Case Study: Gamo Outdoor USA Takes Aim at EDI Integration
The leading manufacturer of outdoor sporting goods targets a move to hosted EDI as part of a transition to SAP R/3
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 the market includes several established players. Rodriguez says he reviewed four companies before settling on Houston-based DiCentral, which helped establish the Web-hosted EDI space in 2000. 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.
Rodriguez says that he tapped DiCentral for the project in part because of the favorable feedback that he read online. DiCentral, in particular, has developed a reputation as a good option for companies looking to do EDI in conjunction with an SAP ERP system.
Rodriguez also checked the customers that DiCentral was working with; many 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, I knew they would have the integrations. That would make it much easier for my company."
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.
"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 we had to move from one system to the other, and it was very challenging. But we couldn't forget the EDI because that was very important, too," Rodriguez says.
He adds: "We had to change some things on the fly because some things didn't work the way we initially wanted. But the technical team at DiCentral was not only very knowledgeable, they always were on top of things."
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. 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
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 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," he 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, DiCentral VP of sales, says that this is typical when a company moves to a SaaS EDI solution that offers a proven set of EDI maps through which multiple users access the retailer. "Since we are a SaaS model, many of our customers are utilizing the map sets we build to any given retailer for Purchase Order, Invoice, and Advance Ship Notice. When the next user connects through those same maps, they have been proven to work many times over; this ‘proven quality' helps us provide cleaner data for both sides and eliminate mistakes.
"DiCentral's Web layer captures, and gives clear visibility, for all the transaction data exchanged with trading partners," Neadeau adds. "This allows the company to verify the accuracy of data or to provide information about the data to its partners."
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