Electronic Data Interchange (EDI) Software Market Size, Share & COVID-19 Impact Analysis, By Component (Software and Services), By Deployment (Cloud and On-premises), By Industry (Healthcare, Automotive, Financial Services, Manufacturing, Retail, Logistics, and Others), and Regional Forecast, 2022-2029

The global Electronic Data Interchange (EDI) software market size was valued at USD 1.70 billion in 2021. The market is projected to grow from USD 1.88 billion in 2022 to USD 4.04 billion by 2029, exhibiting a CAGR of 11.6% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with EDI software experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market had exhibited a decline of 10.1% in 2020 as compared to 2019.

The software considered in the scope includes TrueCommerce EDI, Boomi B2B EDI, Epicor EDI, and more. The growth of the market is primarily driven by the rising preference of large organizations toward in-house processing and digital transformation & process automation. In addition, the rising adoption of electronic data transactions across various industries is expected to drive market growth during the forecast period. The major software providers are focusing on adopting various marketing strategies, including mergers & acquisitions, joint ventures, and others, to strengthen their position in the market size. For instance,

• In October 2019, Epicor Software Corporation acquired one of the leading providers of business visibility software and solutions - 1 EDI Source, Inc. The aim is to offer a wide range of data exchange software solutions to Epicor's existing and new customers.

COVID Impact  

Growing Digital Shift Amid COVID-19 Pandemic to Boost Market Growth

The COVID-19 pandemic has significantly impacted the market during the years 2020 and 2021. Several business functions across verticals have been adversely affected including the electronic data interchange process. The industries such as retail, logistics, manufacturing, and healthcare witnessed drastic changes in their ways of operations and customer management amid the pandemic. However, the significant changes and growing demand for smoother supply chain processes are anticipated to surge the demand for Electronic Data Interchange (EDI) software.

The retail, healthcare, and other industrial sectors have started adopting cloud-based data exchange software to offer lifetime access to the data. Globally, government bodies along with organizations are focused on enrolling recovery actions for the post-COVID-19 impact. According to the World Economic Forum (WEF), in April 2020, contactless digital payment means such as quick response (QR) codes, near-field communications (NFC), facial recognition, and others helped various countries to cope with the COVID-19 crisis, thus propelling the use of electronic paperless transactions. Various companies are opting for innovative contact-less solutions to avoid the spread of coronavirus. For instance, in January 2022, Microsoft Corporation in partnership with FedEx Corp. launched a logistics-as-a-service cross-platform. This platform integrates with different order management applications such as online e-commerce marketplaces, enterprise resource planning, electronic data interchange, and other ordering channels. Thus, the demand for Electronic Data Interchange (EDI) software is predicted to grow significantly to offer an efficient customer experience in the coming years.

LATEST TRENDS

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Incorporating Advanced Technologies to Boost Market Expansion

The incorporation of advanced technologies in EDI systems has triggered a new path for the data interchange process, offering several benefits to businesses. Data interchange transactions are crucial to the B2B and B2C processes, from small and medium enterprises (SMEs) to large organizations as they offer better integration for the SMEs with larger firms.   The future of the retail supply chain entirely depends on technological innovations, namely the Internet of Things (IoT), Blockchain, and Artificial Intelligence (AI), among others.

The key benefits delivered by advanced solutions through B2B integration and automation are as follows:

• Saves time and money by automating the traditional manual electronic data process


• Improves efficiency and productivity with greater accuracy


• Reduces errors by automating the data formatting process


• Improves traceability and reporting to support data collection, visibility, and analysis


• Supports positive customer experiences with a reliable product and service delivery

Thus, the digital technology implementation enabled by AI and IoT is augmenting the data exchange process and is likely to boost Electronic Data Interchange (EDI) software market growth.

