Over the past few years, APIs have steadily gained traction. Rumors have spread that someday APIs will replace EDI systems. However, APIs and EDI systems are not mutually exclusive; in fact, there are advantages to taking a blended approach.
We have identified five benefits to blending APIs and EDI:
- Instant information transfer
- Faster deployment
- Greater connectivity to information sources
- Overcoming the deficiencies of other architectures
- Easier onboarding
Read on to learn how the combination of EDI and APIs can benefit your business.
What Are APIs?
Before we discuss the benefits of blending EDIs, we will spend a little time going over what APIs (application programming interfaces) are.
The best way to think of APIs is as a wall socket. A wall socket allows you to utilize electricity by plugging in a device. Think about electrical outlets in Canada and the US; they have the same number of openings, and they deliver the same amount of electricity at the same frequency.
APIs are similar to electrical sockets in that they allow you to consume a service, and they deliver the service in a way that a given application can consume. For example, an API could connect a data source to a particular application.
Will APIs Replace EDI Systems?
Now that it is clear what APIs are, we will explore why the aforementioned rumors about APIs replacing EDI systems are prevalent.
It is true that EDI is a legacy system. However, many companies still use them; after all, if it ain’t broke, don’t fix it. Moreover, the firms that do not use EDI systems are not digitized enough yet to utilize APIs.
Rather than APIs supplanting EDI systems completely, there is a place for B2B integration that blends APIs and EDI systems. APIs and EDI systems can work together to deliver users a number of benefits.
Benefit 1: Instant Information Transfer
One of the benefits of blending APIs with EDI systems is instant information transfer. APIs bring real-time capabilities to B2B integration.
With APIs, you can do things like query the current status of an order or shipment. Do you want to know where in the world that order of screws is? A few clicks give you the answer.
“APIs deliver real-time capabilities to B2B integration.”
In addition, you can automate EDI transfers and integration with APIs. When APIs are part of a hybrid B2B integration platform, you can govern the information that is located on-premises or in the cloud.
The reason that EDI and APIs make a great combination is that EDI systems can fill in the gaps that APIs do not quite address. For example, organizations have to write code or use an integration tool to consume the APIs, whereas an EDI system does not place the entire burden of B2B integration upon the company’s shoulders. Furthermore, APIs cannot deliver large files the way managed file transfer (MFT) can.
“EDI and APIs make a great combination because EDI systems fill in gaps left behind by APIs.”
APIs’ ability to transfer information instantly is part of a broader business transformation. The combination of EDI and APIs allows firms to gain a competitive advantage. When you know what is happening sooner, you are better prepared to handle challenges (or seize opportunities) as they arise.
Benefit 2: Faster Deployment
When APIs were first developed, you could have easily described them as code-intensive, laborious, fragile, and frighteningly time-intensive. However, that is no longer true. Today, developers use technologies such as JSON, OData, and Swagger OpenAPI Specification, which all make API creation faster and easier.
That means you will have faster access to your EDI information. As mentioned earlier, APIs let you query information you would not be able to access with an API alone. You can gain greater insight into your supply chain, which in turn allows you to better satisfy customers.
Benefit 3: Greater Connectivity to Information Sources
Yet another benefit of APIs is that they connect to far more information sources than EDI systems alone do. They easily link to databases, applications, and other systems. Because APIs are lightweight, they can even couple to mobile phones.
EDI systems, on the other hand, are “heavier.” They need to be managed more carefully, and connections are not attained quite so easily. Thus, the combination of EDI and APIs is quite powerful.
“APIs connect to far more information sources than EDI systems alone.”
Although it sounds cliché, information really is power. When you can tell your clients that they can expect your shipment on a certain date, and you have the proof to back up that statement, you build a trusted relationship. More clients will want to do business with you because they know they can rely upon you to deliver what you say you will deliver when you say you will deliver it.
Benefit 4: Overcoming the Deficiencies of Other Architectures
As technologies have evolved, the need to integrate them into one another has grown. Having silos simply is not useful; systems need to communicate with one another and share information in at least one direction so that employees can do their job. The result is that software engineers developed a number of architectures to enable this data sharing.
APIs are the latest in a line of architectures including service-oriented architecture (SOA) and the enterprise service bus (ESB). SOA refers to a collection of services that communicate with one another; these services must be connected to one another to pass information back and forth or to coordinate activities. Web services are the natural offspring of SOA, and they are the underpinning for implementing software nowadays. Additionally, SOA has led to the development of ESB, a middleware tool that distributes work among an application’s connected components.
“As technologies have evolved, so too has the need to integrate them into one another.”
While ESBs have benefits, there is one significant drawback; they do not handle external interactions. SOA and ESBs are meant for internal interactions. That is where APIs come into play. They specify how software components should interact with one another, including how external data sources (such as Big Data and social media) connect to applications.
That being said, APIs have shortcomings themselves. As mentioned previously, APIs do not integrate. You still need the integration backbone of an ESB. Additionally, SOA frameworks cannot support API management.
“APIs have some shortcomings, such as lack of integration.”
Enter B2B integration. Modern B2B integration suites support APIs as well as EDI and MFT. You do not need to implement multiple point tools for APIs and middleware; everything you need is in one place, which saves time and money.
In addition, a B2B integration suite provides you with greater visibility. You are not checking multiple point solutions; instead, everything you need is in one place.
Benefit 5: Easier Onboarding
Today’s business environment requires an efficient and fast information transmission between business partners. Yet, that can be a challenge; some companies use legacy technologies, while others store information in the cloud. Do not forget about a wide variety of integration techniques, which add further complexity to the mix.
Onboarding your customers, that is, connecting them to your data sources so that you can communicate clearly and easily, becomes cumbersome. You will need EDI and protocols such as AS2 for certain business processes, though you will also need API support to deal with cloud applications (and even some on-premises applications, too).
You cannot abandon one onboarding technique at the expense of another. Instead of picking one method and running with it because it sounds like it has greater staying power, you should consider your ecosystem’s data exchange requirements. Those requirements may be a mix of EDI protocols and APIs.
Keep in mind the limitations of each method. One crucial limitation of APIs is that they are not as secure as EDI protocols. Their insecurity makes them a poor choice for a highly regulated industry that demands high levels of security, such as finance.
“APIs are not as secure as EDI protocols, making them a poor choice for the finance industry.”
Additionally, remember that EDI and APIs complement each other. APIs can find information in EDI systems that previously was not available without them. By the same token, EDI systems allow downstream business processes to unfold as they are supposed to and allow for data orchestration. Here is an example to illustrate: an API can help a customer find a particular item within an online catalog, while the EDI system permits the customer to place the order and set the shipping and fulfillment process into motion.
EDI systems are not going anywhere anytime soon, but it is vital to recognize that APIs will play a greater and greater role in the IT landscape in the near future. Savvy organizations will use both EDI and APIs in their B2B integration approach to combine the best of both worlds. To learn more, get your free B2B Integration and EDI Architecture Documentation template today.