CHAPTER 8 EDI IMPLEMENTATION
8.1 Introduction
Planning for its implementation is an important factor for success. With
strategic planning on how EDI is to be applied, the resultant impact is
likely to be much more significant than results achieved from pockets of
implementation which are not properly planned and integrated into existing
operations.
This chapter provides step-by-step guidelines to initiate EDI implementation,
from reviewing the need for EDI to deciding on the technical solution to
implementation issues.
8.2 Identify organizational needs for EDI
First, study the company's existing workflow and how it can be improved
using EDI. Identify bottlenecks of current systems and explore how EDI
can be used to dissipate the bottlenecks. This study should attempt to
cover the whole range of data and information flow through the entire company
and not be limited to known EDI applications.
As part of this exercise, one should also identify opportunities for streamlining
current workflows across organizational boundaries in order to take full
advantage of the introduction of EDI.
One example of such streamlining and re-engineering of current workflows
is the quick response concept which is fast being adopted by the retail
and manufacturing industries because of its wide-ranging impact on customer
services and the companies' bottom line. By fully integrating the collection
of point-of-sale information and automation of reorders directly from the
manufacturing plant based on customer buying patterns, systems across the
distribution chain can be programmed to trigger off chain reactions from
the manufacture of goods to delivery and sale at retail outlets, with minimum
inventory in stock. This implies a change in the in-house systems of retailers
and manufacturers to accommodate the new concept of procurement.
8.3 Weigh the cost and benefits of EDI
Having identified the areas in which EDI implementation can help to dissipate
bottlenecks and improve workflow, one should then weigh the benefits of
EDI against the costs of setting up the system.
The costs of EDI implementation go beyond start up costs of acquiring the
EDI software and hardware components and training. Ongoing costs such as
VAN usage charges, maintenance and support costs need also to be taken into
account.
8.4 Identify EDI business partners
Next is the identification of the business partners with whom to implement
EDI. The following factors should be considered:
(1) Which of the business partners have the highest volume of transactions?
(2) Which of these business partners have the right prerequisites for EDI?
(3) If they are overseas business partners, do they have the right environment
for successful EDI?
(4) Do these partners enjoy a good business relationship with you?
(5) Are they going to be your long-term business partners, thus warranting
the EDI implementation?
(6) Do they have the same ideals and goals towards EDI?
Upon identification of business partners, discussions with them about the
possibility of establishing an EDI link to replace the current transmission
medium then needs to be initiated.
8.5 Obtain top management approval
EDI implementation is a strategic business issue. EDI impacts the way
business is conducted. A successful EDI system integrates all functional
processes of the business across departmental boundaries.
It is therefore crucial that all parties involved in the EDI system be
committed to its success. Obtaining top management approval of the EDI
implementation ensures that the EDI implementation is a overall company
objective. Top management will also have the authority to approve the
necessary resources required for the implementation and can set directions
for implementing EDI strategically across departments.
8.6 Form a EDI project team
As EDI is not merely a technical exercise of converting paper documents
to electronic messages, EDI implementation involves not only personnel
with the necessary technical expertise, but also those who are experts in
their areas of business. An EDI project team needs to be formed to ensure
that the requirements of all parties are addressed, and to ensure that the
implementation is well managed and on schedule.
The EDI project team can be headed either by an in-house expert (with IT
and EDI experience) or by external consultants. The project team will coordinate
overall project activities, ensure project scope is adhered to, plan the
implementation and monitor its progress as well as resolve issues with users
and vendors.
8.7 Education and training
Prior to the implementation of EDI, education and training programmes should
be put in place as a vehicle to communicate corporate attitudes about EDI.
The training and education programme can also be used as a power tool to
demonstrate senior management support of EDI. These programmes prepare
people for the changes that are forthcoming.
An EDI training programme prior to EDI implementation could cover basic
concepts of EDI and the benefits EDI can bring about. The training programme
should also address concerns which staff may have in EDI implementation,
such as redundancy of employees. This serves to allay any fears or apprehension
of staff in embracing the technology and harnesses commitment to the eventual
EDI implementation.
An EDI training programme nearer to the date of implementation could cover
specific areas of user operation, the EDI environment as well as how to
use the system.
A third category of training programme can be developed specifically in
the technical areas to prepare the technical staff for the maintenance and
support of the system.
8.8 Decide on EDI standards
It is necessary for organizations embarking on EDI to adopt a common set
of standards for communication. If this is not done, one of the major
benefits of going EDI will be eroded.
Hence, the set of EDI standards to be adopted in your EDI implementation
need also to be agreed upon by you and your business partners. UN/EDIFACT
is the prevalent global EDI standard used in most countries today.
8.9 Decide on the connection options
The various possibilities of running your own EDI system should be investigated.
Are you building your own proprietary network or selecting a third party
VAN? If you are making use of a third party VAN, which one? Factors determining
how to select a VAN which will meet your needs is discussed in chapter 5.
8.10 Implementation planning
With your business partners and VANs identified, and the EDI application
prioritized, implementation planning comes next. An implementation schedule
is to be drawn up so that all parties are aware of all actions required
and the time-frame allocated to each task in order for the EDI implementation
to be realised. At this stage, you should also decide whether or not
to plan a pilot implementation and which approach should be taken towards
full implementation.
8.11 Conclusion
In conclusion, a successful EDI implementation requires not only good strategic
planning, but a will to change and a determination to succeed in concert
with all the parties in your company as well as your trading partners.
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