EDI vs API? It’s a false debate
According to EFT, 55 percent of supply chain executives considered web service APIs as an alternative to EDI. But we should know better by now than try to write off electronic data interchange (EDI) again. This isn’t about replacement. It is, as always, about integration.
The development of application programming interfaces (APIs) and API management complements traditional B2B technologies such as EDI. The key is to understand the technology that best meets your business use case. By integrating your API capabilities with EDI, you can better connect and communicate with your entire ecosystem of trading partners.
So when it comes EDI and API, think about partners, not contenders. In other words, it’s not Tyson vs Holyfield. Instead, it’s Laurel and Hardy, Simon and Garfunkel, or whoever your own favorite duo is.
What people say about EDI vs APIs
According to some commentators and experts, the API is the new kid on the block. It’s smart, fast, easy and cheap to develop API connectivity. It enables speedy, real-time data transmission between business applications, devices and people. APIs are great for connecting your on-premises and cloud-based systems. And they can handle most of the B2B interactions that EDI can, so why wouldn’t you use APIs?
(By the way, you can find a more technical overview of APIs by reading our blog: What is API integration?)
On the other hand, EDI has been around since the 1970s and has a reputation for being an outdated technology. But EDI remains solid. It’s safe and reliable. It might not be exciting, but it gets the job done. Do you know what else has been around since the 1970s? TCP/IP, the protocol that runs the Internet.
(Again, you can read a more technical overview of EDI here: What is EDI?)
When asked why more organizations haven’t moved from EDI to APIs, many commentators blame intransigence. They say EDI isn’t going anywhere because so many people use it and are comfortable with it. The program of transition would also be costly and hugely complex. So organizations just try to make the best of what they have.
I find this a little insulting to EDI. It’s as if the capabilities of EDI were frozen in 1987 and haven’t evolved since. For me, it’s the commentators and not EDI that are stuck with legacy thinking.
EDI and APIs: Better together
Compare EDI to APIs and it becomes clear that neither technology is perfect. Each has its strengths and weaknesses. The truth is that the strengths of one often offsets the weaknesses of the other. Together, they represent a formidable solution for B2B interactions.
EDI allows the secure exchange of a wide range of business documents in a standard format that works for trading partners. It can handle batch processing in the volumes needed for today’s supply chains. And it provides security, auditability and reliability, as well as a range of value-added EDI services covering areas such as community management and analytics.
But EDI can struggle with real-time data transfer. That’s an area where APIs are strong, although they’re weaker in areas such as security and data volumes.
There’s also something that’s rarely mentioned: In some ways, the growth of APIs is creating an environment that EDI has evolved to address. While APIs can establish a direct connection between systems, their use can also lead to an explosion in the number of separate API connections an organization must manage—whether those are internal connections between systems or external connections with trading partners.
According to one API provider, the number of its API collections—the places where developers store their APIs—has risen from less than half a million to more than 46 million in five years. API management is becoming a major challenge.
Choosing the right EDI integration platform
The challenge of managing multiple connections is something that EDI addressed a long time ago. The original EDI VANs were developed to allow many-to-many connectivity so you didn’t have to worry about the standards and formats of the organization you were trading with.