EDI vs. Modern Order Automation Comparison
5 minutes
Aug 9, 2024
So your customer wants EDI
Your biggest customer just told you they need EDI. Your operations team is excited because "EDI eliminates manual order entry!" Your IT team quoted $40,000 and six months to implement it. Finance wants to know if there's ROI. And you're wondering if there's a better way.
There is. But first, let's be clear about what EDI actually is and why it's both incredibly powerful and incredibly painful.
EDI (Electronic Data Interchange) has been around since the 1960s. It was built to let computers talk to each other without humans copying data between systems. The promise was simple: customers send orders electronically in a standardized format, your system reads them automatically, and manual order entry disappears. For large retailers and manufacturers who process thousands of orders daily, EDI delivers on that promise.
But here's what nobody mentions in those initial conversations: EDI only works when both sides follow the exact same format specifications. And "standard" formats like ANSI X12 850 have thousands of optional fields, multiple versions, and endless implementation variations. Your customer's version of "standard EDI" probably looks nothing like the next customer's version.
This is exactly why mid-market companies implementing EDI for one major customer often find themselves still manually entering 85% of their orders.
What EDI is and isn't
The promise: Eliminate manual order entry forever
EDI vendors will show you the dream scenario. Your customer sends an 850 Purchase Order transaction. It flows through an EDI network like SPS Commerce or TrueCommerce. Your system reads it automatically. The order goes straight into NetSuite or SAP without human intervention. You send back an 855 Purchase Order Acknowledgement, an 856 Advanced Ship Notice, and eventually an 810 Invoice. Everything's automated.
For companies processing thousands of orders from major retailers or automotive manufacturers, this actually works. EDI handles the volume, enforces compliance with trading partner requirements, and creates audit trails that satisfy everyone from customers to accountants.
The automotive industry has used EDI for decades because a single manufacturing plant might process 500+ purchase orders daily from various suppliers. The retail industry standardized on EDI because Walmart, Target, and other major chains can't function with manual order processing at their scale.
The reality: You're about to spend $40K to automate 15% of your orders
Here's what actually happens. You implement EDI for that one major customer who demanded it. You pay for the EDI network subscription (typically $500-2,000 monthly depending on transaction volume), integration development to connect it to your ERP ($15,000-50,000), and testing to ensure your formats match theirs perfectly.
Six months later, EDI works beautifully for that one customer. But your other customers - the distributor who emails Excel spreadsheets, the manufacturer who calls in orders, the retail chain that uses a web portal - they're all still manual. You've automated one channel while the other 15-50 customers still require someone to manually enter their orders into your system.
And that major EDI customer? They still call with order changes. They still email corrections. They still expect you to handle the exceptions that don't fit neatly into EDI transactions.
Look, EDI isn't a scam. For the right use cases - high-volume trading partners with stable order patterns - it's incredibly effective. But it's not "order automation" in the sense that most companies need. It's automation for one specific channel using one specific format.
Where EDI doesn't work
That customer who "uses EDI" but still emails you changes
You finally get EDI working. Orders flow in automatically. Then Monday morning happens.
"Hi, can you change line 3 on PO 78452 from 100 cases to 150 cases? And also add a rush flag? Thanks!"
That request came via email. Or phone. Or text message. Now someone needs to manually find that EDI order in your system, make the changes, and send an updated acknowledgement. The EDI transaction handled the initial order, but every amendment, cancellation, or inquiry goes back to manual processing.
This isn't customers being difficult. EDI change transactions (860 Purchase Order Change) exist, but many customers don't use them. It's often faster for them to just email you. So you've automated the initial order but not the entire order lifecycle.
The format nightmare nobody mentions upfront
"We use standard EDI" is technically true but practically meaningless. ANSI X12 850 has over 200 segments and thousands of optional fields. Your customer might put the ship-to address in segment N1-ST while another customer uses N3-N4. One customer sends item numbers in the PO1-07 field while another uses PO1-09.
Every EDI implementation requires mapping - translating between your customer's specific format and your ERP's expectations. When SPS Commerce updates their specifications or your customer changes their internal systems, those maps break. Suddenly orders aren't flowing anymore and you're troubleshooting why item numbers stopped importing correctly.
If you're working with a company like TrueCommerce or DiCentral, they'll handle some of this complexity. But you're still responsible for testing every change, every new trading partner, every format variation. It's not "set it and forget it" - it's ongoing maintenance.
Why your other 85% of customers will never use EDI
EDI implementation costs $15,000-50,000 per trading partner when you factor in mapping, testing, and integration work. Your customers face similar costs on their end. That makes sense for a customer sending you 100 orders monthly. It makes zero sense for a customer sending you 3 orders monthly.
Your smaller customers don't have the IT resources or transaction volume to justify EDI. They'll keep emailing Excel spreadsheets or calling in orders because that's what works for them. And honestly? For a customer placing 2-5 orders per month, email probably is more efficient than implementing and maintaining EDI.
This is where the "automate 15% of orders" reality hits. Sure, maybe that 15% represents 60% of your volume if you have a few massive customers. But you're still manually processing orders from dozens of smaller customers who will never implement EDI.
