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Many obstacles must be overcome to implement EDI within any company.

Some of the obstacles can be external and others can be internal. Described below are three obstacles presenting roadblocks to implementing EDI for competitive advantage. Executive-Level Commitment This is the most difficult obstacle to overcome w hen implementing EDI. Unless EDI is viewed as a business issue and addressed as part of your overall business strategy, it will not receive the attention or res ources required to help your company achieve a competitive advantage in the marke tplace. The key to selling EDI at the executive level is not based on the techno logy, but as a project directed at solving a business problem such as improved c ustomer service. Level of Automation This can be a problem if the sophistication of your cust omers and suppliers is not at the level needed for you to move toward an EC envi ronment. Many companies have incurred "hidden costs" to increase the EDI capabil ities of their trading partners. These costs can include conducting training to educate suppliers, identifying turnkey solutions that suppliers can purchase or funding a portion of the investment. The key to overcoming this obstacle is to i dentify the type of help suppliers need and working with them to resolve the iss ues. Compatibility of Technology This is generally not an issue if the services o f a value-added network (VAN) are utilized since they can handle almost any hard ware and communications interface required. It also eliminates other issues relat ed to the timing of transmissions, security and control reporting. However, this obstacle will become more important as companies move to event-driven EDI versus the current batch-oriented processes. The key is to evaluate the value of mainta ining in-house expertise versus utilizing a third-party service to support these trading partner linkages. Benefits In summary, there are many benefits to be obtained through the strategic use of EDI. The most important is the opportunity to earn greater profits and increase market share. However, many companies only document the reduced costs associated with eliminating the processing of paper-based documents. Significant benefits can be obtained from the competitive use of the inter-enterprise information. As indicated previously, reducing time to replenishment for existing products and time to market for new products are becoming critical issues for many companies. If companies are able to apply IBS technologies such as EDI to not only reduce cycle times and eliminate non-value-added activities, but share sales, marketing and engineering data the result will be a true competitive advantage. The benefits obtained from using EDI are also directly proportional to the measur ements used to evaluate its success. Traditionally, the success of EDI has been m easured by number of trading partners and transaction sets that have been implem ented. These measurements tended to promote the idea of EDI as simply a technica l issue. Recently, some companies have changed to measuring the success of EDI b ased on more operational measures such as inventory levels, delivery time and op en account receivable days. This has helped to increase the awareness of the bus iness benefits available from the use of EDI. However, to realize the true strat egic benefits of EDI, companies must develop new measures of EDI success such as the velocity at which products move through the distribution channels and the i ncrease in cash flow or working capital. This will help to create the awareness of EDI as an offensive weapon to win the business war. Assessing Your Potential

but order-of-magnitude changes of 100-200 percent. It has emphasized the need fo r companies to understand their business environment in order to take full advan tage of EDI's potential. Finally. The second step involves conducting a series of sessions to develop a vision of how your business processes should be done differently using EDI. it has summarized the obstacles. Conclusion This paper has attempted to create an awareness of the competitive advantages av ailable from the use of EDI. The challenge is to take . from a business pers pective. 4. should significantly change a company's thinking about the pot ential for EDI and result in initiatives to realize this potential. organizatio nal culture. Determine potential barriers to implementation such as resources. It has stressed the need to view EDI as part of a b usiness strategy and not simply a technical issue. organization and technology to describe how well it will need to work. 3. the use of EDI as an enabler of process innovation and increased compet itive advantage. Davenport describes a visioning process that provides this focus consisting of five steps: 1. Identify performance measures and objectives such as cost. benefits and an approach to utilizing EDI for competitive advantage. cycle time and speed to describe what must go right for the process to be successful. 5. It should be an executive-le vel effort focused on analyzing your key business processes at a strategic level . It should involve an examination of the your current business strategies and direction. but identification of the business processes offering the greatest opport unity for developing tighter linkages with your customers and suppliers. quality). If you are being required to implement EDI with your customers or sup pliers. The approach to assessing your EDI potential must be one that allows people to s tep back from their day-to-day activities and begin to formulate a new way of do ing business. This examination should focu s on understanding the drivers of the business (e. if e xecuted properly. perfo rmance. technology and market factors that could prevent a successful effor t. an assessment may help evaluate your efforts wit h the long-term potential for EDI. The result should be not only a consensus on your key business goals and objec tives. What is required is a process that generates a climate of open. 2.The assessment of EDI's potential for competitive advantage may be driven by man y factors. If you are already using EDI. The assessment. This is not the time to follow your standard systems development a pproach. Identify critical success factors such as people and technology that coul d cause the process not to be successful. It will also provide a high-level understandin g of the challenges that must be addressed before EDI can be used for competitiv e advantage. the benefit of assessing your EDI potential is the opportunity to examine.. In Process Inn ovation: Reengineering Work through Information Technology. Develop a list of key process characteristics such as flow. Develop an initial vision statement describing the overall process and ho w it will work. quality. mark et opportunities and the demands of your customers. Regardless of your situation. The first step to assessing your EDI potential involves compiling the informatio n required to formulate an accurate vision. creativ e and innovative thinking that results in not just incremental changes of 10-20 percent. The result should be a realistic vision of the EDI potential in your organiza tion from a business perspective. output. time. an assessment of your potential may help to establish a future direction .g. cost.

this new perspective and make EDI your company's gateway to competitive advanta ge. .