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EDI hub as group-wide integration platform

In medium and large corporate structures, one must sooner or later face the challenge of providing a uniform integration platform to harmonize data traffic in a heterogeneous IT environment. Minimizing effort while simultaneously maximizing synergy effects requires an EDI platform that not only facilitates the connection of customers and suppliers to all participating entities, but also maps customer/supplier relationships between individual parts of the company.

With regard to the evolution of EDI data traffic, a typical development pattern is clear with different variations for nearly all corporate networks:

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Customers as initiators of EDI data exchange

Generally, it is requirements from customers that induce most companies to initiate construction of an EDI infrastructure. In the meantime, EDI capability has become an important building block for supplier assessment in many industries. A few years ago, this applied primarily to the automobile industry. Today, however, participation in electronic document exchange is also an important prerequisite for successful, long-term business relationships for trade and retail, as well as for all industrial production. As a result, there is great pressure on companies to improve customer satisfaction by providing EDI processes and to use EDI as an instrument to improve customer loyalty and support sales activities.

Precisely in negotiations with potential new customers, it is helpful to offer sales the possibility of an EDI connection as an argumentative benefit, paired with the ability to clearly calculate the anticipated expenses. In advance, the first goal must therefore be to overcome the technical hurdles of ERP and EDI interfaces and guarantee a smooth flow of EDI process chains

GENERALLY IT IS REQUIREMENTS FROM CUSTOMERS THAT INDUCE MOST COMPANIES TO INITIATE CONSTRUCTION OF AN EDI INFRASTRUCTURE.

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Synergy effects thanks to supplier integration

The next logical step along the path to digitalization for many companies is to leverage the experience they have gained in setting up the necessary ERP interfaces and processes to then in turn request that their suppliers communicate via EDI. The investments already made in constructing an EDI infrastructure are now also available for supplier integration. It therefore makes sense to use this basis in order to profit from the benefits of digitalizing supplier-side processes. For the realization of potential savings, incoming processes are a particular focus.

A successful strategy for supplier integration consists of the combination of different possible components. However, the core of every variant is the supply of a company’s own ERP system with valid EDI data since each processing of an incorrect document creates extra effort for manual reworking.

Digitalization of logistics chains

The digital transformation of logistics processes is frequently driven by logistics service providers themselves. Precisely classic processes such as transport orders and status messages serve to address the increased requirements of supply chain management (just-in-time). Here, it’s most important to save time in order to enable close interlocking of the supply chains.

The second level in this segment is to connect external warehouses. Very few companies maintain their own warehouse capacities today, but instead have them organized by specialized service providers. In order to make optimum use of these capacities—and in particular to control them—EDI messages tailored specifically to this segment form the backbone for organization of incoming and outgoing processes involved in warehouse management.

The elements of the EDI evolution described above can occur in different variations and intensity. In the end, however, this is always a one-dimensional view where an ERP system is confronted with a varying number of EDI partners and processes via suitable interfaces. This vertical projection level dissolves, however, if new parts of the company have to be incorporated into the examination of a comprehensive EDI strategy.

WITH THE ACQUISITION OR FOUNDING OF NEW PARTS OF A COMPANY, HETEROGENOUS IT STRUCTURES EMERGE, WHICH HAVE TO BE INTEGRATED INTO A COMPREHENSIVE STRATEGY.

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With success, the complexity of EDI processes increases

With the acquisition of new parts of the company or the founding of sales companies or new production locations, the organization of EDI data traffic takes on new dimensions. When existing companies are purchased, in most cases the existing IT structures are also taken over (i.e., the ERP systems on site and, if necessary, the existing EDI structures with the above-mentioned EDI process chains).

When establishing new entities, the ERP systems used may be specially tailored to the needs of the sales and production requirements in question. This results in heterogeneous IT structures that have to be integrated into a comprehensive digitalization strategy. Internal customer/supplier relationships are also created, which may produce high-volume document traffic that also has to be digitalized. The most important business processes have to be organized for all parts of the company in such a way that the ERP systems of all structural elements of the company in different roles can communicate digitally, both with one another and with customers and suppliers.

One interface for each business process

Even with a uniform ERP system across the company, there is a need for digital synchronization due to different release states, master data, etc. Distributed manufacturing structures create process chains that require a great deal of digital flexibility from all segments of the company structure.

The primary task is thus, within the company network, to define a uniform semantic standard per business process, one that can serve as the ‘master interface’—regardless of the format of the interfaces used—to harmonize the document flows between individual parts of the company and at the same time serve as the basis for all EDI connections to external customers and suppliers.

Easy synchronization of a wide variety of ERP systems

Easy integration of external customers and suppliers

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Comprehensive integration of digital business processes

The challenges companies face today with regard to the digitalization of their business relationships have been described above. Consulting companies have created lucrative fields of business based on these requirements, just for disentangling and consolidating the sometimes very complex structures.

