Electronic Document Interchange Implementation Best Practices for Russian Companies

By Ulf Schneider

With the introduction of electronic document interchange (EDI) gaining momentum, there are a number of ‘best practices’ in the implementation process that can be shared. Such ‘best practices’ may prove to be helpful to both first-time implementers as well as to the more experienced ones.

Executive sponsorship

To be a success, it is paramount that there is executive sponsorship or management buy-in during the introduction of EDI. This implies that a key decision-maker in the organization has a deep understanding of the benefits that EDI implementation will bring and is capable of effectively sharing and promoting such understanding. Furthermore, this person needs to make sure that appropriate resources are secured and made available for the implementation as well as to create an environment for a successful implementation.

A working group

An effective implementation would also require that a working group or implementation committee be created involving various departments. The reason for this is that the EDI implementation is an integrated process involving multiple functions within the organization – accounting, IT, legal, internal controls, to name a few. A working group should include representatives from each of these functions so that their efforts can be aligned to achieve a seamless implementation. Having a multi-department working group also leads to a shared sense of ownership over the project, keeping everyone committed, engaged and accountable over the agreed upon work plan and to make sure the implementation is a success.

A champion

There has to be a champion or leader in the implementation process. This would be the key person in the entire implementation process. It would be someone who would drive the change, control the project status and inform all parties involved about the necessary action steps. This person would also act as the project advocate and educator. The role of the project champion can be fulfilled by its executive sponsor or by someone else in the organization. To effectively drive the implementation process, the person would need to be tough, steadfast, knowledgeable about the organization and a systematic thinker with a strong project management experience.

Internal implementation

Another ‘best practice’ is that a company contemplating the EDI implementation should consider first doing it internally – among its various locations, subsidiaries, etc. Doing so internally will provide invaluable experience and insight into the implementation process and would help with an implementation with external trading partners.

Identify a pilot trading partner

Identifying a pilot trading partner may also prove quite instrumental in the EDI implementation success. Such a partner may be a major supplier or a customer. Alternatively, it may be a partner who has already implemented and is using EDI with its other trading partners. This would offer the company introducing EDI an opportunity to learn from its trading partner’s experience and to remedy issues, if any, more effectively before the implementation process can be rolled out to its other partners.

Be clear on the implementation scope

Be sure you ask the right questions in the beginning to clearly define the implementation scope. Such questions would include those as to whether you plan on receiving e-invoices from one or several suppliers, whether you plan on sending e-invoices to one or several customers, what documents will be involved – whether it is going to be just invoices or some other documents as well. Clarity should also be established on the software and hardware requirements, the implementation timeline and the post-implementation process.

Select the right EDI operator – care should be taken when selecting an operator to make sure it will allow for electronic document sharing with the desired trading partners. At present, there are around fifty authorized operators to choose from. It should be kept in mind that in situations where trading partners have different operators, EDI between such trading partners may not be possible due to current technological and most importantly, legal challenges that need to be overcome. In particular, there is still lack of clarity and agreement on how legal responsibility towards their respective clients is to be shared between such EDI operators. The issue is currently being worked on and is expected to be resolved in the near future.

Commercial viability

When evaluating commercial viability, consideration should be given to both tangible and intangible factors. Tangible factors are easy to quantify and would include savings afforded by the elimination of a number of tasks, cost of paper and ink, mailing and transportation charges. Intangible factors are much more difficult to quantify in monetary terms. These examples would include the decrease in the time spent on handling questions and disputes, faster access to documents, documents never getting lost, and the improvement in customer service and relationships with trading partners afforded by the time freed up from various tasks. Such intangible benefits translate into a competitive advantage which can ultimately be viewed as the key benefit of the EDI introduction.

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