push of a button with high data accuracy. AI thus brings enormous added value to purchasing and facilitates and accelerates B2B communication. Time-consuming and error-prone work is noticeably reduced, and buyers have the opportunity to invest time and resources in other tasks such as risk management, supplier management and liquidity management.

    Obstacles to digitising purchasing processes

    The results of surveys indicate that although the companies surveyed recognise the application potential of new technologies, they encounter technical and organisational obstacles when implementing and using them. The most common barriers are lack of compatibility and interfaces between systems, insufficient investment budget, bad data quality, high data protection requirements, and lack of technical infrastructure. The Netfira Platform integrates seamlessly into any existing ERP and IT systems and guarantees a bidirectional digital exchange of data and documents with business partners regardless of their processes and ERP systems. The artificially intelligent cloud solution turns unstructured data into structured data and allows organisations to automate document processing tasks and free employees of manual, repetitive and error-prone activities. Read here how the Netfira Platform increases data quality in purchasing through process automation.  

    How can the digitisation of purchasing processes be boosted?

    The situation of purchasing has not changed that profoundly compared to 2020. The current pandemic makes it necessary to not only rely on short-term solutions for crisis management. Instead, digital automation tools combined with the advancement of new technologies like AI and SaaS are now decisive for competition. The impact of COVID-19 should be an impetus for structural change and an opportunity to identify and address existing deficits in digitalisation quickly. Particular attention should be paid to long-term and sustainable digitisation partnerships. Using new digital technologies and state-of-the-art electronic solutions, procurement departments can become more resilient during and after the crisis. 

     Sources:  

    https://stoehr-faktor.de/dokumente/download-studien/2020-08-studie-neue-bmoe-studie-management-summary.pdf 

    https://www.bme.de/corona-ist-weckruf-fuer-digitale-transformation-im-einkauf-3698/ 

     


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  • Has the coronavirus pandemic boosted the digitisation of purchasing processes? 

    Has the coronavirus pandemic boosted the digitisation of purchasing processes? 

    Trending articles

    Has the coronavirus pandemic boosted the digitisation of purchasing processes?

    For over a year now, the corona pandemic has had the global economy firmly in its grip. In spring 2020, it quickly became apparent that purchasing was behind when it comes to digitisation. However, the COVID-19 pandemic also triggered positive developments as it helped to change our view of digitisation. Companies began to realise that technology and digitalisation tools are a stabilisation and success factor in times of existence-threatening crises. But what about the digital transformation in purchasing today? Has the coronavirus pandemic boosted the digitisation of purchasing processes? 

    Share:

    The digitisation of purchasing processes has become a priority

    Surveys show that during the coronavirus pandemic, cost reduction, supplier management and the digitisation of purchasing processes are of central importance. Most companies have reconsidered their priorities in response to the crisis. While process efficiency and efficient data management have long been decisive prerequisites for modern and resilient purchasing, these issues are even more important today. That is why it is now vital to digitise further and optimise operational purchasing processes. Buyers acknowledge the importance of digitised processes but do they use intelligent automation tools to achieve that goal?   

    Too little operational automation in procurement

    The automation rate in operational purchasing is still comparatively low in 2021. Yet, the automation of operational activities plays a vital role in the digitisation of purchasing processes. The automation of operational processes leads to reduced manual tasks, fewer errors, more efficiency and transparency, and process optimisation in procurement. Furthermore, in the fight against the consequences of the pandemic, purchasing plays a crucial role in the company. Disrupted supply chains put risk management as well as supply and process security at the centre of attention. The use of digital automation tools and software solutions enables and facilitates these tasks immensely. 

    Cloud-based platform solutions have a high future potential

    Survey results show that only a small proportion of cloud-based platform solutions are currently  used, but most companies consider them to have a high future potential for procurement. The Netfira Platform, for example, is offered as a SaaS solution (Software-as-a-Service) and operated in the cloud. Compared to on-premise solutions, the SaaS service model provides low costs, high flexibility and cost-effective scalability while guaranteeing high data protection. This is particularly important in times like these, as procurement must react to developments and requirements in an agile, flexible and cost-efficient way. 

    Artificial Intelligence has high application potential in the future

    Even though only a small proportion of the companies surveyed use Artificial Intelligence (AI) in purchasing, most are convinced that AI has high application potential in the future. The AI-based Netfira Platform already demonstrates this. Innovative Artificial Intelligence can show its full strengths particularly in operational procurement, which is predominantly characterised by manual tasks. When processing documents and data, AI imitates the human behaviour of those involved in the process. This means automated data exchange at the push of a button with high data accuracy. AI thus brings enormous added value to purchasing and facilitates and accelerates B2B communication. Time-consuming and error-prone work is noticeably reduced, and buyers have the opportunity to invest time and resources in other tasks such as risk management, supplier management and liquidity management.

