Electronic data interchange (EDI) is the most commonly used B2B and Healthcare technology for computer-to-computer exchange of structured documents between trading partners/health institutions.
EDI has been around for years, and according to the latest reports from modern EDI platforms (such as Idea Exchange), the traffic of EDI documents between trading partners has increased 23% from 2017 to January 2020.
For additional details about EDI, please take a look at our What is EDI article.
How do most companies manage their EDI operations?
Typically, companies choose one of the following paths:
- In-house—involves hiring staff, purchasing software, and overseeing ongoing maintenance
- Outsourcing—uses a third party's staff expertise and software to set up and maintain EDI operations
- Hybrid—manages EDI in-house and outsources a portion. This can include hiring a consultant to build maps, outsourcing areas not covered by current staff’s expertise, and bringing in extra help for big projects.
I won't go into details or comparison of the different options and their pros and cons, because it is subjective and depends on multiple factors. My goal would be to share our findings on the In-house EDI option.
EdiFabric offers developer tools for EDI. We have seen a surge in demand for our EDI software during 2020, which continues steadily in 2021. The reasons? Based on our experience with 500+ customers, it's always due to flexibility and cost.
Why would companies outsource EDI?
EDI has always been perceived as "expensive", just think of IBM Gentran, hence the outsourcing option was so lucrative in the 90s. Fast-forward 10-20 years and we have a very different landscape. The Internet offers a range of new communication channels and technologies, many of them open-source and free.
The overall cost of the tech that is required for a decent EDI system has gone sharply down and at the same time outsourcing providers haven't really followed suit. SME's are still paying anything between $20,000 to $50,000 annually for literally exchanging files. Really? Are these files anything special?
Not at all. All EDI communication is down to sending and receiving EDI files of a specific structure. Often, this structure is common, but occasionally trading partners have modified it to fit their business needs which requires a "translation" to/from the common structure.
Why would companies bring EDI In-House?
As I mentioned above - flexibility and cost. Outsourcing EDI incurs a cost for:
- Initial setup
- Monthly/annual subscription (for a set bundle/volume/bandwith of files/data)
- Overage cost
- Pay per change/new requirement (additional maps, partner connections, etc.)
Both flexibility and cost are a bottleneck for outsourced EDI and in order to keep everything within budget, companies are turning to either a partial (hybrid) or full EDI in-house operation.
In-house EDI is no more a pricey enigma. We live in the Informational age where interconnections between individuals and businesses are ubiquitous. There should be absolutely no difference whether two trading partners exchange information in XML, EDI, or JSON format. That's where EdiFabric comes in.
The complexity of EDI stems from the various rigid formats and the available tools and resources to translate them. EdiFabric offers developer tools that help with exactly that:
- Integrate EDI into all in-house software applications
- Seamlessly switch between EDI, JSON, XML, or any custom CSV format
- Represent all EDI formats with the same template format
- Configure EDI transactions to match any partner-specific structure changes
- One-off cost for an unlimited number of users/environments/partner connections
- Implement EDI by existing staff, no need to hire EDI consultants
So, if you are a company with a culture to develop software in-house, then EdiFabric makes it possible to bring EDI in, hassle-free and on budget.
What are some use cases of implementing EDI In-House?
EdiFabric worked with Accenture to enable their EDI team with EDI translation and validation toolkit as part of their "Public Health Platform for helping Medicaid" initiative. Accenture used EdiFabric to split large EDI files that contain batches of healthcare transactions (X12 HIPAA 834s) into small EDI files, each containing a single transaction. The small files are then sent out to their Healthcare backend system.
The main reasons for using EdiFabric were to:
- Read very large files (their other EDI software was choking on any file > 10MB)
- Split batches of EDI transactions into single transactions (by any repeatable loop)
- Validate the EDI data before processing it downstream
The solution allowed them to quickly set up an extra step in their overall EDI flow, without incurring any extra cost and implementing it solely with internal resources and on time.
EdiFabric assisted the U.S. Department of Veterans Affairs to create a brand new web portal for veterans to manage their healthcare plans, appointments, benefits, and prescriptions.
The solution is a full end-to-end EDI process, connecting with Medicare and Medacaid, and using third-party software components as well.
The main reasons for using EdiFabric were to:
- Electronically manipulate healthcare files
- The ability to validate patient information according to predefined rules
- The ability to configure and create custom validation rules
- To automate the generation of EDI acknowledgments, such as 999 and TA1
The development team was quick to adopt EDI by using familiar technologies without having to learn EDI at all. The flexibility of EdiFabric allowed them to design and create a modern, web-based portal, which requires minimal maintenance and is fully configurable.
In-house EDI insights
We have analyzed the ways our customers use our tools for all things EDI, and some of the breakdowns clearly show that technology is adopting EDI at a fast pace, which means that In-House EDI is becoming ever more popular.
Use of EdiFabric's EDI tools by industry sector:
Use of EdiFabric's EDI tools by company size:
Use of EdiFabric's EDI tools by country: