In-House or Outsource….it’s a question that almost every company has to answer at one time or another regardless of your size. When we look at the options it can be overwhelming, but what are the true pros and cons of keeping your EDI In-house or outsourcing?
Depending on your company size, response time expectations of trading partners, how EDI is perceived as a differentiator within your industry, and other considerations specific to your specific business, some of these may be more/less important to you but they will all factor into your decision.
Realise this is not an exhaustive list of the pro/con considerations, but a small list with many additional considerations as you examine one one route or another in your world. Also realise there are many that use a hybrid EDI and MFT strategy, taking an in-house approach for some components of their business integration solutions and an outsource approach for other components of their solutions.
Keeping EDI In-house Pros:
- Control – You have total control of your own system and trading partners
- Speed – You have the ability to make changes quickly without having to wait or open a ticket to make an update
- Reputation – Your reputation with your trading partners is important in business, they know they can call you when there’s an issue and it will be resolved because it’s a priority to you, they may not always be a priority to a 3rd party.
Keeping EDI In-house Cons:
- Staff – Do you have adequately trained EDI personnel that can address issues in a timely manner
- Maintenance – You are responsible for software maintenance, upgrades, etc. which takes time and money and can take time from other projects
- Monitoring – Having the staff to monitor your EDI system 24/7 and being available when issues arise with nightly transactions
Outsourced EDI Pros:
- Technology – You don’t have to worry about requirements and software/hardware, companies that specialize in Outsourced EDI have all you need
- Requirements – There is no need to worry when a trading partner has special requirements, these companies are set up to handle a wide variety of special needs and circumstances.
- Expertise – This is what they do, it’s their focus and they have the experience and knowledge that your in-house team may not have.
Outsourced EDI Cons:
- Lack of Control – You are leaving a major component of your business in the hands of a 3rd party with virtually no visibility into the EDI system
- Cost – Outsourcing can be expensive and if you have a large volume of trading partners and transactions, those costs can add up quickly
- SLA Issues – If you’re dealing with an off shore company with a major time differential different from many of your partners or company prone to service errors and transmission failures this can be an issue and affect your relationship with your customers in some cases, resulting in fines from SLA violations.
- Migrations – What happens when you are unhappy with the service you are receiving? Migrating from one EDI Outsourcing company to another can be very expensive, time consuming, and complex with the risk of lost orders etc. in the transition.
While some of the pros and cons can overlap, there are still plenty of things to think about. Ultimately the decision has to be about what’s best for your company. Whether you decide you want to take the hands off approach, have total control of your EDI system, or something in between, Appleyard Solutions has wealth of experience that can help you decide which options are right for you and your business.
If you’re still not sure which way to go or don’t want to lose complete control of your system, managed services or co-sourcing is another option. Appleyard Solutions has a number of clients that still house their EDI system but didn’t have the expertise or headcount to hire dedicated resources. In that instance we’re able to provide the client with the appropriate resources to manage their in-house EDI system without the concerns that outsourcing can have.