Should EDI Be Outsourced?

Today’s CIO has more on their mind than merely keeping their company’s data safe from hackers, which isn’t easy in light of the lightning speed technology is advancing. Matters such as BYOD, shadow IT, cloud migration and virtualization also tug for attention, but even that’s not everything a CIO has to master.
Technology has proven both a blessing and the bane of the CIO’s existence. The electronic transfer of vital information, such as invoices and supply chain data, is immeasurably impacted by EDI, the electronic data interchange. If the systems running EDI aren’t functioning with exact precision, a company can lose market share and even be penalized for missing contractual obligations for the late or missed delivery of goods and services.

In fact, there are multiple points of potential failure along the supply chain that create risks and uncertainty. In Deloitte’s report ‘The Ripple Effect‘, supply chain hazards of import to the CIO and anyone else charged with overseeing a company’s supply chain are highlighted. According to the report, today’s risks to the supply chain are becoming increasingly costly. As a result, 71 percent of executives surveyed for the report said supply chain considerations play an important role in their company’s decision-making processes. The complexities of managing supply chain technology has become such a risk that many executives believe it should be outsourced, rather than tackled within the organization.

The move toward managed services in general continues to gain popularity as companies look to leverage the expertise of service suppliers dedicated to specific functions and technologies. This is particularly true when the technology is critical to the business despite not being their core competency, which is often the case with EDI. Outsourcing can remove the uncertainty of internal personnel issues, hardware and software support, and even connectivity issues from internal budgets to predictable contractual agreements.

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