ERP Training

March 12, 2024

EDI FAQs – Terminology, VANs, and More

EDI integration

Diving into the why and how of Electronic Data Interchange (EDI) and its application in your business can be both fascinating and daunting. Whether you’re buying, selling, or sharing information, EDI integration streamlines these processes when used with your SYSPRO system. To start, we’ll clarify common terms, jargon, and industry applications. Then we’ll demystify the choice between EDI and API so you can unlock the potential and power of EDI with SYSPRO for your business.

What is EDI?

EDI is a set of document standards that have been in use for more than 50 years to provide a consistent, secure, and reliable method for exchanging transactions between organizations. So, simply put, you can buy and sell and exchange other kinds of information with your trading partners using electronic data interchange. It’s a widely accepted standard, and we’re going to dive into how you can make EDI work with your SYSPRO system.

EDI is based on two primary standards, which describe the format and the content of EDI documents. There are actually many different ones out there but these two are most common: the American National Standards Institute X12 or ANSI x.12 standard, used by more than 300,000 organizations worldwide, and EDIFACT, which is more of an international standard developed by the UN with widespread use in Europe. The SYSPRO EDI solution supports both standards, so you’re fully covered if you have international trading partners.

EDI integration use is pretty widespread across manufacturing and distribution, logistics and shipping, healthcare, government, and retail environments. In fact, 2023 market research results forecast these industries driving up the EDI market to an expected $4.04 billion value. Large organizations like Walmart or Amazon use EDI quite heavily and often make it mandatory for their trading partners to use their chosen EDI to exchange information but market growth also shows adoption by small and medium businesses. You might be surprised how many organizations out there, large and small, use EDI!

Common Terms for the EDI Environment

As with any technology, there are some common terms used across all providers. For easy reference, we’ve summarized the most common ones that you’ll come across as you explore EDI integration options or work with an EDI system:

EDI File
At its simplest, it’s a text file that has been properly formatted to contain all of the elements to describe a business transaction.

Trading Partner
The person that you are exchanging information or documents with. They may be your customer or supplier – it can be anyone in the supply chain.

Map/Mapping Guide
This is a specification of the specific implementation of a particular document standard. So a purchase order for Walmart, for example, would have a mapping guide that gives you all of the information on what they expect to see included in their purchase order that they send out and then the responses that come back during implementation to make sure that includes all the needed information.

VAN (Value Added Network)
The term for the many organizations out there that provide additional services to support and facilitate the exchange of EDI documents. You can think of them as a “traffic cop” for EDI transactions, and what they do is they make sure that things are secure, flow smoothly, and that if you run into problems, you have a place to go for support. IBM Sterling, SPS Commerce, and True Commerce are examples of VANs, and SYSPRO fully supports use of a VAN.

The software that bridges the raw x. 12 data that the trading partner sends and your ERP system, like SYSPRO. Cadacus is the translator used in the SYSPRO environment; there are many different translators out there.

FTP (File Transfer Protocol)
A long-time method for communicating securely between two computer systems, either client or server. It’s a protocol that’s been around for quite some time and fully supported in SYSPRO.

Applicability Statement (AS2)
A relatively newer standard that’s still been around for quite a few years and is a secure transmission method that allows you to directly connect to your trading partner’s network to send and receive documents very securely. It uses a certificate-based security system and multiple levels of encryption.

B2B (Business-To-Business)
An industry term that we hear a lot, and it’s often a goal or objective for a company to automate and facilitate B2B transactions to help run their business.

IPaaS (Integration Platform as a Service)
A newer revolution in the EDI world that allows you to facilitate the exchange of documents using a web-based set of tools that determines rules, and so forth, between separate systems.

The process of integrating a trading partner into your EDI environment. Co-opted from the human resources world, in this case, we’re talking about bringing on your trading partner and getting them live in your environment so that you can exchange documents.

Is EDI On-Premises Only?

All businesses are accessing a private or public cloud, and according to Gartner “85% of organizations will embrace a cloud-first principle by 2025.” So, if like so many, you implement SYSPRO as a cloud-based solution, have no fear. The Cadacus software integrates with the web-based solution as the communications piece in a cloud-based environment. As long as the file locations are accessible, you just need a path to where the files are stored and where to retrieve them.

If you’re in a fully web-based environment, you may want to look at a VAN-based solution to provide the storage location for the trading partners’ documents. Options like CLEO or Dell Boomi have a web-based solution that SYSPRO will support, so you’re definitely not limited to on-premise to work with EDI.

We have many years of experience implementing SYSPRO in an EDI environment, so if you have questions or concerns about your EDI integration with SYSPRO, feel free to reach out to any of us.

Which to use – VAN or Direct EDI?

VAN (Value Added Network)
The VAN is the go-between for you and your trading partner that makes sure that standards are adhered to and that you have all the tools needed to be successful with your EDI. An important point is that you can use a VAN with SYSPRO, but you don’t have to. You have the option of going through a VAN or through a direct connection to your trading partner, and SYSPRO fully supports both.

Direct EDI (AS2)
The one element with direct EDI is that it does require that both organizations have systems that support the AS2 standard. To get specific, when you’re going for a direct connection, it will be either FTP or AS2. FTP is supported directly within the Cadacus program (the Translator). For AS2 support, we also typically add a software solution called CLEO LexiCom that provides the AS2 communications. If this is getting too complicated, please reach out! We don’t want to overwhelm, but we also want to give you as much detail as you might need.

How to Choose?

You have lots of options there for how you communicate with your trading partner. One advantage of direct EDI integration is that after the upfront costs, there are no transaction-based fees whereas most VANs charge a smaller upfront fee, and then monthly transaction-based fees. As your company has more exchanges, those charges will increase. With direct EDI, it doesn’t matter if you’re exchanging 1000 documents monthly or 100,000 — there are no transaction-based charges. So, volume is a consideration on whether you go direct to EDI versus VAN.

So, that’s all there is to it. Simple, right? We kid! We know it’s a lot to take in, and we’ve been working with EDI in the SYSPRO environment for years! With this broad overview, you’ll know if it’s the right fit for your business. We’re also here for you if you want to reach out with further questions about implementing EDI integration (or anything else SYSPRO-related, for that matter!)

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