DRIVING FACTORS

Increasing Adoption by Small & Medium Businesses to Drive EDI Software Market Growth

The Electronic Data Interchange (EDI) software aids small and medium organizations to automate several transactions with other companies that occur frequently, including exchanging invoices, orders, and advanced shipping notices. The inventory software solution also aids to manage the various solutions, creating fully integrated, end-to-end, and automated EDI solutions. This significantly increases the productivity, efficiency, and profitability of smaller and mid-sized businesses by enabling fully-automated transaction processing, augmenting the market worldwide.

The software enables small organizations to enhance customer satisfaction and brand loyalty by offering online recommendations. Also, it helps small organizations to seamlessly transact with large organizations across the globe by solving technical and business connection requirements productively and efficiently. As per the statistics shared by the Global Standard One (GS1), in 2019, the U.K. grocery business saved around USD 470 million by using software solutions. The software aided in fastening transactions, delivery, payment, and invoicing, as well as improving the visibility of goods in the supply chain.

RESTRAINING FACTORS

Threat of Application Programming Interface (API) as a Substitute to Inhibit Market Growth

Electronic data interchange solutions offer a basic exchange of business documents using multiple standard electronic formats via computers between business partners. It is feasible to carry on similar transactions using API, such as sending order stock, and invoices, and carrying out other similar processes, thus creating a substitute for the traditional data interchange systems. APIs are often faster, flexible, and cost-effective than electronic data, and are typically synchronous and boast smaller payloads. An API is integrated with a REST (Representational state transfer), a systematic architectural style, that is easy to modify for developers as per the necessity. It also offers a safe and trusted data exchange service, wherein it is also useful to track the data or order stock that has been lost and is hence emerging as a potential substitute threat for the technology.

SEGMENTATION

By Component Analysis

Rapid Digitalization in Industries to Surge the Software Demand

Based on the study, the component is categorized into software and services.

Software is expected to gain maximum share during the forecast period. The increasing digitalization across industries is driving the adoption of software to enhance ordering management operations. Also, the expansion of industries such as e-commerce, retail, supply chain and more are implementing the software for data analysis, customer experience, and seamless communication.

The services are likely to showcase rapid growth during the forecast period. The increasing demand for software is expected to boost the demand for managed services for a proper and continuous flow of applications.

By Deployment Analysis

Higher Scalability Offered by Cloud-based EDI to Boost Market Expansion

The deployment is categorized into clouds and on-premises.

Amongst these, the cloud-based type is estimated to have a significant portion of the market share and is expected to grow at a higher rate in the coming years. This is owing to its characteristics of providing newfound flexibility for enterprises and the ability to save time and operation costs by improving agility and scalability. The adoption of cloud-based platforms is increasing across companies, especially among those who have a wide presence across different geographies or are planning for aggressive expansion. These platforms allow the end-users to connect with customers, partners, and other businesses with minimal effort. In addition, the cloud computing features allow the user instant provisioning of any software or application and eliminate time spent on installation and configuration.

The on-premises segment is anticipated to grow at a considerable rate. On-premises data exchange solutions can allow enterprises to maintain a level of control.

By Industry Analysis

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Seamless Communication Feature to Surge the Adoption of EDI in the Logistics Industry   

The industry is categorized into healthcare, automotive, financial services, manufacturing, retail, logistics, and others.

The logistics industry is projected to hold a higher market share during the forecast period. This is owing to the introduction of new technologies in logistics services including carrier-based data analytics, consolidation of deliveries from multiple shippers, and automated scheduling. The implementation of data interchange solutions in the retail sector is increasing as they drive global data synchronization and streamline the Direct Store Delivery (DSD) procedures.

The increasing demand for digital payment systems  fuels the adoption of Electronic Data Interchange (EDI) software in financial services. oftware adoption is anticipated to grow in the healthcare industry in the coming years. The software allows healthcare organizations to efficiently transmit medical reports, patient cases, or perform transactions including claims and encounters information, eligibility, payment and remittance advice, and others.

