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Building EDI In-house: Pros, Cons, and Hidden Costs for Small Businesses

If you are a small business experiencing growth and are now being asked to be EDI compliant by your customers, you must be facing the critical decision of whether to build EDI software in-house or invest in a third-party solution. EDI for small businesses is vital for automating data exchanges, ensuring compliance, and integrating with trading partners. While building a custom EDI solution offers control and customization, it comes with significant challenges and hidden costs.

There are some questions you should be asking yourself before starting to build your own EDI solution like—
1) What is your focus? Is it to generate revenue by selling more of your products or you think you should invest your time in building an EDI solution?
Remember, there are many third-party solutions that have already done the legwork that you can always use for a fee.

2) Do you have experience building an EDI or any software? Do you have experience on team?

3) Do you have experience in EDI to understand what that consists of in terms of fitting in your business processes for automation, EDI file formats, types of communication, mapping, conditional rules, errors, data integrity checking and integrating into your backend ERP, accounting, WMS, CRM or TMS platforms?

4) Are you up for all the maintenance and cost required?

When deciding between custom vs off-the-shelf EDI, small businesses need to weigh several factors, including budget, scalability, and long-term maintenance. While a custom EDI solution may offer more flexibility, the cost of developing an EDI system and maintaining it over time often outweighs the benefits for small companies.
On the other hand, off-the-shelf EDI solutions provide immediate scalability, security, and compliance, allowing your business to focus on growth instead of constantly managing EDI systems. Consider how much IT support you’ll need in the long term, how often you’ll need to update the system, and whether you can afford the ongoing costs associated with EDI development.

A key EDI integration challenge to think about is how easily your chosen solution can connect with your existing systems. Whether you’re building or buying, ensure the EDI solution integrates seamlessly with your ERP, CRM, and other critical software to avoid costly delays and inefficiencies.

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