Part 2 – E-Commerce and EDI – EDI vs Web
It’s time to compare EDI and Web. Web-based E-Commerce is something most people understand and relate to. By measuring EDI up against Web we get a better understanding what is EDI Commerce and how does it interact with Web. The purpose of this blog is to showcase EDI as an E-Commerce tool at hand similar to Web. In that perspective, I will be discussing the important parameters and prioritizations to consider in your E-Commerce strategy.
EDI and Web are complimentary E-Commerce sales channels or purchase tools (whatever perspective you may have). Most B2B businesses will need to excel in both disciplines to meet their full digital potential. So what’s the best way to enable businesses to e-trade together?
To get started, let’s take a look at a simple B2B E-Commerce purchase process in the figure below. On the left side we have two type of customers, Customer EDI and Customer Web. On the right side is the Supplier. In the middle is the methodology, which shows how Customer EDI and Customer Web execute the purchase.
The upper path shows Customer EDI, who uses his own ERP system to search and order products. The purchase order will eventually end up in the Supplier’s ERP system.
The lower path shows Customer Web, who uses the supplier’s web shop to search and order products. Also here, the order will eventually go to the ERP system of the supplier.
Most B2B businesses will have customers of both type EDI and Web. The key to being a successful B2B e-trader, is to understand the usage scenarios of the two methodologies, and being able to configure them the best possible way to strengthen the customers, the trading partners, and the internal processes.
Choosing between EDI and Web
To kick things off I have created a EDI vs Web comparison(image below) consisting of some e-commerce prioritization parameter’s. The idea is to get a better understanding which methodology is more important to the business. Later in the chapter, I will dig deeper into the background of this list.
The prioritization parameters are a set of businesses characteristics, which suggest what methodology is more suited for the business, EDI or Web. If the business has e.g. Formal business relationships with the customers, that’s suggesting the EDI methodology, whereas the characteristic of Casual business relationships suggests the web methodology.
Everything would be quite simple if businesses were either EDI or Web businesses, but, obviously, that is never the case. The comparison table serve as input to the digital strategy work to make sure that we spend money and time the best possible way.
How to extract valuable information from this table and how to use it?
Firstly, we need identify the characteristic of the business in question. By measuring the business against the parameters we get a good feeling, what kind of E-Commerce business is it, if the business is more suited for EDI Commerce or Web Commerce, or maybe it’s a 50/50% split. Secondly, we use this insight when planning the E-Commerce focus areas of the business. If the business mostly has EDI Commerce characteristics, let’s say 70/30% match between EDI/Web, then it doesn’t make sense to spend 90% of the e-commerce budget on Web. The right approach is to use the prioritization parameters above to recognize what e-commerce methodology, EDI or Web, would most likely to benefit the business, and then frame e-commerce focus and prioritization accordingly. The point being that all the regular E-Commerce work take place on the foundation of basic knowledge of both e-sales methodologies , including how they objectively map to the business.
The prioritization parameters do not give a final answer whether to focus on EDI or Web; For instance, it could be, that the business was primarily suited for EDI Commerce, but in this specific context the most profitable project would still be to develop a new B2B Webshop. As long as the decisions are rooted in a fundamental understanding of both EDI and Web everything is fine. In [Part 4 – E-Commerce and EDI – The full potential] I will disucss how to take your EDI to the next (Commerce) level.
My hope is that more businesses will embrace EDI as an E-Commerce sales channel exactly as they do with Web. As mentioned in Blog series: B2B E-Commerce – Do you prioritize your biggest channel? EDI is by far already the biggest e-sales channel. If you do masterclass EDI Commerce it will definitely make an impact on both numbers and people of the organization.
These days most B2B E-Commerce projects, being EDI or Web, will provide value given that the execution is on point. It’s not about picking profitable projects, but more so picking the most profitable projects, which can only be achieved via better understanding of EDI Commerce. I encourage you to start using the EDI vs Web the prioritization parameters on your own business to propagate EDI Commerce in your own organization – maybe it will lead to the most profitable E-Commerce project to take on.
Blog series: B2B E-Commerce – Do you prioritize your biggest channel?
Part 1 – E-Commerce and EDI – Where’s the hype?
Part 2 – E-Commerce and EDI – EDI vs Web
Part 3 – E-Commerce and EDI – Omnichannel
Part 4 – E-Commerce and EDI – The full potential
Part 5 – E-Commerce and EDI – Technical: Architectural amusements
Background on the prioritization parameters.
To understand the similarities and differences between EDI and Web, I compare how they each support simple business processes of B2B Commerce.
To do this comparison, I define five common commerce business processes: authentication, display items, ordering, order confirmation, invoicing. The table below shows how EDI and Web supports each of the processes.
And then I have translated into 4 important parameters.
- What are the customer types of the business.
- What are the customer behaviours of the business.
- What’s the type of business itself?
- What’s the level on digitized processes of the business and it’s customers.
Eventually, this list worked as a basic for the Prioritization parameters.