REGIONAL INSIGHTS

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The global Electronic Data Interchange (EDI) software market scope is classified across five regions, namely North America, Europe, Asia Pacific, Middle East & Africa, and South America.

North America is expected to gain maximum revenue share with market size of USD 958.9 million in 2021. The expanding manufacturing, healthcare, retail, and automobile industries are boosting the demand for data interchange solutions across the region. The U.S. is likely to gain maximum share during the forecast period owing to increasing digital business-to-business transactions. For instance, in December 2021, Yamato Transport U.S.A., Inc. announced the implementation of EDI for its logistics systems. This is expected to boost Electronic Data Interchange (EDI) software market share.

The Asia Pacific is expected to grow exponentially during the forecast period. The growth is attributable to the increasing supply chain efficiencies between retailers & suppliers and the rise of the e-commerce industry majorly in developing countries including India, China, and others. In addition, rising government initiatives and growing manufacturing facilities in this region are expected to increase the demand for EDI software among enterprises.

Europe is expected to grow at a substantial CAGR owing to the presence of a considerable number of data exchange solutions and tool manufacturers. The European United Nations have also introduced an electronic data transfer standard ISO 9735 to regularize and comply with electronic data interchange operations.

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The Middle East & Africa and South America regions are expected to experience a gradual CAGR during the forecasted period owing to the rising e-commerce and distribution stores and facilities, the emergence of SMEs engaged in third-party logistics businesses, and growing healthcare and manufacturing infrastructure, among others. Similarly, South America  showcases steady growth owing to the increasing digital transitions. the software is helping in offering continuous connections between small and large enterprises across the industries in the region.

KEY INDUSTRY PLAYERS

Major Players Focus on Global Expansion with Innovative Solution to Boost Market Share

Major players such as Dell Boomi, SPS Commerce, Inc., MuleSoft LLC, and others are proactively strengthening their market position by upgrading their existing product lines to cater to various end-use applications. These key players are now integrating EDI systems with advanced technologies such as IoT, Machine Learning (ML), blockchain, cloud, and others to enhance their product portfolio and deliver enhanced solutions. Further, the major players in the market are focusing on the expansion and development of existing solutions in terms of upgrading and integration of technology, among others.

September 2021 – TrueCommerce Inc. announced the acquisition of EDI and API solution provider, DeCentral Corporation. This acquisition aims to expand the geographical footprints and product portfolio offerings.

January 2020 – Boomi Inc. acquired Unifi Software to expand the company’s market-leading data management platform and integration to accelerate the data-driven insights for the consumers.

List of the Key Companies Profiled:

• Boomi Inc. (Dell Boomi) (U.S.)


• SPS Commerce, Inc. (U.S.)


• Software AG (Germany)


• MuleSoft LLC (U.S.)


• Epicor Software Corporation (U.S.)


• TrueCommerce Inc. (U.S.)


• Rocket Software, Inc. (U.S.)


• Open Text Corporation (Canada)


• Babelway (Belgium)


• Comarch SA (Poland)

KEY INDUSTRY DEVELOPMENTS:

July 2021 – Epicor Software Corporation announced a partnership with IBC Industrial Supply Plus, Inc. to provide its solutions including inventory management, electronic data interchange, customer relationship management, and more.

April 2020 – Data Communications Solutions (DCS) and Cleo announced a partnership to help organizations to modernize the B2B processes by focusing on API & EDI integration. According to the partnership, DCS will offer managed services, support, and implementation for the customers that have selected the "Cleo Integration Cloud" platform to modernize the integration solutions.

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An Infographic Representation of Electronic Data Interchange (EDI) Software Market

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The market report highlights leading regions across the world to offer a better understanding of the user. Furthermore, the report provides insights into the latest industry and market trends, and competitive landscape and analyzes technologies deployed at a rapid pace at the global level. It further highlights some of the growth-stimulating factors and restraints, helping the reader gain in-depth knowledge about the market.

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