What modern order automation actually handles
EDI plus everything else that comes through
Modern order automation platforms don't replace EDI - they work alongside it and extend automation to everything else. Here's what that actually looks like in practice.
EDI orders flow through SPS Commerce or TrueCommerce exactly like they do now. But email orders, Excel spreadsheets, PDF attachments, customer portal submissions, and even faxes (yes, really - some industries still use them) all get processed automatically through the same system.
Instead of requiring customers to change how they send orders, automation adapts to them. The distributor in Chicago who's been emailing Excel spreadsheets for ten years? They keep doing that. The manufacturer who fills out a PDF form? They keep doing that. Your system handles the variation automatically.
This matters because order automation isn't about forcing standardization - it's about handling reality. And reality is messy. You'll always have some customers using EDI, some emailing orders, some calling them in, and some using your web portal. Automation that only handles one channel isn't really automation.
Platforms like Workato and Celigo can connect multiple channels, but they still typically require structured data inputs. The real transformation happens when AI-based systems can read unstructured orders - emails where the customer typed the order directly in the message body, PDFs with varying formats, or Excel sheets where column ordering changes between orders.
How AI learns customer formats instead of breaking on changes
Traditional EDI mapping breaks when formats change. You've probably experienced this: a customer updates their ERP, changes how they format ship-to addresses, and suddenly your EDI connection stops working properly. Someone needs to update the mapping, test it, and redeploy.
AI-based automation works differently. Instead of rigid rules-based mapping, the system learns from patterns. If a customer consistently puts their PO number in the email subject line, the AI recognizes that pattern. If they switch to putting it in the body, the system adapts within a few orders.
This is particularly powerful for the format variations that EDI struggles with. Customer sends a slightly different Excel layout? AI recognizes it's still a purchase order and extracts the data correctly. Customer adds a new column for rush flags? The system learns what that column means and incorporates it.
But here's where it gets really valuable: AI handles exceptions that humans currently catch. If a customer orders item 12345-A but your system only recognizes 12345, traditional automation fails and creates an exception for human review. AI-based systems can recognize that 12345-A is probably a variant of 12345, flag it for quick validation, and learn from the confirmation.
Modern platforms like Crew Capable combine AI-based extraction with traditional EDI connectivity. EDI orders flow through normally, but everything else gets processed with the same level of automation. The system handles the structured EDI transactions and the unstructured email orders through one platform, learning from each order to improve accuracy over time.
When EDI makes sense (and when it doesn't)
The "EDI or bust" customers worth the investment
Some customers require EDI as a condition of doing business. Large retailers, automotive manufacturers, and many Fortune 500 companies won't work with suppliers who can't receive EDI transactions. If Walmart or General Motors says you need EDI, you implement EDI. That's not a decision - it's a requirement.
High-volume trading partners also justify EDI investment even when it's not mandatory. If a customer sends you 500+ orders monthly with stable order patterns, EDI's per-transaction cost drops to pennies. The implementation cost amortizes quickly and you get reliable, fast order processing.
Industries with strict compliance requirements often standardize on EDI because it creates clear audit trails. Healthcare suppliers working with hospitals, defense contractors working with government agencies, and automotive suppliers all benefit from EDI's structured documentation.
Why forcing smaller customers to EDI backfires
You might be tempted to tell all customers "we only accept EDI orders now" to maximize automation. Don't do this. You'll lose customers.
Small and mid-market customers often don't have the technical resources or transaction volume to justify EDI on their end. Asking them to implement EDI is like asking them to spend $20,000 to make it easier for you to process their $50,000 annual order volume. It doesn't make sense from their perspective.
These customers will find suppliers who accept orders the way they want to send them. Your competitor who handles email orders without complaint will win that business. And you've just automated yourself out of revenue.
The goal isn't to force customers into your preferred channel. The goal is to automate processing regardless of how they send orders.
The hybrid approach that actually works
The companies succeeding with order automation use a hybrid approach: implement EDI for customers who require it or justify it through volume, then use AI-based automation for everything else.
This gives you the best of both worlds. Your EDI customers get the compliance and audit trails they need. Your other customers keep using whatever method works for them. And you get automation across all channels without forcing anyone to change.
Your operations team sees one unified workflow. Whether an order came through EDI, email, portal, or phone, it goes through the same validation, processing, and fulfillment steps. The source channel becomes irrelevant to your internal processes.
This is where platforms like Crew Capable deliver real value for mid-market companies. Instead of choosing between expensive EDI implementation for all customers or continuing manual processing, you implement targeted EDI where it makes sense and automate everything else through AI-based extraction. Orders from SPS Commerce flow through just like orders from customer emails - all automatically processed, all validated consistently, all integrated with your ERP.
Frequenly Asked Questions
Stop choosing between EDI complexity and manual entry chaos. Crew Capable processes orders from all sources - structured EDI transactions and unstructured email orders - through a single AI-powered platform. See how it handles your specific mix of EDI and non-EDI customers without forcing anyone to change how they send orders.
