It’s Not EDI vs. API for B2B Integration, It’s Both
October 20th, 2020
One of the biggest questions for B2B integration these days seems to be whether to choose an EDI solution or an API solution for document exchange. If you’re looking for a debate on the advantages of EDI vs. API, you won’t find that here—but that’s probably for the best. When it comes to modern B2B data and systems integration, the most successful businesses have incorporated both to achieve an end-to-end overview of their supply chain and logistics operations, one that simply can’t be attained by choosing EDI over API or vice versa.
Even though B2B integration relies on both EDI and APIs, it’s worth mentioning that there is a valid EDI vs. API debate when it comes to electronic document exchange. Let’s start with that:
What is EDI?
If you’re wondering which is the better choice, that is, EDI or API, you’re likely already familiar with EDI. But here’s a quick intro just in case: EDI stands for Electronic Data Interchange, and it’s the system-to-system electronic exchange of business documents in a standardized format. You can read all about the specifics in another blog post, EDI 101: What is EDI?
Aside from the basics, there are a few main things to point out about EDI that are helpful in the EDI vs. API discussion:
- EDI replaces traditional (paper, email, fax-based) document exchange. It consists of advanced rules for defining individual data and data relationships contained in documents.
- Country- and industry-specific standards and protocols make EDI the most preferred B2B data exchange method worldwide. It is well-established, commonly understood, and secure.
- Because EDI standards and protocols are well-established, change is infrequent. Once an EDI service has been implemented, that’s pretty much it; there’s no lifecycle management for EDI.
What is an API?
API stands for Application Programming Interface. A full explanation can get extremely complicated, and quite honestly isn’t necessary for understanding the advantages of APIs in comparison with EDI. The most simple explanation of an API is that it enables real-time data exchange between two or more systems. In other words, an API provides a “door” into a third-party system so that the information contained within that system can be accessed and used by another system.
Using the 3 main points for EDI (listed above) as a reference, here’s how APIs compare:
- APIs can replace traditional document exchange methods, but unlike EDI, that’s not the sole purpose. An API can enable single sign-on (“log in with…”), provide PayPal as a payment option on an e-commerce site, and so much more. The capabilities are endless.
- APIs do not have set standards and protocols (yet), and most businesses choose to communicate with trading partners primarily through EDI because of this. APIs instead supplement EDI exchanges.
- APIs require lifecycle management, and API versioning in particular. Certain triggers, like a change in data format, requires an API modification which may or may not break an existing business integration.
EDI vs. API for Electronic Document Exchange
From everything you’ve read so far, it may seem like EDI is the clear choice for electronic document exchange. That’s because it is—for the time being, at least.
Without going into too much detail, EDI isn’t going anywhere anytime soon. There are two reasons for this: First, EDI is at the core of supply chain and logistics processes for the vast majority of businesses, including government organizations. Replacing EDI systems entirely with an API-based structure is a huge undertaking, not to mention a significant investment on top of what these businesses have already invested in EDI.
Second, EDI is built on well-established standards and protocols and APIs lack commonality. This is something that can’t be ignored, especially when it comes to data security and legal compliance (e.g. archiving requirements). It’s highly unlikely that APIs replace EDI communication before all of this has been worked out. Nothing is impossible, of course, but it would come as a surprise.
EDI vs. API for B2B Data & Systems Integration
Even though EDI comes out on top as the preferred electronic document exchange method, there seems to be some confusion in terms of which is the better option for B2B data and systems integration. Here’s some clarification: EDI data can be integrated, but EDI itself is not an integration method. APIs on the other hand enable B2B integration. That means the EDI vs. API debate in this context is void.
To clarify, there are a few ways in which two systems can be integrated, but API-led connectivity has many advantages when compared with, for example, point-to-point (P2P) connectivity. Because of this, APIs are the only scalable solution for EDI integration for growing businesses. Meaning, even the businesses that are primarily exchanging EDI messages are utilizing APIs to some extent, but not necessarily as a replacement for document exchange.
This post was written by Courtney Yocabet, Global Marketing Specialist based in Breukelen, the Netherlands
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