This is the survey I mentioned in my e-mail last week. As I said before, we can’t and won’t release the names of the companies/people who filled out the survey. Nevertheless, in keeping their privacy protected we are listing the questions and answers. Questions which are open-ended are sometimes summarized depending on how breif the respondent was.
The survey was filled out: 3- 3PLs, 3- EDI providers (Hosted), 12- retailers and 197 suppliers. All but two retailers are in the stores.org top 100. 15% of the suppliers are billion dollar companies with the rest ranging down to much smaller companies.
Several EDI companies are mentioned by suppliers. Wildly, several individuals who knew whether or not they used the 852, doesn’t know who their EDI provider is. Many of the companies don’t go by the names used. EDI companies mentioned: ADX, Arrow, DCAS, Dicentral, DirectEDI, EDICT, EXTOL, GXS, ICC, Inovis, EZcom, Nubridge, Owens, QRS, Softshare, SPS Commerce, Sterling, TIE, and True Commerce. As you can see from the list many of these companies have gone through M&A and are under other names. Also, several companies when asked “Who is your EDI provider” answered: many.
We asked what volume of EDI is being traded. Of the retailers who answered the question volumes range from 75-150,000 documents. Suppliers ranged from 0 to 300,000. Of those 26 trade in excess of 15,000 documents. The biggest group is the “don’t know” e.g. people didn’t have that information handy or chose not to list it. Suppliers who stated a seasonal business are averaged, but only 5-6 said they were seasonal.
Wide range of ERP and accounting applications are being used by this group.
• ACCPAC – 2
• AS/400 – 2
• Axapta – 1
• Epicor – 2
• Fourth Shift – 3
• Great Plains – 3
• Homegrown or Custom - 38
• Infor – 1
• JD Edwards – 5
• Manhattan & Associates – 3
• MAS 90 – 12
• Navision – 5
• OMS – 2
• Peachtree by Sage – 5
• QuickBooks – 13
• SAP – 9
• Solomon – 2
Many companies didn’t list their system or listed specialty applications, as an example one company listed their EDI provider another listed a CRM.
Retailers that we listed include everyone you would imagine and many that I didn’t know about. The retailers who answered the question of course came back with massive, multi-channel manufacturers like Nike and so forth.
Now for the important part: The prior information was listed to hopefully give you an idea of what types of companies filled out the survey. As EDI users, logistics people, developers you have an idea of what the traffic volumes imply and can probably draw lines to which of those companies are retailers, large suppliers and even which applications they use. The purpose of the survey though was to gauge how people feel about price, service level and the ‘ease’ of using their EDI provider’s tools. Let’s look at pricing information first.
Pricing is a tough question to ask people about because everyone wants a lower price. We asked two questions: “how much do you pay” and “are you happy with the price”. To compound it, one of our questions on the subject was open-ended. Only 100 companies answered both of the questions sufficiently for us to use their information. Of those 15% say the cost is a major problem. I should point out several companies also had gripes about service levels and their inability to make certain areas work such as integration or reporting. Of the 100 companies we have broken out their kilo character charges out as follows:
41% pay $0.75 - $1.25
38% pay $0.45 - $0.65
10% pay $0.20 - $0.35
11% pay $0.04 - $0.16
Illuminating, right? As many other people have, I have watched the price for data being traded drop for years. Did it stop all of a sudden or did the providers add sufficient value to their services to justify the continued pricing? I don’t know, but this is a great segue into Service and Ease of use.
Service is tricky. A lot of suppliers clearly indicate poor service, but list service failures which even in a service bureau are system issues. For example, 997’s not being sent I wouldn’t consider a problem of service, but rather the system responsible for the event. Is that fair? Anyway, the list of 7 service type issues is listed below.
1. Customer support is slow
2. Not local
3. Never respond quickly to questions
4. Takes too long for responses
5. Don’t tell us when they switch servers or go down
6. Very slow
7. Support guys don’t know EDI
Those are all the Support related comments. Not too bad for 200+ respondents. >3.5% isn’t too bad. Ironically, half the people who had issues with support have issues with cost. Go figure. Only three of the seven also listed system-related issues.
The system-related issues can split into areas where the workflow and or technology of the company selling the service fails to one degree or another. It also includes redundancies, non-intuitive areas such as interface design, access to reporting, etc. That said, only ten issues were listed.
1. No reporting available to show what has shipped which orders are new.
2. Too complicated
3. Don’t receive notifications when there are errors
4. Not user friendly and redundant
5. Required to re-type information, often
6. System changes are always required
7. Implementation was difficult as they didn’t really have trading partner available
8. EDI provider doesn’t provide 997 failure reports
9. Reporting is bad
10. Interface is a pain
If we include the list of issues users have with integration to their ERP or accounting application the list of ten quintuples. Here are my favorite:
1. Reprocessing IDOCS is incredibly difficult
2. Cost, and no people to manage it.
3. Horrible interface
4. No integration available from provider
5. It’s homegrown because provider doesn’t have integration
6. Has limitations, all AR is done manually
7. I have not been able to figure it out!
8. It doesn’t exist
9. Buggy
10. It’s NOT seamless!
11. It’s complicated
12. Too many manual steps
13. UPC and non-UPC issues
14. It didn’t work. We want it, but only if its backed by competent support staff
The list goes on and on. I didn’t include anyone’s opinion of the cost of the integration in the earlier area since it isn’t focused on kilo character.
If there are approximately 80,000 or so companies in North America supplying retailers in the same geographic area with EDI what would you take away from this survey? If we are conservative and say that 60% of those are EDI capable we could push the notion that in excess of 19,000 suppliers are paying over $0.75 per kilo character and even that almost 5,000 companies are not happy with the system they are using or greater than 3,500 suppliers are not happy with the support they receive. All of those numbers would sky rocket if integration issues were included. Based on the results of this particular survey all I would be able to say is the market is absolutely not flat. No company seems to have a perfectly priced and executed solution. Some companies are really good about surveying their clients to find out what else they can do. It’s a great way to learn where improvements need to be made and prioritize development and other functions and more should do it.
Having spent several years selling EDI to suppliers and retailers I can tell you not once was I ever asked by a retailer to prove service or capability and to my knowledge, no retailer surveys their suppliers to try to learn whether or not they are recommending a good EDI/software provider(s). Retailers will often refer EDI companies based on the number of complaints they have received, price and superficial capability. Odd, that more due diligence isn’t put into this area by retailers in particular.
If you have any questions about the survey or would like more information on a particular area, please don’t hesitate to let me know. Send an e-mail here or drop a note in the comments area.
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