    Obstacles to digitising purchasing processes

    The results of surveys indicate that although the companies surveyed recognise the application potential of new technologies, they encounter technical and organisational obstacles when implementing and using them. The most common barriers are lack of compatibility and interfaces between systems, insufficient investment budget, bad data quality, high data protection requirements, and lack of technical infrastructure. The Netfira Platform integrates seamlessly into any existing ERP and IT systems and guarantees a bidirectional digital exchange of data and documents with business partners regardless of their processes and ERP systems. The artificially intelligent cloud solution turns unstructured data into structured data and allows organisations to automate document processing tasks and free employees of manual, repetitive and error-prone activities. Read here how the Netfira Platform increases data quality in purchasing through process automation.  

    How can the digitisation of purchasing processes be boosted?

    The situation of purchasing has not changed that profoundly compared to 2020. The current pandemic makes it necessary to not only rely on short-term solutions for crisis management. Instead, digital automation tools combined with the advancement of new technologies like AI and SaaS are now decisive for competition. The impact of COVID-19 should be an impetus for structural change and an opportunity to identify and address existing deficits in digitalisation quickly. Particular attention should be paid to long-term and sustainable digitisation partnerships. Using new digital technologies and state-of-the-art electronic solutions, procurement departments can become more resilient during and after the crisis. 

     Sources:  

    https://stoehr-faktor.de/dokumente/download-studien/2020-08-studie-neue-bmoe-studie-management-summary.pdf 

    https://www.bme.de/corona-ist-weckruf-fuer-digitale-transformation-im-einkauf-3698/ 

     


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  • Why the corona pandemic is an opportunity for digital transformation

    Why the corona pandemic is an opportunity for digital transformation

    Trending articles

    Why the corona pandemic is an opportunity for digital transformation

    In 2021, the corona pandemic is not yet over. Even after one and a half years in which COVID-19 has dominated people’s lives, Germany is still lagging in many areas of digitisation. But are there also positive developments? Is the corona pandemic a unique opportunity for driving digital transformation in companies? 

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    Germany is behind in terms of digitisation

    Economic experts have long criticised Germany’s sluggish digitisation efforts in industry and economy. Many companies see the need to adapt their processes, approaches and business models to the rapid advancements in technology, but changes are often implemented too slowly or not at all. The failures of politics and industry have become apparent through the coronavirus pandemic: it has exposed and exacerbated the structural problems that had existed before but had not been taken seriously. Germany’s digitisation deficit has been revealed in many areas. These areas include e-government, e-health, e-learning, digital infrastructure, remote work and digital business models in general. 

    Digitisation boost through the COVID-19 pandemic

    The corona pandemic has also led to positive developments. It has triggered a kind of “forced digitisation” in many companies, authorities and organisations. As a result, millions of people are enjoying the benefits of the leap into the digital future. In many companies, all meetings are held online using video chat platforms, and doctors, for example, have set up digital office hours. Read here how we at Netfira have managed to stay in touch as a global team during the COVID-19 pandemic. Whether in schools, administrations or companies: a digital infrastructure that allows processes to function without people having to come together physically has proved to be not only a competitive advantage but necessary for survival. 

    A changed view on the importance of digitisation through the corona pandemic

    Hastily implemented digitisation of processes is not the most significant development caused by the corona pandemic. It is true that digitisation efforts have been massively accelerated and that results and practicable applications were suddenly achieved. However, it is much more important that the COVID-19 pandemic has permanently changed our view of digitisation. People are aware that technology and digitisation tools are a stabilisation and success factor in times of existence-threatening crises, which can determine a company’s economic survival and not a negligible point on a business agenda. Companies recognise the risks they take if they do not have a digital strategy and cannot switch to alternative ways of working or sales channels in an emergency. That is why companies have started to take measures to prepare for current and future crises. For example, many enterprises rely on AI so that production and basic work processes can continue in the event of a crisis. As we now practice using digital technologies, a new understanding of technology, new ideas and new business models are emerging. 

    The corona pandemic as an opportunity for digital transformation

    The coronavirus pandemic is thus an excellent opportunity for digital transformation in companies. While people acknowledge the importance and possibilities of digitisation, digital progress must continue to be promoted. Understandably, short-term digital efficiency gains and poorly conceptualised digital solutions have been used to react to the rapid and surprising developments in the spring of 2020. But after some time, the focus should be on long-term and efficient digital automation solutions. A digitisation strategy with reliable digitisation and automation tools is crucial for the digital transformation within an enterprise. Only then can the digitisation boost be an advantage for companies in the years to come.   


