The Changing EDI Landscape

For over 50 years, Electronic Data Interchange (EDI) and its underlying standards have been providing the groundwork that has enabled the exchange of data via electronic means. For such an embedded set of standards it’s counterintuitive to think that new EDI strategies, business practices, and tactics are evolving every year. At Kissinger, we are constantly at the forefront of new EDI ideas. Awareness of EDI industry trends and strategies is part of who we are.

Our question for customers is always this: Are you riding the change, or running from it?

Just as standard business practices are always evolving (not to mention the constant evolution of communications software), EDI communication methods and models are always evolving too. The most successful companies are using that change to benefit their bottom line. Relatively new markets like Amazon tend to find it easier to “ride the change,” as their practices and standards are very much still in flux.

Amazon’s relationship with Vendor Central is at the core of who Amazon is. Manufacturers and distributors use Vendor Central (a web interface) to sell on Amazon. In a sense, they act as bulk suppliers to Amazon. That relationship seems like a tried and true, very basic EDI framework – inventory lists, shipment tracking, invoices, etc. Information communication that used to be done on paper turned into digital communication, much the way Amazon has turned brick-and-mortar sales into a digital marketplace.

And yet, Amazon has put tremendous pressure on traditional sales companies to compete. Their approach utilizes – almost completely – EDI methods to begin, close, and track sales, though they also see the value in web based, API integrations for data transfer (i.e. Seller Central). The magic recipe seems to be a balance of old and new technology command. For Amazon, being at the very forefront of change in communication has earned them enormous success. Academics will study the rise of Amazon for years to come.

At the opposite end of the spectrum stands one of the most recognizable brick-and-mortar empires of our time: Walmart. In 1950, Sam Walton began his legend by purchasing and opening Walton’s 5 & 10. 67 years later, purchasing at Walmart is a routine of most Americans day-to-day lives.

Despite its storied history and fabulous success, Walmart is not running from a changing EDI communication marketplace. They have a vast digital communications infrastructure utilizing the AS2 communication method and standard EDI technologies to boost their brick-and-mortar sales and compete with Amazon’s online empire. Only recently has Walmart ventured out into the web space with the acquisition of Jet.com a marketplace that only uses API integration and not EDI (for now – there are rumors that Jet.com will piggyback on Walmart’s EDI via AS2 infrastructure.

Both Amazon and Walmart seem to have tracked and utilized an EDI strategy that we at Kissinger prize very deeply: bidirectional EDI usage. Like all effective communication methods, EDI does not exist as a one-way-street. Vendors communicate with consumers, and consumers communicate with vendors. Using EDI to capitalize on the consumer to vendor communication, rather than just the vendor to consumer, has allowed Amazon and Walmart – behemoth companies by any account – to 1) save time and money by moving much of their consumer communication digital, 2) track consumer communication allowing for better monitoring of trends and potential emerging crises, and 3) maintain a robust community for their online consumers.

Whether we like it or not, the EDI landscape is always evolving and shifting. New technologies and methods can provide companies with better tools to build a better bottom line. At Kissinger, we pride ourselves in our understanding of and presence in that changing landscape. Don’t run from change – let Kissinger help you ride it.

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