Problem: Cost or service concerns

What is the problem?

As your business has grown, the deal that suited you at first is now hurting. Perhaps the pricing model means costs are escalating unreasonably, or you are unable to adapt the service to suit your changing needs.

This is a common problem, and can arise for a variety of reasons. For example:-

• A variable pay-as-you-use model, such as KiloCharacter charging, seemed attractive when you started EDI as the volume of documents exchanged was low. But it is costing you a lot more than is really necessary now that your business sends greater document volumes.
• You may have signed up to a service deal at a very attractive price, but you have since found the cost of changing or extending the services to be prohibitive.

What solutions are there to this problem?

There are three main ways to minimise your costs while growing your usage of EDI.

1. Check your current EDI service provider is trying to minimise unnecessary costs on your behalf.

For instance VAN costs can be very expensive at high volumes, and significantly more trading partners support alternative data communications methods now than even just a few years ago. Ask your EDI service provider if you are incurring VAN costs which they can eliminate by switching to other data communications methods such as SFTP or AS2.

Pros: Switching data communications method is generally straightforward, cheap and safe.

Cons: None.

2. Negotiate a better EDI deal with your current EDI service provider.

The starting point for this, as for any other IT issue, is to determine your wants and priorities, then negotiate a new contract that meets your requirements.

A flexible EDI service provider will want to understand your business priorities as they change, and will be willing to at least discuss a suitable pricing model that meets your changing needs.

Pros: Open discussion between customer and supplier ensures a healthy relationship, and may lead to a new deal that satisfies you.

Cons: The business model of some suppliers may mean that they are unable to offer flexibility.

3. Consider switching EDI service provider.

The starting point for this is to determine your current (and, as far as possible, your future) wants and priorities, and check whether your current EDI service provider is going to give you what you want. Consider increasing the scope of EDI as a proactive strategy, rather than as simply reacting to requests from your trading partners.  Increasing scope may not reduce the direct cost, but it may offer better value, and may also reduce other costs in your business.

Ask your trading partners about the EDI service provider they use, and what they think of the service provided. A reference from someone you know and trust is better than a quote from a salesman.

If your annual costs are less than a few thousands of pounds, and the level of service you enjoy is good enough, it may well not be worth the effort for you to change EDI service provider. However, if you are currently being held back and need to expand, you should still consider alternative providers for the additional needs you find as your business grows.  Our page on Choosing an EDI Provider includes a checklist of considerations and can be a useful resource.

Pros: The evaluation exercise need not take a lot of work, if you find a cooperative service provider. You don’t need to commit to changing provider unless and until you are sure it is in your best interests to do so. Nowadays the risks and costs of switching EDI provider are not as great as they used to be.

Cons: Unless your current service is causing concern, or you can save a lot of money, it may not be worth considering a move.