Softzoll takes a very pragmatic approach here in order to achieve quick successes as part of a company-wide digitalization strategy and fully exploit potential savings. The first concern is to identify all internal participants in the company-wide digitalization. These are generally all parts of the company that:

  • … maintain digitalization-worthy customer and/or supplier relationships with one another.
  • … have to implement external business partners’ requirements on the customer and supplier side in order to connect business processes digitally via EDI.

After the group of people immediately affected has been identified, the required business processes have to be defined. In addition to the different IT departments, representatives of purchasing and sales should also be incorporated into these internal consultations.
The following questions should be answered in direct discussion beforehand:

  • Which business processes are indispensable in order to realize digital communication within the corporate group?
  • What requirements do customers and suppliers have for the relevant parts of the company?

Generally, the following processes emerge and are reflected in various combinations in every internationally operating corporate group:

  • Orders and/or delivery schedules
  • Order confirmations
  • Delivery notices
  • Invoices

About 70% of a company’s digital data exchange results from these four or five core processes.

Process documentation as blueprint

The next task is the semantic definition of the desired business processes. The format of the company-internal ERP systems participating in each individual case and the customers’ and suppliers’ desired participant-specific EDI formats do not yet play a role in this step.

Each participant in the company-wide EDI hub under construction has to be able to answer the question: what data is required for processing of the respective processes. As blueprint, Softzoll provides documentation for each business process requested; it specifies about 90% of the relevant information that is exchanged digitally worldwide today. It can then be adapted to suit individual requirements. The result is company-wide process documentation in which all data is defined per required business process.

Technical implementation of the integration concept

The technical implementation of the company-wide EDI hub is the logical continuation of upstream processes. Based on the process documentation created, each part of the company ensures that it can process all jointly defined incoming and outgoing content. This is where the interfaces to the various ERP systems come into play. Using the documentation, each participant is obligated to parameterize the interfaces and make them available on the corporate hub. This is done either by internal experts who have the relevant knowledge or by external service providers. The format of the interface in question is irrelevant; what counts is the focus on the semantics of the individual processes.

Heterogeneous ERP interfaces—one data pool

The ERP interfaces created this way by the various company participants are made available to Softzoll in order to facilitate direct integration of the participating ERP systems into the corporate hub. Using this interface documentation, Softzoll integrates each company member into the central data pool, which now has synchronized semantics per business process. Technically, the central data pool is represented by a relational database that has a uniform field assignment per business process. It integrates each participant’s data regardless of the format of the connected ERP system, for both incoming and outgoing processes. Thus, no conversion to an intermediate format is required in order to guarantee communication between different parts of the company. Another positive side effect is that participating ERP systems with an identical interface only have to be integrated once. All participants with identical ERP interfaces can be integrated easily via a workflow copy.

Data consolidation on the process level

The resulting data pool now serves to connect external customers and suppliers. Here, it only has to be checked whether all relevant content for the customer or supplier in question is included. If necessary, Softzoll can enrich this data partner-specifically with additional content via a special consolidation level. The important aspect in this approach is that content expansions of ERP interfaces are also performed only once per process. This means that the ERP system in question always transmits the maximum amount of data to the central data pool of the EDI hub. From then on, this content is available to every potential recipient.

Add new partners and processes without restrictions

To connect customers and suppliers, an EDI partner also only has to be integrated once. Once connected, these external EDI partner connections are available immediately to all participants in the corporate hub.
This procedure has proven extremely effective and cost-effective too: the cost of a company-wide EDI solution is usually in the mid six-digit range. Softzoll connects business partners around the world to a company-wide EDI hub for a fraction of this!

Your data pool in a certified computer center

The required technical infrastructure is very simple: the central basis is a dedicated EDI system in Softzoll’s Berlin computer center (ISO 27001 certified). There are no license costs for Softzoll’s EDI system; it is unrestricted with respect to both technical and commercial aspects, and it can be scaled at will. Any number of clients, external customers, and suppliers can be integrated without the usual re-licensing and associated costs.

Simple scaling of homogeneous interfaces

Each ERP system with an identical interface is integrated once and can be transferred to any number of ERP systems with identical interfaces by copying the workflow. The same applies for the connection of external customers, suppliers, and logistics service providers. Each external EDI partner is connected once, which means that communication with all desired company locations is guaranteed.
Softzoll provides all required ERP templates and EDI partner profiles for all ERP systems and EDI formats at a fixed price; the costs for the roll-out or integration of new ERP systems and EDI partners are therefore transparent and much easier to calculate.

Global monitoring—company- and user-specific views

An included, multi-client-capable EDI transaction monitor provides a global overview of all participating companies/company instances. A wide variety of configuration possibilities ensure that only transactions for the relevant instance are displayed. If necessary, monitoring down to the department or operator level is possible. Here, a user only has access to a particular processes and/or partners.

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We will be glad to help you with the company-wide integration of your business partners with Softzoll’s central EDI data platform.

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