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  • Electronic B2B communication – is EDI the right solution?

    Electronic B2B communication – is EDI the right solution?

    Trending articles

    Electronic B2B communication – is EDI the right solution?

    EDI (Electronic Data Interchange) is used to connect businesses and to facilitate electronic B2B communication. It is a computer-to-computer exchange of business documents in a standard electronic format between business partners, which replaces postal mail, fax and e-mail processed by people. What are the features of EDI, how does it work, and what are the benefits and disadvantages of EDI? And is it the ideal solution for efficiently connecting suppliers and other business partners? Or are there other, better-suited options? 

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    What documents can be exchanged via EDI?

    Businesses exchange purchase orders, invoices and advance shipping notices via EDI systems. But there are many others, such as bill of lading, customs documents, inventory documents, shipping status documents and payment documents. 

    What EDI standards are there?

    There are several EDI standards in use today, including ANSI, EDIFACT, TRADACOMS and ebXML. Furthermore, there are many different versions for each standard, such as ANSI 5010 or EDIFACT version D12, Release A. 

    Why are EDI standards needed?

    Unlike humans, computers are not very good at reading between the lines. Therefore, business partners must adopt a standard format to allow the receiving computer to understand the documents. A typical standard format describes each piece of information and in what format (e.g. integer, decimal, mm-dd-yy). 

    How does EDI work?

    Sending EDI documents involves three steps:  

    Step 1: Prepare the document 

    • Collect and organise the data.  
    • The system creates an electronic file with the necessary information to build an EDI document. 

    Step 2: Translate the document into EDI format 

    • Feed electronic data through a translator software to convert your internal data format into the EDI standard format using the appropriate segments and data elements.  
    • You can purchase an EDI translation software that you manage and maintain yourself.  
    • Alternatively, you can use the translation services of an EDI service provider. 

    Step 3: Connect and transmit your EDI document to your business partner 

    • To transmit your EDI document, you need to decide how you will connect to each of your partners.  
    • Option 1: connect directly using AS2 or another secure internet protocol.  
    • Option 2: connect to an EDI network provider using your preferred communications protocol and rely on the network provider to connect to your business partners using whatever communications protocol your partners prefer.  
    • Option 3: use a combination of both, depending on the particular partner and the volume of transactions you expect to exchange.

    What are the benefits of EDI?

    • Processing speed is increased  
    • Errors are reduced  
    • Efficiency is increased  

    What are the disadvantages of EDI?

    • When two businesses decide to exchange EDI documents, they must agree on the specific EDI standard and version.  
    • Another disadvantage of EDI is that these standards are highly rigorous.  
    • You could end up maintaining several different EDI connections to various business partners using different standards and formats.  
    • Using ED software is expensive for you and your business partners.  
    • For many suppliers, EDI is too complex and too expensive.  
    • You may also have to sponsor the cost of implementation for your trading partners, to lower their barriers to connecting.   
    • 100% supplier connection of EDI is almost unattainable. 
    • For suppliers and other business partners, onboarding to EDI systems is typically painful, laborious and disruptive.  
    • From a technical point of view, EDI is very complex.  
    • For EDI projects, in-house IT needs to be involved.   
    • EDI projects are time-consuming and costly to set up.   
    • Initial capital investment is needed (e.g. for EDI software, communications software, mapping and translation software, and EDI and mapping specialists).

    Conclusion

    EDI is a powerful but also expensive solution. One main disadvantage of EDI is that it is mainly based on restrictions and narrowing specifications. Documents are processed according to different rules for different business partners, which causes EDI to lack flexibility. This type of solution is typically slow and expensive to connect with business partners, and many suppliers and business partners cannot be connected electronically.   

    While EDI certainly offers advantages and benefits to manual data processing and optimises the document and data exchange, it also comes with many disadvantages. For example, EDI often means accepting restrictive standards and formats, long project times, and barriers. In addition, many business partners will be excluded from a digital B2B connection because EDI is too complex and expensive.   

    However, seamless B2B workflows, automated exchange of data and documents and the electronic connection of all significant business partners along the supply chain are the pillars of modern procurement.   

    So is there an alternative?

    The Netfira Platform offers a unique alternative to EDI solutions for automating B2B purchasing processes. 

    Whitepaper: A unique alternative to EDI and OCR


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    Netfira's whitepaper: A unique alternative to EDI and OCR

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  • Electronic B2B communication – is EDI the right solution?

