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Gamo outdoor uSa takeS aim at edi inteGrationthe leading manufacturer of outdoor sporting goods targets a move to hosted edi as part of a transition to SaP r/3

By Andrew K. Reese

Juan Rodriguez had a problem. Back in 2009, the IT director at Gamo Outdoor USA was overseeing the company’s move from the Sage MAS 200 enterprise resource planning system to SAP R/3. Trouble was, the company’s EDI provider at the time did not support SAP. To make the SAP project successful, Rodriguez needed to find a new provider that could support Gamo’s EDI communications with its top clients.

“We do EDI with just a small percentage of our total customers, but it makes up about 50 percent of our transaction volume,” Rodriguez says. “Our larger partners require EDI. They won’t do it any other way.” Naturally, then, finding a reliable EDI solution was critical to the business.

Aiming for Hosted

Gamo Outdoor USA is the Fort Lauderdale, Fla.-based unit of Gamo Outdoor, S.L., the Spanish manufacturer of airguns that also is the world’s top producer of pellets for air rifles and pistols. The Spanish parent company was rolling out R/3 worldwide, and when it came time to implement the ERP system in the U.S. business, Rodriguez headed up the project.

When it became clear that the company’s EDI provider could not make the leap with Gamo to SAP, Rodriguez began looking around for an alternate solution. He researched online and looked for feedback on different EDI service providers. One option that he considered was for a Web-based, or hosted, EDI solution that enabled buyers and suppliers to exchange data over the Internet.

Under the hosted model, the EDI service provider assumes responsibility for mapping data connections with various parties, alleviating the provider’s customers of the need to maintain any significant number of full-time staff devoted to managing the EDI connections. Also, since the connections are conducted via a Web interface, companies using hosted EDI don’t need to maintain hardware dedicated specifically to EDI connectivity.

Hosted EDI has been around for only about a dozen years, but already the market includes several established players. Rodriguez says that he reviewed a total of four different companies before settling on a provider called DiCentral. Houston-based DiCentral helped establish the Web-hosted EDI space when it was founded in 2000. Today DiCentral offers a variety of hosted solutions targeted at buying organizations and suppliers. Its trading community encompasses major players across such industries as retail, petrochemical, telecoms, manufacturing, and shipping and logistics, among others.

Rodriguez says that he tapped DiCentral for the project in part because of the favorable feedback that he read online about the service provider’s offering. DiCentral, in particular, has developed a reputation in the market as a good option for companies looking to do EDI in conjunction with an SAP ERP system. DiCentral claims as many as 30 large SAP integration clients in multiple industries.

Rodriguez also checked the customers that DiCentral already was working with, and it turned out that many of these companies were Gamo customers. “When you start with a new trading partner, doing the integration is not easy,” the IT director notes. “There’s a lot of fine tuning, a lot of effort, and it takes time. Since DiCentral had some of our trading partners as customers already, I knew that they would already have the integrations. That would make it much easier for my company.”

Complex Migration

Gamo Outdoor USA worked over the course of 2009 with its SAP implementation team, as well as with the technical team at DiCentral, with the goal of bringing the R/3 solution live together with the Web-based EDI on January 1, 2010. Rodriguez says that going through the ERP implementation and simultaneously working on the integration side with DiCentral represented something of a challenge.

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“Going through an ERP implementation is a big deal, especially when you’re going from a small system like MAS 200 to a system like SAP R/3. There was a lot of data that we had to move from one system to the other, and it was very challenging for us. But then we couldn’t forget about the EDI because that was very important for us, too,” Rodriguez says.

He adds: “We had to change some things on the fly because some things didn’t work the way that we initially wanted. But the technical team at DiCentral was not only very knowledgeable, they always were on top of things. We were in touch with them constantly, and DiCentral was always able to help us work through any issues.”

Ultimately, Gamo did go live with the ERP system at the start of last year, but it continued to use its old ERP system for EDI for a time after the R/3 launch. Each day, the project team would migrate whatever EDI they had done the previous day, using the old system, onto the new solution. DiCentral’s team helped to set up the mapping for different messages – purchase orders, advanced ship notices, invoices – to Gamo’s trading partners. The delay in switching to the hosted EDI solution had nothing to do with DiCentral, Rodriguez emphasizes. “It’s just because of how complex the migration was.”

Focusing on Other Priorities

Initially Gamo launched with DiCentral by connecting with 13 trading partners. Currently Gamo connects with 17 different trading partners using DiCentral, with plans to add new trading partners to the network over time, when it makes sense, on a case-by-case basis.

Moving to the hosted solution, Rodriguez says, has been a significant boon for his IT staff. “In the past, we had to fix issues at our office and spend a lot time on fixing them. That wasn’t what we wanted to be doing,” he says. Now DiCentral takes the responsibility for responding to any issues that arise as part of its service to Gamo, so moving to the Web-based solution freed up Rodriguez’s staff to work on different projects. “We can focus on our other priorities,” the IT director says.

Gamo also has been able to eliminate chargebacks that used to occur as a result of incorrect data being sent to trading partners. Mike Neadeau, vice president of sales with DiCentral, says that this is typically the case when a

company moves to a hosted EDI solution that offers, as does DiCentral, easier access to transactional data through a Web portal.

“DiCentral’s Web layer captures all the data about the transactions that a company is conducting with its trading partners,” Neadeau explains. “This allows the company to verify the accuracy of data or to provide information about the data to its partners. This is useful, for example, if a partner claims that they didn’t receive an ASN on the 10,000 cartons that you sent them, and says that they’re going to fine you $10 per carton as a penalty. You can go into the system, verify that the ASN went out and was acknowledged with an EDI 997 Functional Acknowledgement, and that the information in the ASN was accurate.”

[Sidebar:] EDI - Sexy?

Is decades-old EDI still sexy? Absolutely, according to Benoit J. Lheureux, a vice president of research at analyst firm Gartner.

Lheureux noted in a posting on the Gartner Blog Network (http://blogs.gartner.com/) earlier this year that EDI continues to be, in his words, “hot.”

“EDI remains — and will remain for years to come — a high-impact, valuable asset to business,” the analyst writes. “More innovative approaches should be used for greenfield projects, but EDI is a well-established approach that is still a vital component of most companies overall B2B strategy...”

Lheureux begins the post by highlighting the fact that he had received three research queries in the space of a few days specifically asking for briefings on EDI. But he points out that often those clients actually want to talk about B2B connectivity more broadly, touching on not only EDI but also XML, Cloud-based solutions and other B2B data tools.

Yes, the analyst acknowledges, the market offers an increasing number of innovative alternatives to EDI. “But you gotta be realistic — and in any well-established B2B community, EDI is ubiquitous — and it works. It still delivers value to business because it automates B2B processes — and can be instrumented to help drive process improvement. What’s not to like about that?”

Delivering value, it turns out, is still very sexy indeed.

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