55% of supply chain executives consider Web APIs (application programming interface) as an improved alternative to EDI. That’s according to an investigation conducted by the organisation Eyefortransport (EFT).
This research argued that because supply chain data was increasing in scale and quantity, the collection and transmission of information would face new complexities. Therefore, they predicted that, over time, APIs would phase out the use of EDI. It also argued that the primary reasons that companies continue to use EDI are not the solution’s proven benefits. Instead, the inferred selling points were EDI’s familiarity, cost, and use of standards.
So, does API spell the end of the EDI? Unsurprisingly, things are not so simple.
API and EDI: How can they work together?
The development of APIs and API management tools can be complementary to traditional B2B technologies, such as EDI. The key is to understand the technology that best meets your business’s needs. By viewing API as a complimentary tool for EDI solutions, rather than their replacement, and integrating APIs with an EDI, companies can better connect and communicate with supply chain partners. Comparing EDI to APIs, each technology clearly has immense potential to improve the other. Explicitly, the benefits of one solution often offsets the shortcomings in the other. In cooperation, EDI and APIs are the future of B2B interactions.
Therefore, it is reductive for commentators to presume that API is the inevitable replacement to EDI. However, APIs are still a more modern method of integration. Furthermore, the skills needed to set up and run APIs are more accessible for IT graduates and professionals. APIs enable easy to understand, time-efficient, cost-efficient ways to connect systems while also enabling data transmission in real-time between them. They can easily create connections between companies’ internal and cloud-based systems, being extremely quick to implement. Crucially, they can also manage a great amount of the B2B interactions that EDI can.
The endurance of EDI
Conversely, EDI has been around since the 1970s. During its lengthy period of usefulness, it has grown an unwarranted reputation for being outdated, even while continuing to prove itself a safe and reliable choice for businesses to use across their supply chains.
When asked why more organisations have not moved on from EDI and embraced new APIs, commentators often reference the familiarity of the older model. They believe that the main reason that EDI has endured is simply because so many people are still using it and are comfortable with what they know works. Learning how to use a new, more modern platform can be intimidating and challenging.
APIs, compared to EDI, are not in use as widely for B2B integration. Practically, it could lead to an expensive and complex program of transition so that existing files could be reintegrated and team members could be re-trained in how to use this new solution. Legacy applications are rarely compatible with the newer APIs, and this makes the process a daunting one. Based on these arguments, familiarity is the overriding motivator for the endurance of EDI.
How will API and EDI be used in the future?
So, how do these two platforms work together? The most important thing is to acknowledge the differences between them. Compared to APIs, EDI can struggle with real-time data transfer. This is an area where APIs are comparatively stronger. Conversely, APIs are weaker than EDI in areas such as security and the volumes of data it can manage. Without the standards that come from EDI, managing the varying structures and capabilities of different APIs can prove difficult. Also, as new data structures develop, APIs can need constant updating and maintenance for the long-term.
Furthermore, the growth of API makes the utilisation of EDI necessary. While the APIs can set up useful connections between business systems, their use can also complicate systems by increasing the number of separate API connections that an organisation must manage, both internally and with its trading partners.
This makes EDI, a platform designed to manage multiple connections, a necessary part of the future, rather than an easily dismissed relic of the past. At their start, EDI Value-Added Networks it was to allow connectivity between vast numbers of channels, to make sure that documents were compatible with the standards of the relevant trading partners.
For more information on how B2BE and other organisations integrate multiple platforms to combine innovative, modern technologies, such as APIs, with existing and reliable frameworks, such as EDI, be sure to read next week’s blog. We’ll go into more detail on how multi-platform integration can help supply chains.