EDI Solutions Accommodate Ever-evolving Changes in Processes amidst COVID-19 Era
Companies in the electronic data interchange (EDI) solution market are capitalizing on value-grab opportunities amidst the COVID-19 pandemic, as customers are making the most of this software. Since moving of goods can be potentially challenging during the ongoing tumultuous times, EDI solutions are coming in handy to manage supply chains. Electronic data interchange (EDI) solutions are gaining increased popularity for minimizing the impact of operations during the pandemic. As such, the drop-ship routine is being enabled with the help of EDI purchase order (PO) transactions.
Stock and flow businesses are benefitting from EDI during the COVID-19 outbreak as such businesses involve repetitive ordering. Moreover, EDI PO is facilitating autonomous movement of goods, thus minimizing human interaction. Ever-evolving processes can be easily accommodated with the help of EDI solutions. The EDI software also generate advance ship notices that help to optimize the workflows for employees who work in receiving docks. These factors are anticipated to fuel the expansion of the electronic data interchange (EDI) solution market during the forecast period.
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Innovative Gateways in Software Automate Complex Handling of EDI Messages
In the age of digital transformation, organizations are investing in electronic data interchange solutions to overcome the issues of data explosion. Since several streaming devices and applications run parallel in enterprises, it has become important for managers to adopt EDI. However, in many cases, these managers are unhappy with the performance of EDI, as traditional solutions have several limitations when brought in practice. In particular, managing supply chain partners using value-added networks (VANs) as a hosted solution results in limited control for partner-onboarding and management. Hence, companies in the electronic data interchange (EDI) solution market are innovating in next-gen software involving artificial intelligence (AI) and IoT (Internet of Things).
There is a growing demand for modern EDI solutions that are agile and scalable. This helps organizations to adopt new technologies and address the ever-evolving needs of their clients. EDI software is being highly publicized for trading partner management and data mapping. Companies in the electronic data interchange solution market are introducing innovative gateways in software to automate complex handling of EDI messages.
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Future-proof Software Systems Eliminate Issue of Replacing and Upgrading EDI Gateways
Advanced communication protocols and innovative technologies in electronic data interchange solutions are bolstering the uptake of software systems. Modernization of businesses is one of the key drivers for growth of the electronic data interchange (EDI) solution market. Likewise, modern EDI gateways make it easier and cost-efficient to implement EDI in routine B2B transmission. Disruptive technologies, such as AI and IoT are acquiring prominence in the EDI world and has helped to automate EDI validations, mapping, and parsing.
In order to stay relevant in the electronic data interchange (EDI) solution market, companies are increasing the availability of future-proof software systems that eliminate the hassle of replacing and upgrading EDI gateways.
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Cloud Integration Facilitates Self-service for Tracking and Monitoring File Exchanges
Cloud innovations are revolutionizing electronic data interchange solutions, owing to its advantages of low cost of ownership, flexibility, and recurring automated updates. Such innovations are expected to generate a revenue of US$ 66.8 Bn by 2030 for the electronic data interchange (EDI) solution market. Next-gen EDI solutions are eliminating the use of expensive VAN by ensuring secure file transfer mechanism for end users. Companies in the electronic data interchange (EDI) solution market are offering increased flexibility and elasticity in software systems with the help of automated technologies.
Modern EDI gateway solutions help to integrate within existing applications of the organization with the help of connectors and adaptors, resulting in cost savings for customers. Self-service is an important aspect of EDI solutions where organizations can collaborate with their partners to track and monitor the status of file exchanges.
Third Party EDI versus In-house Systems: Which is better?
Small companies are gravitating toward in-house processing for EDI integration. This explains why the electronic data interchange (EDI) solution market is expected to progress at a robust CAGR of ~8% during the forecast period. However, it has been argued whether large companies are opting for third party EDI. It has been found that third party EDI is significantly cost-intensive for large companies. Hence, companies are charging per relationship instead of per purchase order or per transaction.
The electronic data interchange (EDI) solution market is largely consolidated, as leading EDI companies such as Open Text are purchasing EDI translation companies including Liaison. The increasing number of mergers and acquisitions (M&A) has resulted in fewer options for clients or consultants to choose from. Thus, established market playing are posing as a major challenge for emerging market players.
