Today, the vast majority of electronic business transactions take place using technology called EDI, or electronic data interchange.
EDI systems have grown tremendously in popularity over the past decade, playing a major role in a wide range of industries. Recent analysis from Grand View Research states that the global EDI market specifically for health services reached a valuation of $2.7 billion USD in 2016.
So, what is it that’s driving this massive growth in the popularity of EDI systems? EDI software, such as the recently launched XEDI, can provide a wide range of benefits for small, mid-sized and enterprise businesses.
The biggest of these is an improvement in accuracy and reliability. Data shows that use of EDI systems can lead to a significant increase in data quality, with some sources noting a 30 to 40% reduction in transactions that contain errors.
Many of the errors eliminated by EDI are specifically related to human input. Most data on the benefits of EDI systems specifically note a reduction in errors from poor handwriting, lost and misplaced documents, human calculation errors and data entry mistakes.
Because EDI systems improve accuracy, they also have a measurable effect on the speed of the business cycle. By using EDI, many mid-sized and enterprise businesses are able to speed up their business cycles by as much as 61 per cent.
There are also smaller efficiency improvements made possible by EDI. Since EDI systems let businesses automate paper-based tasks and rapidly process documents, staff are freed up to spend more of their time on mission critical processes.
From a strategic perspective, EDI allows for faster, more accurate decision making, as the use of EDI technology gives management staff a greater level of transparency into transactions and ongoing operations.
Finally, there are cost benefits to EDI. EDI transactions are paperless, eliminating paper, filing, storage, printing and other costs. Logistical costs, such as postage and document retrieval, are also largely or completely eliminated using EDI technology.
Because EDI is automated, there are also significant reductions in the labour costs associated with each transaction. Many companies have noted cost reductions of 95% or more as a result of managing orders, purchases and invoices electronically.
In short, there’s no shortage of reasons for the rapid movement of businesses from traditional, manual data interchange to EDI. Unlike other cost-cutting measures, EDI improves results and produces a higher quality business, all while reducing expenses.
Until recently, EDI systems were primarily used by large businesses with the scale to notice a measurable improvement from automation. Now, EDI is rapidly becoming a key part of many small and mid-sized businesses.
Software such as XEDI, which offers EDI platform access for individuals and small businesses, is beginning to disrupt the space. Today, small and mid-sized businesses can afford to switch to EDI without being restricted due to budgetary limitations.
As a result, we expect to see the 85% of business transactions that currently take place using EDI to continue moving towards 100%, potentially at a faster pace than ever before.