    Electronic B2B communication – is EDI the right solution?

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    Electronic B2B communication – is EDI the right solution?

    EDI (Electronic Data Interchange) is used to connect businesses and to facilitate electronic B2B communication. It is a computer-to-computer exchange of business documents in a standard electronic format between business partners, which replaces postal mail, fax and e-mail processed by people. What are the features of EDI, how does it work, and what are the benefits and disadvantages of EDI? And is it the ideal solution for efficiently connecting suppliers and other business partners? Or are there other, better-suited options? 

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    What documents can be exchanged via EDI?

    Businesses exchange purchase orders, invoices and advance shipping notices via EDI systems. But there are many others, such as bill of lading, customs documents, inventory documents, shipping status documents and payment documents. 

    What EDI standards are there?

    There are several EDI standards in use today, including ANSI, EDIFACT, TRADACOMS and ebXML. Furthermore, there are many different versions for each standard, such as ANSI 5010 or EDIFACT version D12, Release A. 

    Why are EDI standards needed?

    Unlike humans, computers are not very good at reading between the lines. Therefore, business partners must adopt a standard format to allow the receiving computer to understand the documents. A typical standard format describes each piece of information and in what format (e.g. integer, decimal, mm-dd-yy). 

    How does EDI work?

    Sending EDI documents involves three steps:  

    Step 1: Prepare the document 

    • Collect and organise the data.  
    • The system creates an electronic file with the necessary information to build an EDI document. 

    Step 2: Translate the document into EDI format 

    • Feed electronic data through a translator software to convert your internal data format into the EDI standard format using the appropriate segments and data elements.  
    • You can purchase an EDI translation software that you manage and maintain yourself.  
    • Alternatively, you can use the translation services of an EDI service provider. 

    Step 3: Connect and transmit your EDI document to your business partner 

    • To transmit your EDI document, you need to decide how you will connect to each of your partners.  
    • Option 1: connect directly using AS2 or another secure internet protocol.  
    • Option 2: connect to an EDI network provider using your preferred communications protocol and rely on the network provider to connect to your business partners using whatever communications protocol your partners prefer.  
    • Option 3: use a combination of both, depending on the particular partner and the volume of transactions you expect to exchange.

    What are the benefits of EDI?

    • Processing speed is increased  
    • Errors are reduced  
    • Efficiency is increased  

    What are the disadvantages of EDI?

    • When two businesses decide to exchange EDI documents, they must agree on the specific EDI standard and version.  
    • Another disadvantage of EDI is that these standards are highly rigorous.  
    • You could end up maintaining several different EDI connections to various business partners using different standards and formats.  
    • Using ED software is expensive for you and your business partners.  
    • For many suppliers, EDI is too complex and too expensive.  
    • You may also have to sponsor the cost of implementation for your trading partners, to lower their barriers to connecting.   
    • 100% supplier connection of EDI is almost unattainable. 
    • For suppliers and other business partners, onboarding to EDI systems is typically painful, laborious and disruptive.  
    • From a technical point of view, EDI is very complex.  
    • For EDI projects, in-house IT needs to be involved.   
    • EDI projects are time-consuming and costly to set up.   
    • Initial capital investment is needed (e.g. for EDI software, communications software, mapping and translation software, and EDI and mapping specialists).

    Conclusion

    EDI is a powerful but also expensive solution. One main disadvantage of EDI is that it is mainly based on restrictions and narrowing specifications. Documents are processed according to different rules for different business partners, which causes EDI to lack flexibility. This type of solution is typically slow and expensive to connect with business partners, and many suppliers and business partners cannot be connected electronically.   

    While EDI certainly offers advantages and benefits to manual data processing and optimises the document and data exchange, it also comes with many disadvantages. For example, EDI often means accepting restrictive standards and formats, long project times, and barriers. In addition, many business partners will be excluded from a digital B2B connection because EDI is too complex and expensive.   

    However, seamless B2B workflows, automated exchange of data and documents and the electronic connection of all significant business partners along the supply chain are the pillars of modern procurement.   

    So is there an alternative?

    The Netfira Platform offers a unique alternative to EDI solutions for automating B2B purchasing processes. 

    Whitepaper: A unique alternative to EDI and OCR


    Read now

    Netfira's whitepaper: A unique alternative to EDI and OCR

    Whitepaper: Eine einzigartige Alternative zu EDI und OCR


    Jetzt lesen

    Netfiras Whitepaper: Eine einzigartige Alternative zu EDI and OCR

    Return to blog