Issue

Syensqo has multiple EDI setups using various applications. EDI (Electronic Data Interchange) involves the electronic exchange of standardized business documents between organizations (B2B). This KDD aims to analyze the EDI applications used for each process and provide recommendations for the applications.

Recommendation

It is recommended to proceed with Option A—simplifying and standardizing the EDI systems . Under this approach, a primary EDI application will be designated for each process, serving as the default system for onboarding any new external businesses. Secondary EDI applications will be allowed only on an exception or case-by-case basis.

By establishing a default application, all new external businesses will be onboarded using this system, ensuring a consistent and streamlined approach to electronic data interchange. This consistency is crucial for enhancing efficiency, improving data accuracy, and facilitating smoother integration with partners. By allowing secondary applications selectively, the organization can accommodate unique partner needs or specific scenarios that the primary EDI system may not address, while still prioritizing simplification and standardization.

Following are the next steps recommended as part of this option:

• Business to come up with a strategy on how they want to transact with the external business partner per each process
• Finalise the primary and secondary EDI based on business strategy during detailed design

Background & Context

EDI stands for Electronic Data Interchange. It is a standardized method for exchanging business documents between organizations electronically. EDI enables companies to send and receive documents such as purchase orders, invoices, and shipping notices in a structured format, which improves efficiency, reduces errors, and speeds up transaction processing. By using EDI, businesses can automate their communications and streamline their operations.

Following are different classifications of EDIs

1. Direct EDI

• Direct exchanges between trading partners without intermediaries.

2. EDI via Value-Added Network (VAN)

• A third-party service for document exchange, providing additional features like encryption and data translation and/or
• Outsourced services where a provider handles all aspects of EDI operations for a business.

3. Web-Based EDI

• Accessing EDI services through a web portal, allowing users to upload and download documents easily and/or
• EDI solutions hosted in the cloud, providing scalability and reduced IT infrastructure needs.

4. API-Based EDI

• Utilizes application programming interfaces for real-time data exchange, suitable for modern applications and e-commerce and/or
• Uses file transfer protocols (FTP/SFTP) for sending and receiving EDI documents securely.

Following are the key EDI systems in Syensqo along with the type of EDI

EDI based on the transactions:

Assumptions

The EDI tools which facilitate B2B connections are considered in this KDD. Tools with additional functionalities than EDI i.e. Ariba Source , Salesforce etc.. are excluded

Constraints

None identified at the time of writing the document

Impacts

Strategy Definition: Business (Per GBU) needs to establish a clear strategy for transacting with external partners, taking into account industry-specific requirements. This strategy will outline how transactions are conducted, including the selection of technology and processes that best meet those needs. It will be instrumental in defining the primary and secondary EDI systems for Syensqo, ensuring that the chosen systems align with operational goals and facilitate effective collaboration with partners. By confirming this strategy, Syensqo can enhance efficiency, maintain compliance, and adapt to evolving market demands.

Changes in Downstream systems: Modifications to downstream systems are necessary to facilitate the migration to the defined Primary EDI for the process. This involves updating interfaces, workflows, and data handling procedures to ensure seamless integration with the new EDI system

Change Management: Coordinating with external business partners to onboard them onto the newly confirmed EDI application and facilitate smooth transactions.

Training: Equipping both internal teams and external business partners with the knowledge and skills needed to effectively utilize the new EDI process. Additionally, training should include troubleshooting procedures to empower users to resolve common issues independently. Ongoing support resources, such as documentation and helpdesk access, should also be provided

Business Rules

New external businesses must be onboarded to the designated primary EDI system for the relevant processes, unless they meet specific exception criteria.

Options considered

Option A: Simplify and standardize the EDI systems

As part of this approach, the EDI systems are consolidated for each process to minimize complexity. A primary EDI and a secondary EDI are established, with the primary EDI serving as the strategic system where all new businesses are onboarded. The secondary EDI is utilized only on a case-by-case basis. 

NOTE: The primary and secondary EDI should be determined as part of the Business Strategy by Business. The below table is based on the limited understanding during the conceptual design phase and needs to be updated based on the business strategy which is a pre-requisite before implementing this option.

Option B: Implement the As-Is EDI systems

As part of this option, the current EDI approach continues without any formal definitions of Primary or Secondary EDI systems. This means that there is a flexible onboarding process where external businesses are integrated into the EDI framework according to their specific preferences and requirements. Each partner can choose the EDI method that best suits their operations, allowing for a more tailored approach to data exchange. This adaptability can foster stronger relationships with partners, as they have the freedom to dictate how they engage with the EDI system. However, this lack of standardization may lead to increased complexity in managing diverse systems and processes, potentially resulting in challenges related to data consistency and integration over time.

Evaluation

	Option A: Simplify and standardize the EDI systems	Implement the As-Is EDI systems
Cost	Reduces operational costs by minimizing redundancy.	Higher operational costs due to redundancy in processes.
Complexity	Increased complexity due to combining multiple integration requirements to one EDI	Increased complexity in managing various systems. Flexibility to tailor systems to specific needs.
Integration	Simplifies integration as the number of EDI systems is minimized There might be challenges integrating with the Legacy systems	Integration to multiple systems can be challenging.
Data Consistency	Improved data consistency across transactions as the number of EDI systems is limited	Multiple EDI's might compromise the data consistency (Especially the Inbound EDI's) due to different mapping rules
Scalability	Easily scalable - Any new requirements can be implemented faster due to the limited number of EDI applications Can reduce the organization's agility in adapting to changes in the market or specific partner needs, leading to potential operational inflexibility.	Difficult to Scale as any new requirement should be implemented in multiple EDI systems
Change Management	Change management effort is low as there any new business is onboarded into the existing EDI	Change management effort is high due to multiple EDI systems

See also

Change log

Workflow history