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TCO Summary

Companies considering an in-house EDI system often underestimate the Total Cost of Ownership (TCO). They may focus on the immediate costs of purchasing the software while paying less attention to ongoing staffing and support expenses.

 A full TCO calculation should factor in:

 1)   Mapping software –This is often a $25,000–$50,000 initial expense. In addition, annual maintenance fees can reach 15% of this figure. UniLink eliminates both of these costs.

 2)   Value Added Network (VAN) fees – Some trading partners will require VAN communications. These fees can amount to $300–$400 per month, not including kilocharacter fees that are proportional to the number of monthly transactions sent and received. With Internet-enabled communication options making VANs less of a necessity, companies may be spending thousands of dollars per year for a questionable return on that investment. UniLink includes any VAN communications at no additional charge. UniLink does not charge for Functional Acknowledgment (997) transactions, although any VAN they use will bill for the kilocharacters required to send and receive these.

 3)   Mapping fees –Most companies calculate the cost of creating, testing, and modifying an EDI map to be $1,000–$2,500 per map. The average for UniLink is less than $250 for each map. Outsourcing to UniLink can yield up to a 10-fold cost savings.

 4)   Staffing –Companies can run into difficulty by trying to add the mapping, testing, and monitoring of ongoing EDI transactions to one employee’s existing workload. The reality is that two full-time employees (FTEs) could be needed, with estimated burdened annual salaries totaling $150,000–$200,000. Outsourcing this effort to UniLink reduces this cost to less than half of one FTE—a substantial yearly savings.

 5)   Training – In-house efforts require trained technical personnel with a deep understanding of the chosen solution. Several classes may be necessary, at a cost of $3,000–$5,000 each. Retraining and staff turnover make this calculation a recurring expense. UniLink takes care of every technical detail and can educate employees on EDI basics, eliminating the associated start-up and continuing costs.

 See the big picture in terms of TCO to avoid unexpected, unforeseen costs to your business.

 Please contact David Humer at 770-263-5370, or visit unilinkgroup.com for more information.