EDI Implementation Costs Calculation
The direct costs associated with implementing VICS EDI are similar to those involved in installing a new or upgraded internal applications system. This blog outlines cost factors in the areas of computer equipment, software, personnel and training.
Computer Equipment
VICS EDI is virtually hardware independent. It can be implemented on equipment ranging from large mainframe computers to microcomputers to PCs. If VICS EDI is implemented on a company’s host computer, additional computer equipment is needed only if the existing configuration does not have the capacity to run the translation software.
If VICS EDI is implemented using a front-end processor to the host computer, then minicomputer or microcomputer hardware is required. For a front-end configuration, software and hardware must be in place on both the host and the front-end computers in order to upload and download flat files.
Software
There are three alternatives for translation software; it can be purchased or licensed from an outside supplier; it can be developed in-house; or it can be contracted to a third-party network or service bureau. The cost of developing translation software in-house must be calculated using a company’s normal estimating tools and procedures. The cost of commercially available translation software will vary by the scale of the machine on which it operates and by the optional features selected. The cost of network translation usually entails an initial setup charge and usage charges for the translation service.
VICS EDI communications can be accomplished directly through one or more VANs, via email attachments, or using Internet-based forms. For direct communications, money must be budgeted for modems, telephone lines, computer ports, and long-distance telephone charges.
In addition, money must be budgeted for the development of communications software or for the purchase or license of a commercially available communications package supporting VICS EDI. For a VAN, a single modem, telephone line, and computer port are required to communicate with a VAN. VANs usually provide toll-free service to their clients or provide local access points as part of their service. VANs will provide software to communicate with them, but they may charge a purchase or license fee. Care must be taken to accurately estimate the volume of VICS EDI data that will be exchanged with trading partners, so that ongoing communications costs can be anticipated and properly budgeted.
Personnel
Implementation of a VICS EDI program cuts across many different functional areas of a company. To be successful, it is imperative that the coordinated efforts and commitments of multifunctional teams be established. Successful implementation may change the demands on internal personnel resources. Some functional areas may experience a reduction in needed personnel while other areas may require an increase. Some non-systems resources are identified in the following “Implementation Planning” section. Once a plan has been initiated, the work of systems resources include installation of translation software, mapping application system data files to or from the standard, programming interface or bridge programs, and preparation of communication software and procedures. Some companies accomplish these tasks using in-house personnel, while others may select independent consulting resources. To estimate staffing requirements, other VICS EDI users may be contacted to share their experience.
Training
Training expenses required will depend on the technical background of the staff and the degree to which outside resources are utilized. Several firms provide EDI training programs, and many of the translation software and VAN providers offer training, either as part of their basic sevices or for an additional fee.