Last year, we celebrated 20 years in EDI for two of our founders and directors, Steve and Marc. In today’s blog, we talk to Marc about his experience in the industry and the future of EDI.
Can you believe it’s been 20 years?
20 years is a long time but when I look back it seems like it was only yesterday I was starting my first job in the EDI sector. Since then, many things have changed. 20 years ago, there was no Facebook, Twitter, LinkedIn, Google or Amazon. Mobile phones were no longer bricks, the race was on to see who could make the smallest phone possible and they certainly didn’t have the functionality they have now. And of course, the internet was starting to connect people all over the world, but progress was very slow. Technology has, since the year 2000, changed at an ever-increasing rate.
What did the EDI landscape look like 20 years ago?
20 years ago, EDI was 30 years old (I suppose we should have celebrated 50 years of EDI last year actually!). Some considered it old hat and thought new technologies such as XML would replace it – well it’s still here and being used by more and more companies throughout the world.
Organisations employed people to use programs that were installed on corporate networks to map data between file formats. The programs would connect to a VAN (Value Added Network) via a modem – a dial-up piece of equipment that connects over a telephone line – and dial a local number. Data was sent and received with the computer at the end of the line and then that computer would share the data with the rest of its internal network. The data could then be delivered to the recipient, when they connected to the network.
The communications all had to be initiated by the companies wanting to send and receive data and was called polling the mailbox. Companies used to check their mailbox every hour or so for any new data (a bit like checking your letter box every hour for post) and would submit any data they had to send. When the data was received it was passed through a translator and out would pop the data in a different file format, to be passed onto internal systems. EDI was simply seen as a translation and communication tool.
What’s changed since then?
In the late 1990s, the internet was just starting to take shape and companies were looking at how they could utilise a more connected world. My first job in EDI was as a developer, for a start-up company. The owners had a background in selling EDI translation software and the vision to take the data exchanged and provide direct integration with ERP solutions that companies used for orders and invoices. The software was still a desktop product and needed to be installed within client environments but the direct integration with Sage, Exchequer, Opera and more was ahead of the competition. So much so that they won the Sage Innovation Award in 2002.
As the internet started to gain speed and broadband started to be rolled out, companies started to use a communication protocol called AS2. AS2 allows companies to transmit data directly to their recipients without the need for the modems, dial-ups and VANs (Value Added Networks). The take up was slow, however, as broadband hadn’t reached every part of the country, only a few major retailers took it up.
In the mid to late 2000s, as the internet became mainstream and coverage and speed started to become acceptable, companies started to engage with web-based, EDI solutions. Most of these solutions only performed communication and file transfer facilities with the ability to turn one message into another, i.e. Orders into Invoices.
Most of the solutions only dealt with Trading Partners in the traditional way, using VANs and AS2 connections to exchange data. VANs started allowing their clients to communicate over the internet, rather than using dial-up modems which allowed for faster transfer speeds.
Where is EDI now?
Believe it or not, the EDI systems developed in the late 1990s are still being sold by some of our competitors. Other companies are embracing the Internet and have developed solutions that only run over the internet, with no software to install within the client’s environment. Solutions are being built using ERP API/Web Services, to provide direct integration in and out of ERP systems. In the connected world of the internet, access to data from any device anywhere in the world is crucial and companies are making their solutions available via Internet Browsers.
There really is a mix of different solutions on the market right now – those that are installed within the client’s environment, those that are cloud-based only, as well as hybrid solutions. If companies want to thrive going forwards, they will need to cover both cloud-based only and hybrid options for the foreseeable future, as many ERP solutions and clients still use some form of on-premise ERP solution.
What does the future hold?
The future is definitely cloud-based. ERPs are all moving to this model and it doesn’t make sense to have some software installed in a client’s environment to communicate over the internet to exchange data with Trading Partners, perform translation within the client environment and then communicate that data with the online ERP solution.
Let’s look at an example. Imagine a Trading Partner generates an order in their internal system. This is translated into EDI and submitted via AS2 over the internet, direct to the recipient’s EDI solution (in the cloud). The EDI solution performs translation/validation on the data and then pushes the order data directly into the ERP solution using Web Services, all over the internet. No data touches the client environment and no human has been involved in the processing. This is true machine-to-machine connectivity. Throw in the numerous eCommerce web sites and integration over the internet and the shop front is online as well. Put into the mix automated workflow processes, robotic pickers and delivery drones and the future of fully automated deliveries will be here.
Imagine the day when you can place an online order which is delivered to you on the same day without a human even touching the product you’ve just bought. It’s not that far off, Amazon are already trialling delivery drones, robotic pickers are already in use by some companies and same day delivery is being offered as well.
Is EDI going to become obsolete? No way. EDI integration will be the glue that holds all these processes together. It might come to be known as machine-to-machine connectivity, but EDI is here to stay. At NetEDI, we provide cloud-based only and cloud-based hybrid solutions, and we’re also ready for the future of cloud-based, automated processing.