I have had several conversations in the last week with companies that use B2B/EDI managed services providers. Many of these companies already have EDI/B2B experts on staff and have made significant investments in internal EDI systems, yet they are outsourcing much of their EDI/B2B processes to managed services providers. WHY? What is the value?
Here are some of the reasons as they were communicated to me:
- They would rather use their experienced B2B / EDI managers on strategic B2B projects, rather than on maintenance and day-to-day operational issues. They feel that the operations of an EDI system is not something that needs to be done in-house.
- They have acquired several new companies and need to integrate new processes, customers and supply chains into their SAP or ERP system via EDI/B2B quickly. Their existing IT staff do not have the time nor resources to take on additional trading partner enablement projects.
- Many of the company’s supply chain partners are already connected with the managed service provider, so they can save money and integrate much quicker by connecting to the managed service.
- It is time to renew maintenance agreements and/or upgrade their existing EDI system. The company does not like the EDI system and the cost is prohibitive. They would rather outsource EDI going forward and pay a fixed monthly charge.
- The original EDI experts have long ago left the company and EDI is viewed as a weak link or risk in the IT environment. They would rather put their EDI system in the hands of experts that will monitor, support and maintain it 7x24x365.
- Several companies would rather use an SAP centric managed service provider that tightly integrates with their existing SAP system, rather than an agnostic third party EDI system that is expensive and not part of their corporate IT strategy.
- Many times the experts that work at the EDI/B2B managed service provider can implement or on-board trading partners much quicker due to their expertize and on-boarding tools and utilities.
- In the high tech industry – supply chains and contract manufacturing partners change so often that companies would rather have these relationships managed by an EDI/B2B managed service provider that can quickly on-board new partners and reuse existing maps and EDI or Rosettanet messages rather than hire more IT staff to keep up with the changes.
The bottom line – many of these companies feel they can get better results, in shorter time frames and for less money by using a B2B/EDI managed service provider than by increasing internal staff and investing in more and more EDI and B2B software systems, training, maintenance and support.