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Advantages
The biggest advantage to your organization using EDI is the cost savings. EDI is more
efficient than using conventional mail or fax. EDI minimizes data-entry errors, reduces labor
costs, and increases the timeliness of transmitted information.
Let’s consider what happens in a paper world. Typically, one company generates an
order on a computer that is sent to a vendor. When the order gets to the vendor, the
mailroom handles it before getting it to the sales department, which then assigns it to a
clerk who types the order into the company’s own computer system.
This process, illustrated in Figure 6-9, is very slow (you have to print the order, mail it,
and wait for it to work its way through the other organization) and prone to errors (the
order can be misplaced, the clerk can enter the data wrong, and so on).
By using EDI, the document can be sent computer-to-computer, thus eliminating a lot of
the steps where trouble can happen. EDI reduces the time it takes to receive and handle the
order from a few days to a few seconds.
This speed not only saves labor hours, it also allows companies to better manage their
inventory through speedy replenishment. What’s more, the customer can be quickly
invoiced, and customer service is enhanced.
Obstacles
Like so many other facets of going paperless, EDI’s biggest obstacle isn’t the technology, but PART III
reengineering human work habits.
Cost is another barrier to EDI. The initial expense of establishing an EDI setup can lead
organizations to believe that they’re better off filling out forms. The expense comes from
implementation, customizing the system, and training employees.
You can make sure EDI is right for your business by figuring out if the initial costs will
outweigh any future savings. For instance, a company that receives only a handful of orders
every year might not reap the benefits of EDI.

The order is mailed to
your partner.

Your order goes through Your order is received and
your mailroom. processed by your partner’s
mailroom.

You type up an order. The order is retyped into
your partner’s system.
FIGURE 6-9 EDI streamlines traditional, paper-based B2B communications.