Retailers and manufacturers such as Target, Walmart and Grainger realize how critical optimizing supply chain processes is to increase business agility, boost service efficiency and improve trading partner satisfaction. Modernizing systems used to handle sensitive communications with supply chain partners is an essential place to start, and Electronic Data Interchange (EDI) is top of the list.
According to a 2011 Forrester Research report, “the annual volume of global EDI [Electronic Data Interchange] transactions exceeds 20 billion per year and is still growing.”
Although EDI dates back to the 1960s, these transactions are still highly critical to the flow of supply chain data in various sectors such as manufacturing, retail and banking. Any hindrances to the speed and agility of these file exchanges (e.g., bills-of-lading, purchase orders, products lists, inventory updates, invoices) can have seriously negative impacts to business performance.
This is the first in a series of blogs that will explain the top challenges of using EDI solutions, the benefits of using a microservices-based architecture for EDI processes and how to set up and deploy that architecture using a modern MFT and iPaaS system.
Top Challenges of EDI in the Digital Age
Many companies are using legacy EDI infrastructure such as Value-Added Networks (VANs) or homegrown systems to translate, transform, transfer and integrate EDI messages between partner and enterprise systems. As the number of trading partners in the supply chain grow and have new technology requirements, companies are encountering the following challenges:
- High costs of maintaining infrastructure – Managing a complex EDI system on-premises requires substantial IT resources to maintain and scale as business requirements evolve.
- Inefficient onboarding of partners – EDI systems that rely on point-to-point connectivity with each partner system make it difficult to onboard new partners quickly, slowing down the time it takes to expand to new markets and launch new products.
- Difficulty monitoring and troubleshooting errors – Many legacy EDI systems don’t have the ability to monitor and control all of the endpoints connected to the enterprise, making it problematic for IT to quickly troubleshoot and fix EDI transfer and integration errors.
- Increasingly difficult backend integration – Many companies are using point-to-point scripts that tightly connect EDI workflows with backend systems. This practice is inefficient and expensive to maintain and slows down the company’s ability to make quick changes to critical or time-sensitive integrations.
Modernizing EDI by Uniting Integration and Managed File Transfer Platforms
To overcome these EDI challenges, we recommend companies utilize two cloud-based technologies that can easily scale and manage the flow of EDI messages with trading partner systems: Integration Platforms as a Service (iPaaS) and Managed File Transfer (MFT).
Due to the complexity of using traditional EDI systems, companies are increasingly turning to the use of APIs to exchange EDI data with partners. iPaaS solutions like MuleSoft® and Boomi currently offer the most modern way for companies to manage EDI integrations and enable a microservices-based architecture with reusability, security and governance.
“Expect more organizations to use APIs for B2B integration soon enough… there won’t be a reduction in EDI transactions, but increasingly APIs will be used to manage EDI-based transfers,” states an article published in TechTarget’s SearchAppArchitecture.
MFT systems can be used as the send/receive component within an enterprise EDI infrastructure to manage the exchange of EDI documents. Using an MFT system that can easily connect with iPaaS solutions is ideal for EDI since it can be used to manage high volume file transfers to guarantee delivery, secure data and track all activity.
The top business benefits of integrating MFT with iPaaS for EDI are accelerated partner onboarding; precise control and monitoring of EDI file transfer activities; and streamlined/simplified integration of EDI processes with backend systems.
Example: Modernized EDI Purchase Order Process Using MFT and iPaaS
A prime example of how MFT and iPaaS optimize EDI business processes is the integrated solution provided by Thru and MuleSoft. The MuleSoft Anypoint Platform™ is deployed as an integration hub to translate, transform and manage the flow of EDI push/pull data from the enterprise. By adding the Thru platform and Thru MFT Connector for MuleSoft (Certified), this flow can be instantly extended to manage high-volume, multi-partner EDI file exchanges.
How Does It Work?
Below is a simple EDI purchase order process diagram showing how Thru can be used by an enterprise to:
- Receive purchase order files from trading partners using a pub/sub model.
- Instantly integrate the MFT workflow with any Mule flow using the Thru MFT Connector for files to be processed.
- Push files back to Thru to send shipping notices to trading partner endpoints.
This solution simplifies EDI because it requires no coding to onboard partners and integrate with enterprise systems. All file transfers managed in Thru can be monitored from a “single pane of glass” dashboard. Thru includes a web-based interface to onboard partners instead of hand coding connections.
Top Benefits of Using MFT with iPaaS for EDI
In addition to increased business agility and elastic scale, there are numerous advantages to using an iPaaS with Thru:
- Automate B2B file transfers for SFTP, FTPS, Amazon S3 and more.
- Use Thru APIs to integrate with iPaaS or use our native connectors for MuleSoft or Boomi.
- Create file transfer workflows using visual dashboards – no coding required.
- Track and monitor activity with system alerts and end-to-end dashboards.
- Guarantee delivery of files with auto retry and recovery.
In our next post, we’ll show you in detail how Thru utilizes a microservices-based approach to EDI by integrating with integration platforms like MuleSoft and Boomi.