For a business that is part of a supply chain moving to an EDI system is fast becoming essential. A lot of companies implement EDI due to an upstream requirement from a customer or vendor. However, it is then that they understand the massive benefits to the organization and the vastly increased potential for leveraging EDI to grow. For organizations that have not yet thought about migrating to an EDI system, there are two choices: purchase EDI software for use in-house or outsourced to an EDI service bureau.
The main benefits of using an outsourced EDI service bureau from an organization is cost. Outsourcing the use of the software will save you the upfront capital costs. While you could end up paying more in the long run, there is an inflection point at which you can decide to move the operation in-house.
To justify the large capital expenditure for an in-house EDI implementation, you will need to consider to volume and type of activity. An organization with a lot of trading partners and a large volume of transactions will see financial benefits from purchasing EDI software. The process is costly because you will need to make the EDI software and your legacy systems work together.
It is difficult to determine an exact point that it makes sense to transition from a service bureau to an in-house system. However, as a general rule, if you have a 100 trading partners and thousands of transactions a week, it makes sense to purchase the software.