Alpharetta, Ga. – About 60 percent of companies across more than two dozen manufacturing and service sectors report they currently use some form of electronic data interchange (EDI) service or technology, according to a study sponsored by NewEDI. The study also reveals that more EDI investments are planned as the price for the average implementation drops by 16 percent.
EDI has been one of the primary ways for conducting business-to-business (B2B) transactions for more than two decades. The average cost to initially implement EDI was $40,000, according to survey respondents, while the average annual spend for EDI in 2013 was $41,000.
The study reports that companies with less than $10 million in revenue saw initial implementation costs drop 17 percent in 2013, compared with 2010, while companies with revenues of more than $500 million experienced price decreases of 15 percent. The lower “implementation costs might favor smaller companies faced with a higher number of trading partners,” according to NewEDI.
Where are the investments being made? The study finds that 25 percent of respondents use Internet EDI exclusively (AS2 or EDIINT) with no plans to invest in value-added networks (VANs). However, 29 percent of respondents said they use one or more VANs, and 37 percent use both VAN and Internet EDI. The study also finds that 9 percent use Internet EDI but have plans to use EDI VAN in the future.
"EDI remains a valuable technology solution for the growing challenges companies face in supply chain operations and business partner relationships," said Kevin Rathie, CEO of NewEDI, in a statement. "The study indicates that small and mid-sized businesses need help navigating the complexity of available EDI options to find the right solutions at the best possible price.”
The study, "Current Status of Electronic Data Interchange in the U.S.,” was conducted by Professor Richard Vlosky of Louisiana State University. The study focuses on current uses of EDI, reasons for adoption, and strengths and weaknesses of current EDI providers/VANs.
"Widespread adoption of EDI is believed to increase the economic welfare of an industry or a network of companies in a supply chain," said Dr. Vlosky, in a statement. "By understanding the factors affecting Value-Added Network (VAN) selection, companies can more effectively evaluate potential EDI providers, and EDI solution providers can better understand and serve the needs of the market."