API Emerges as Threat to EDI Due to Improvements in B2B Processes
EDI has a potential threat from modern APIs (Application Programming Interface). However, it has been argued that EDI is here to stay, at least, during the upcoming decade. Companies in the electronic data interchange (EDI) solution market are capitalizing on incremental opportunities, as many organizations are opting for cloud-based integration platforms (iPaaS) that accelerate processes and reduce time taken to complete EDI integrations. Modern iPaaS is known for its intuitive attributes and robust functioning in the IT industry.
Next-gen iPaaS platforms are predicted to enable API enhancements and B2B process improvements sans the need for an IT professional. This has challenged companies in the electronic data interchange (EDI) solution market. However, the shortage of IT skills has emerged as a roadblock for proliferation of API in organizations.
Electronic Data Interchange (EDI) Solution Market: Overview
- The electronic data interchange (EDI) solution market is expected to register a CAGR of ~8% between 2022 and 2030. The market is projected to be driven by rising adoption of EDI in supply chain and logistics services.
- The global electronic data interchange (EDI) solution market is expected to reach US$ 66.8 Bn by 2030 from US$ 30.9 Bn in 2022. Increasing adoption of digitized technology for workflow automation and IoT connected devices is expected to drive the growth of the market.
- The electronic data interchange (EDI) solution market in Asia Pacific and Middle East & Africa is anticipated to expand at a rapid pace during the forecast period, followed by South America and North America
- North America remained the dominant leader in the global electronic data interchange (EDI) solution market in year 2019, primarily due to rapid adoption by small & medium enterprises in this region
- Asia Pacific is projected to witness significant growth in the global electronic data interchange (EDI) solution market during the forecast period. Increasing investment as well as adoption of digitized technology across industries is expected to drive the adoption of EDI solutions.
Key Growth Drivers of Electronic Data Interchange (EDI) Solution Market
- Rising adoption of EDI in supply chain: Rising adoption and application of EDI solutions is fueling the demand for EDI platforms. EDI solutions have various applications in transport and distribution, administration, inventory and logistics management, and cash management. These solutions help companies reduce their paperwork, transcription errors, boost response time for procurement and customer needs, reduce stock-out situation of inventory, and secure payment of vendors. EDI solutions are also preferred by various government regulatory bodies of several countries across the world. For instance, the Customs and Central Excise Department in India has initiated various EDI interfaces to help customs house agents, carry & forward agents, and importers & exporters. The Indian Customs EDI System (ICES) is expected to help prepare shipping bills and bill of entry declarations in the format acceptable to the ICES for submission at the customs house through the ICEGATE (Indian Customs and Excise Gateway) portal.
- Increasing integration of advanced technologies with EDI: Adoption of advanced technologies by big players in the market is driving the demand for EDI solutions. Presently, several organizations use advanced technologies such as blockchain, artificial intelligence, and machine learning. Secure and quick transfer of data through the EDI platform takes place in various ways. For instance, Value Added Network (VAN) is an old technology used by EDI to retransmit documents, provide third-party audit information, act as a gateway for different transmission methods, and handle telecommunications support. VAN even provides support when both trading partners utilize Internet-based protocols. For instance, blockchain can be used as an application in the EDI to transfer data securely, and multiple trading partners can access data simultaneously. EDI is estimated to provide an easy way to keep track of transactions and assets. It also improves security and ensures quick and easy access to information. Some top players in the market are offering advanced EDI solutions, such as a fully-embedded EDI solution provided by SPS Commerce, which can help merchants receive thousands of orders from various retail organizations within two business days. True Commerce provides a cloud-based EDI solution for Microsoft Dynamics 365.
Key Challenges Faced by Electronic Data Interchange (EDI) Solution Market Players
- Businesses are currently changing their existing processes, which were previously built around paper. Changing from paper to an EDI platform is difficult for some companies. Large players in the market are quick to adopt EDI platforms, and also integrate their processes with advanced technologies. Companies perceive that EDI has considerably high legal standards, which also hinders the EDI market. Several smaller businesses deal with larger organizations; large organizations are more inclined toward adoption of document standards, which would lead to an interruption in functionality. For instance, some companies follow the X12 standard format, while their trading partners might follow the EDIFACT standard. Furthermore, the initial deployment cost of EDI solutions is high, owing to the implementation, customization, and training of employees. Companies face a shortage of skilled EDI staff and hence, they face challenges in training the staff, since the cost of training is considerably high.
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