Written by Act Data Services, Inc. 1-800-ACT-DATA

In order to financially justify the implementation of an EDI system, a thorough cost analysis needs to be done. That cost will depend on which type of EDI system you go with, an in-house system, or with the use of an EDI service provider. Here are a look at the two systems:

In-house

An in-house implementation has been by few of the larger organizations. There are several advantages to this approach. Namely management of the system, control and security considerations. The investment to get edi compliance will be significant and the following systems will need to be setup internally:

EDI software
Communications software
EDI transmission methods
Mapping and translation software
EDI and mapping specialists
Ongoing upgrades, support and maintenance

VAN/EDI Provider

Third party providers will need to be judged based on different criteria. A prime consideration would be the number of partners  present on the vendor’s system. Another would be international support for overseas partners. Some will also provide training and support for your staff directly. They should also be able to provide options on getting your partners on board EDI.

In terms of financials the providers tend to charge on volume of transactions, while offering differing payment models. The payment models are usually annual, monthly or pay as you go.

Based on the above, it appears that an in- house system will make the most sense for larger organizations that will be able to recover the significant investments. Smaller businesses will be better served by using a provider.

Act Data is an web based edi provider for retail and supplier environments.