The American Banker reports this morning on how traditional EDI continues to slow progress of Internet-based EIPP solutions.
The most basic reason for this is that EDI systems work. Companies typically work with a private networking partner, called a value-added network. Buyers send EDI-formatted purchase orders to their suppliers through the VAN and receive both shipping confirmation notices and invoices. Some can also transmit electronic payment instructions through the VAN to financial institutions, though the majority of payments are still made with paper checks. These systems have been in place for years, sometimes decades, and are commonly used by many of the nation’s largest corporations. Velosant and other EIPP vendors may rue this situation, but EDI vendors are sitting pretty, largely because big companies have put so much money into their technology.