Are these two systems really all that different?
When it comes to supply chain management, EDI and API are the only options for effective optimisation. While often seen as rivals, these two software solutions for data transfer have differences, similarities and the ideal moments for use.
But when is it best to use EDI? Or is API more suitable for your business?
It depends upon a huge number of factors, including your business model, size and how you are looking to scale up your business.
So whether you’re B2B or B2C, picking the right software solution is as easy as 1,2,3.
What is EDI?
EDI stands for Electronic Data Interchange and it’s an experienced veteran of B2B transactions for many decades.
EDI was created in the 1970’s and despite general optimisations and tweaks along the way, the general process hasn’t undergone any massive changes during that time. This is one reason why many businesses view it as outdated.
But if it isn’t broken, why would you fix it? The same could be said of TCP/IP – and that’s the protocol that runs the internet!
It’s solid, reliable and time-tested. It reduces the amount of manual processing involved with bulk data between companies including Purchase Orders, Invoices, ASNs and many more. It is the reason why B2B companies can effortlessly communicate without errors and flaws thanks to its established messaging standards.
A priceless advantage for businesses that would otherwise have to waste thousands of man-hours to process the data!
Why is EDI Popular?
Due to rate technology advances, you’d imagine that EDI should be defunct by now. But you’d be wrong.
EDI establishes standard data messaging protocols between systems. These standardised electronic formats make it crystal clear for systems to communicate without flaws, errors or miscommunications of any kind.
On top of the clarity that it offers, it also allows you to send in bulk. Companies can transfer hundreds and hundreds of documents in a single go providing a convenient and efficient supply chain while minimising inaccuracies.
It’s also one of the most secure methods of transferring sensitive data. While some EDI solutions use peer-to-peer networks or serials links, most EDI solutions are done online. They often only provide access to predefined users, and use audit trails and archives to track the usage.
So in short, EDI is:
- Allows you to upload in bulk
- Minimises inaccuracies
But let’s take a look at API.
What is API?
Application Programming Interface, or API is considered the rival of EDI. Why? Because it deals with data transfer between systems as well, but it works in a very different way.
API is a set of programming instructions that enable different systems to “talk” with each other. In much the same way a user interface allows users to communicate with computers, an API helps translate between them.
And you probably use it more than you think.
If you’ve ever paid with your card online, an API helped that to happen. You entered your details into the web page that used an API to contact a remote application. Once that application confirms the data was correct, the API will then talk back to the web page and tell it that the purchase was confirmed!
Why is API Popular?
Whereas EDI makes bulk uploads of data an absolute doddle, API specialises in real-time data communication.
This means that whether you are on-the-go, or using your mobile device, an API can immediately update whatever data you need. It’s quite literally watching events unfold in real-time which is a huge boost to efficiency in your supply chain.
When it comes to using API management in your supply chain, you can automatically add pickup requests into the carrier system which reduces the time needed to input each one manually.
In short, the flexibility of API is what makes it an attractive addition to your supply chain.
A Comparison of EDI and API
|Call pattern||Asynchronous for batch exchange||Synchronised real-time exchange|
|Data Size||Suitable for mass data||Not suitable for mass data|
|Standards||Industry standards and region-specific options||No established standards|
|Onboarding||Easy on-boarding||Data layers must be built|
|Security||Fulfils compliance regulations||Not always regulation-compliant|
|Common Usage||System to system batch data conversion||Real-time single request for information|
How to Choose Between EDI and API?
It’s easy to come up with a broad, yet inaccurate statement such as “B2B companies should use EDI, and B2C are better off with API!”
The truth is much more complex, because both have their places.
What EDI makes up for in massive transfers of data, it lacks in real-time communication which isn’t effective for every business. Whereas what API makes up for in flexibility, it loses in the amount of potential integrations required. With new APIs being created every second, you could soon run into the thousands.
So, between EDI and API, you should choose what suits your business model best. Or if you can, use both to maximise the effectiveness of your supply chain!
An EDI Solution
If you elect for an EDI solution, you’ll need a good one.
You’ll need one that is delicate enough to handle the needs of smaller businesses, yet scalable enough to handle the large loads of bigger businesses. Ideally, you’d want an EDI with a quick and simple on-boarding strategy that guides you through your new software solution.
You need the best EDI Solution.
Our EDI integration is like the software itself, fast, simple and secure! You’ll receive a short onboarding strategy to get you up to speed with the new tool at your fingertips and you’ll be ready to go.
With the cost-saving potential of EDI and the knowledge that your data is safe, secure and transferable, you can focus on scaling up your business. Just talk to one of our supply chain specialists today to learn more, and remember to check out our eCommerce resources page to brush up on the latest in software and strategy!