On another one of My readling places - the EDI-L group on Yahoo - and the topic came up about “who pays” for what…  The topic-starter was looking for some kind of “best practices” in the EDI world when it comes to new implementations.  I think a lot of the people are viewing this from the “dating” point of view - that the person who asks for the date is the one that pays for the date…  Basically, if I was to call you up and ask you to go out with Me to dinner and a movie - or drinks and dancing - or supper and se…  wait, keep that one quiet… anyway, if I’m doing the asking, I should be doing the paying…

But that’s not truly the case when you’re talking about EDI.  When it comes to EDI, I’m doing the asking - “Hey!  I’d like to send you our PO and get an ASN and an Invoice back, electronically.  Are you game?” - but you’re doing the paying…  At least in My world - the world of retail trade.  I’m requesting you to change the way that we do business and accept My orders for your products electronically - instead of via fax or mail or carrier pigeon or crazy, downtown bike messenger - which will, in turn, save us both money (money, money, money… it’s a rich man’s world!), because we’ll be able to get rid of some of those leased phone lines (for the fax) and cut down on postage (the mail), nearly eliminate our budgets for bird seed (the pigeons) and harrowing clean-up expenses from those sweaty Lycra clad bikers…  It will also save us money because we won’t have nearly the same kinds of expenses for error resulotion when an order is keyed in wrong by that pretty - but dense - eye-candy and boss’ kid data entry operator over in customer service…   

Now I’m not saying that all (or even most) data entry people in customer service are dense - or lack-luster kids of bosses - but you know what I mean…

All it can take is just one key-stroke to completely alter an order.  I’m ordering, for example, 1000 Widget A (style W-A1) in blue (color 001) and it gets keyed as 10000 Widget 1 (style W-1A) in black (color 010).  You can see how easy it is to muck up an order with just an extra ZERO (10,000 instead of 1,000) or transposed data (style A1 vs 1A - or color 001 vs 010)…  We NEVER sell your black Widget 1, as nobody orders that from us.  And even if we sold a few - just because they’re new and novel - we still have over 9000 of ‘em in stock and what-the-hell-are-we-gonna-do-with-’em…?  So we submit an RTV request and you pay for shipment of the goods back and you credit us the difference and so on and so forth….  It’s all on your side of things.

If the order had been sent via EDI, the order goes in as we sent it - 1000 qty W-A1 in 001 - no muss, no fuss, no errors… unless they’re on OUR end.

But I’ve gotten a bit far afield in the details again.  Back to “who pays” for EDI….

In the retail world, I’m a HUB.  I’m the guy sending the orders and receiving the product and selling the Widgets on to the wide and wildly waiting world of Widget wovers…  LOVERS…  I’m the guy in the driver’s seat.  I’m telling you (via My 850 PO spec) that I’m going to send you an order and it’s going to contain this information and this other information and, oh-yeah, that other information over there.  And I’m going to request - no, REQUIRE - that you send Me an 856 ASN when the order is ready to be shipped.  AND I’ll accept your 810 Invoice electronically - again, all in the name of ease and cost reductions and error management.

Basically, it’s a cost of doing business… for YOU.  My costs of doing business are having a chain or stores (ok, maybe just 1 - Wally’s World of Widgets for Widget Lovers - hey!  got it right!) and hiring employees and buying cash registers and store fixtures and paying for ads in the local paper and rent on a location and all the other things that go along with it…  Sure, you could justify that it’s a cost of doing business for Me, too, but you need to think of it differently… You need to put yourself into My shoes…

So you’re Willy’s Wacky Widgets - and you make and sell a wonderful array of widgets… different colors, sizes and shapes… and you sell those widgets to your customer base - Widget retailers.  You sell them to Wally, Wayne, Wanda, Wu, Wendy, Weaver and Bill…  That’s William.  Then it’s the job of Wayne, Wally, Wanda, Wendy, Wu, Weaver and William (Bill) to sell the widgets to the final customer - Wilma, the world’s most well known and renowned Widget owner, who lives in Walla-Walla, Washington. 

Now, in this, you’ll notice something - we’re both selling a product (widgets) to a consumer (you to Me and Me to Wilma).  Of course, you’re a wholesaler of widgets and I’m a retailer.   The only difference is the price.  But, see, I’m your customer.  Without Me, who would you sell your widgets to?  You don’t sell them directly to Wilma (although, of course, you could!), but without Me - you’ve got no customer base.  So you sell to Me - your CUSTOMER.

And the fact that I’m your customer means a lot.  In the retail trade, there’s an old axiom:

1 - the customer is always right.

2 - when in doubt, see rule #1 (above).

Basically, it means that the customer - Wilma to Me and Me to you - is the one that is truly driving the transaction.  Wilma has the cash to buy the widgets from Me and I’ve got the cash to buy them from you.  You, on the other hand, have the knowledge, equipment and supplies to create and provide those widgets to Me so that I, in turn, can provide them to Wilma in Walla-Walla and make her wonderfully happy.

The cost of the EDI - the testing, compliance, implementation - are yours.  At least for your side of things.  I wouldn’t expect you to pay for My set-up fees and implementation costs - as they’re a cost of doing business for Me.

Let’s spin this off in a slightly different direction - you package the widgets 50 to a carton.  That carton is a cost of doing business for you.  Are you going to charge Me for that carton?  Don’t think so.  Instead, you’ve figured a way to build that cost of the carton into your overhead - into your manufacturing costs - so that you’re covered for those costs. 

But you say “Hey!  Hold on now!  Wait a minute!” and you tell Me how I’m still paying for those cartons - in that I pay 1/10th of a cent for each widget to cover your costs of the cardboard cartons.  And, sure, you have a point - but it’s not truly a cost of doing business for Me.  It’s just part of the cost of the goods I’m buying - just like My overhead for the chain of widget stores is figured into the price I’m selling that widget to Wilma for in Walla-Walla.

So in the “who pays for what” equation, YOU pay for the costs of implementing and doing EDI with Me - just as I pay My side of those same costs of doing EDI with all of My suppliers and vendors.  I’m the 800lb gorilla in the room - I’m the one that has the control- or at least more of it - in this deal.  I’m the hub, I call the shots, I’m the driver.

At least that’s how it is in the world of widget retail.  But, as I’d posted over on the EDI-L group, it’s probably more of an “industry specific” kind of thing - that healthcare has different practices (best or not!) than retail has and they’re different from banking/finance which is different from universities and eduction which is different from … well, you get the idea, right?

So, on to your side - who pays for what…?  And where are we going to dinner…?