Can API replace EDI?

Introduction:

EDI has been an inevitable part of the supply chain ecosystem. It has been around for decades and is still an active mechanism to transact among trading partners. But, like every industry, technology in the Supply chain industry is evolving. Almost all software systems such as ERP, WMS, Shopping carts are becoming more API-centric. EDI is increasingly becoming a silo that is standing alone needing exclusive developer resources and infrastructure. In simpler words, you can hire an API developer to manage APIs of all your systems, but you cant use him/her to manage your EDIs. 

It is high time we address the problems underlying EDI. If we look at EDI vs API, APIs are easier to transact with as the learning curve far less steep. So if APIs are easy, why do we still use EDI? Shouldn’t EDIs be replaced by APIs by now? Let us find out. 

EDI – A real comfort?

The supply chain industry is a very interdependent and interconnected network. It involves many stakeholders’ participation. As everyone is used to having transacted using EDI and have invested money and time, it is difficult for a change to happen which eventually will disrupt the entire network. Why change something that has been working?

Technology takes its own time for people to learn and adapt to it. Likewise, EDI has been a practice and has been followed religiously among the supply chain ecosystem for many years now. Changing a practice that has been there for decades seems like a herculean task.

As Henry Ford said, “If I had asked people what they wanted, they would have said faster horses.” To be pretty clear, we can be sure people who have been working with EDI are perhaps very comfortable with it, but the question Industry leaders are asking is, whether using API would break down the EDI silo and perhaps make a more homogenous IT strategy. This goes back to our earlier point, about making every information system API-centric, which is where the world is heading. 

Problems with current EDI

Though EDI has been around for a long time and is stable, when we pit EDI Vs API, there are a greater number of cons that outweigh the pros. in EDI. EDIs are:

  • Extremely complex to decipher
  • EDI development toolsets, ecosystems are far behind other developer ecosystems such as API world, resulting in a relatively poor developer experience.
  • Lack of ability to have real-time validations results in chargebacks and manual back and forth communications to address the issue.

EDI is not impossible to work with but it can be made easier considering the problems that it imposes. Certain practices can make the best out of the situation. EDI requires considerable expertise and a good thing about using EDI is that all the mistakes are preventable only if executed correctly and without mistakes for every transaction. This takes considerable expertise.

So how do you migrate away from EDI to API without disrupting networks that have been set up across decades?

The answer is by using APIs for sending and receiving EDI. We are calling them EDI-as-API solutions.

How does EDI-as-API work?

Many providers can help you with EDI-as-API transactions. What these providers do is

  • Once you send them the JSON file to their API
  • They validate your data in real-time
  • They generate EDI and send it to your partner
  • Your partners send EDI to the provider’s AS2 connection
  • Your partner data is validated for any issues in real-time
  • Then EDI data is converted to API and sent it across to you

Benefits of using API-as-EDI:

There are certain advantages like real-time validations, easy understanding, etc. to using APIs. But with EDI Vs API analysis, we found that most of the companies are increasingly wanting to trade using API but are forced to have EDI expertise as requested by their trading partners. Also, some companies are first-time EDI transactors for whom APIs are easy compared to EDI. For these people, EDI-as-API would be the perfect solution.

With EDI-as-API solutions, we can assist small businesses to transact EDI at a much cheaper cost and faster onboarding time.

Apart from the cost factor, there are additional benefits to using EDI-as-API. They are:

  • Developer friendly
  • The time taken to implement EDI and transactions are drastically reduced
  • There can never be an issue of chargebacks with real-time validations, which is an inherent feature of API.
  • Developers and other stakeholders don’t face a very steep learning curve with API.
  • Focus on your business and not EDI 

Conclusion:

We are not trying to totally eliminate EDI. We are just trying to make it easier with an API interface. When EDIs are transacted using APIs, it creates a far richer developer experience both during the development and production stage. It’s all about the balance.

If you want to check out how a typical EDI-as-API platform works, check out Zenbridge.

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