Q: Why do many of my large customers require electronic trading to do business?

A: Large companies have collectively invested billions to automate their business processing and to integrate it as part of their enterprise resource planning systems. Over the last decade, much of their commerce-related transactions are leveraged by EDI (electronic data interchange). Use of EDI reduces manual handling costs by several orders of magnitude, while reducing errors, speeding the exchange of transactions, and improving cash flow.

More recently large companies have begun to use newer internet –based protocols to conduct EDI, as well as to provide simpler, web-based alternatives to their suppliers.

Q: Why should my smaller company be prepared to trade electronically?

A: More and more the ability to trade electronically is a condition for doing business with large companies. The smaller company’s ability to meet the electronic trading requirements of its large customers not only gives the small company a significant strategic advantage over its competitors, but helps the small trading partner attain preferred supplier status with its existing customers.

Operationally this capability can eliminate fines and charge-backs from the large customer for the supplier who continues to respond with paper documents and manual processes. The right solution should also help the supplier to improve productivity as well as reduce its own internal handling costs.

Q: What options exist for the middle market company to meet the electronic trading requirements of their largest customers?

A: Until recently, there were really only two choices available to smaller businesses who want to do business electronically with large companies:

• EDI that requires costly and complex investment in IT infrastructure (software, systems integration and expertise; or
• Web-based methods that permit orders to be downloaded and printed from a web-site and allow other transactions to be re-created as a web forms that can be sent back to the large customer’s web-site.

RedTail offers a third option: “Virtual electronic trading” now makes it possible for the middle market supplier to meet the requirements of all large customers, regardless of the specific type of standard (EDI or XML) or communication protocols. RedTail provides comprehensive capabilities for electronic trading to the middle-market supplier through an out-sourced solution, that requires no change to the supplier’s existing business processes.

Q: What is electronic data interchange (EDI)

A: Electronic data interchange (EDI) is commonly defined as the application-to-application transfer of business documents between computers. Many businesses choose EDI as a fast, inexpensive, and safe method of sending purchase orders, invoices, shipping notices, and other frequently used business documents or “transactions”.

EDI is quite different from sending electronic mail messages or sharing files through a network, a modem, or a bulletin board. The straight transfer of computer files requires that the computer applications of both the sender and receiver (commonly known as the “trading partners") agree upon the format of the document, and the business rules which govern their exchange. The sender must use an application that creates a file format identical to your computer application.

When you use EDI, it's not necessary for you and your trading partner to have identical document processing systems. When your trading partner sends a document, the EDI translation software converts the proprietary format into an agreed upon standard. When you receive the document, your EDI translation software automatically changes the standard format into the proprietary format of your document processing software.

Q: What is the difference between EDI and a web form method?

A: EDI is usually integrated with a large company’s ERP/business system and effects true, automated transaction exchange. A company needs a well-developed IT infrastructure to maintain this rather specialized function internally. In contrast, web-based methods can be used with little more than an internet connection and browser; however, every paper-base transaction must be re-entered into an electronic form that is linked the large company’s web site, either directly or through 3rd party service providers. They can multiply the amount of work dramatically for suppliers since different large customers may have different electronic web forms or services. As transactions are re-created in web forms the probability of errors from transcription and from maintaining same data in multiple places increases. However, web forms can be a good solution if a supplier has only one or two customers with low transaction (order) volumes.

Q: How is RedTail different from other solutions?

A: Red Tail’s solution is a unique combination of service and software that provides you, the mid-market supplier, with a cost-effective approach that fully implements electronic trading with all of your trading partners. Our RedTail Transaction Manager™ provides a single, simple interface that allows transactions to be exchanged directly with your accounting system via the internet. Set-up, validation and maintenance of the trading relationship, delivered as an out-sourced service to the mid-market supplier, is an important part of our solution. The RedTail Business Process Integrator? is at the core of this service and permits the extension of business rules and processes for the mid-market supplier, enabling them to meet their large customers on a level playing field when it comes to electronic trading.

Q: How long does it take to get up and running?

A: Most often, RedTail works with the Value Added Reseller of your accounting system who will install the RedTail application and link to the accounting system quickly and walk through its use. The software is pre-configured prior to its installation so there is no disruption to normal routine. Your existing business processes do not change, thus ensuring an exceptionally smooth transition.
Red Tail can be up and running in as little as one week, depending on the number of transaction types and the validation process required by your trading partner. For multiple trading partners Red Tail will put together a mutually agreeable schedule for migration to its service.