Pandemic-related disruptions, technological advancements, and evolving customer expectations have made global supply chains complex and dangerously unstable. As a result, integration has become imperative in supply chain management.
To survive current upheavals and thrive in the new normal, any business whose bottom-line hinges on supply chain stability must implement technologies and workflows that streamline its interactions with trading partners. With robust integration, you can create a centralized, synchronized data ecosystem with which your enterprise can respond to disruptions effectively.
When it comes to supply chain data integration, you have two fundamental options: EDI and API. At their core, EDI and API serve the same purpose of offering fast, consistent, and cost-effective B2B data transfer. However, with API the new kid on the block presumably threatening to upset the status quo, a debate has sparked on which solution will prevail in the future.
In truth, although EDI and API are different, they are two sides of the same coin. By making the best use of both, you can overcome the hurdles that each technology presents and achieve your supply chain integration goals.
This article looks into EDI and API and how you can balance the two to excel in supply chain integration.
What is EDI?
Electronic Data Interchange is a digital data exchange protocol that enables the transfer of structured documents like purchase orders and invoices between businesses. An EDI-capable platform translates documents into standardized formats to automate B2B transactions. By eliminating manual documentation, EDI minimizes errors and accelerates business cycles.
EDI is a viable integration option for companies with a long-standing relationship with their partners and which require strict adherence to pre-set terminology and formatting styles. Furthermore, EDI solutions are set up to offer access only to authorized partners and use audit trails to track usage, minimizing the chances of data breaches.
Where EDI integration shines:
- Automation: EDI minimizes human intervention and errors by using predefined standards to enable automated machine-to-machine data sharing
- Prevalence: Because of its long-standing popularity, businesses use EDI widely. As a result, it can be a straightforward way to integrate new partners.
- Security: EDI solutions offer access only to authorized partners and use audit trails to track usage, minimizing the chances of data breaches.
- Compliance: Regulatory bodies recognize EDI as a trusted solution due to its long history.
What is API?
Application Programming Interface is a set of connectivity protocols that allow different software systems to communicate by meeting predefined requirements. An API-capable platform lets apps share data through software integration. It is a cost-effective, reliable way to integrate business systems without extensive development.
APIs are ubiquitous today, thanks to the increasing number of digital services such as online payments, ride-sharing apps, and document collaboration. According to Gartner, API currently handles 25% of all B2B interactions, and the number is steadily rising.
APIs have garnered attention as a supply chain integration solution in recent years because of their speed, simplicity, and flexibility compared to EDI.
Where API shines:
- Speed: Unlike EDI, which uses batch data transfers, API utilizes real-time software synchronization to update information as it becomes available.
- Simplicity: Trading partners do not need additional customizations and matching formats to connect as long as they use the same software.
- Flexibility: The use cases for APIs are limitless. Any business that uses software to automate its operations can essentially benefit from API integration.
- Accessibility: API communication remains open around the clock, enabling 24/7 B2B collaboration.
API vs. EDI: Integration Challenges in Modern-day Supply Chains
As the primary facilitators of B2B integration, API and EDI each have compelling strengths. Depending on the nature of your supply chain, either protocol can enable you to achieve robust and resilient partner integration.
API comes with technological advancements that make it simpler, faster, more flexible, and more accessible than EDI. On the other hand, EDI has been in use for decades and is infused into the fabric of supply chain integration. Its prevalence makes it the more reasonable choice for data exchange automation in many business relations and enables it to offer superior security and compliance.
However, thanks to a continuously evolving business landscape, enterprises have encountered notable challenges when pursuing integration with either EDI or API:
- EDI is often expensive to implement. Synchronizing systems and training employees on EDI best practices can take months and usually require third-party EDI specialists.
- EDI standards are pre-determined and rigid, requiring all partners looking to integrate must agree to use the same transmission guidelines, including methods, translations, and data formats.
- API lacks widespread and established standards, which potentially limits the number of partners you can integrate without requiring them to invest in a new system.
- Some of the numerous types of API offer low-quality integration. To reap full benefits, enterprises must choose top-range solutions, which can also be costly to implement.
- API is not designed for sharing large data volumes. Its synchronous real-time data transfer is inefficient when it comes to batch document sharing.
How Can API and EDI Work Together to Overcome Data Integration Hurdles?
Considering the individual limitations of EDI and API, pursuing supply chain integration with either option can lead to missed opportunities. Businesses achieve successful integration when trading partners exchange information in real-time using the most efficient protocol available.
For this reason, integration providers are increasingly combining EDI and API into comprehensive integration solutions that offer reliable and adaptable supply chain connectivity.
While integrating dissimilar systems typically requires an EDI strategy that establishes a standardized way to process and share documents, API integration can be a reasonable alternative when some enterprises are not EDI-ready.
Used together, EDI and API can give you all the solutions you need to interact with your partners efficiently, regardless of their infrastructure. As a result, you can keep your supply chain running smoothly and integrate new partners with speed and simplicity.
Let Remedi Help You Balance API and EDI for Successful Supply Chain Integration
In today’s exceedingly dynamic supply chain environment, forward-looking businesses must have all the tools and solutions they need to create well-integrated partnerships at their disposal.
So, unless you can accommodate the shortcomings of EDI and API and are ready to narrow your options to only the partners that support one or the other, your integration strategy must involve both protocols.
With Remedi, you do not need to choose between API and EDI integration.
Contact us today and learn how REMEDI can make your B2B integration easier with a cost-effective API-capable EDI solution based on your unique needs.
