EDI vs API
EDI has existed for over 50 years and has not seen significant changes to its technology. Are new technologies like APIs (Application Programming Interface) better alternatives for conducting business and trading?
Although EDI has been the standard document exchange method for decades, application programming interfaces (APIs) have been growing in popularity as an alternative to EDI. As APIs continue to gain traction for use as an option for trading partner communications within the supply chain, business executives responsible for evaluating their current B2B programs have wanted to understand the differences between API and EDI integration.
What’s the Difference Between EDI and API?
Both EDI and API methods can be used to transmit data from one business partner to another. But each has its strengths and weaknesses.
EDI emerged decades ago as a way to streamline business processes, transferring data from system to system with the use of established messaging standards. EDI helps reduce manual processing of bulk data by allowing the transfer of business documents such as purchase orders, invoices, ASNs and more, between business partners. EDI data is stored then transmitted, and therefore has limited use for real-time access and responsiveness.
APIs were first developed in the early 2000’s and are often used in Cloud SaaS (Software as a Service) applications. Unlike EDI, APIs enable real time data exchange. Web service APIs provide easy integration to back-end business systems. Compliance and security are other aspects of APIs that differ from EDI. API integration may not be a suitable solution to adhere to compliance regulations, such as sensitive financial data.
|Call pattern||Asynchronous call for batch exchange||Synchronous call for real-time exchange|
|Data size||Capable of handling mass data||Not intended for mass data|
|Standards||Standards are set with industry and region-specific options||No widespread and established standards|
|Security||Trusted solution to fulfill compliance regulations||May not be suitable to adhere to compliance regulations|
|Ease of on-boarding||New partners, especially those who are pre-connected to provider’s network, can be on-boarded easily and quickly||The data layer for API implementation needs to be built|
|Cost||Usually charged by kilo-character (KC)||Usually charged by document|
|Common use cases||Batch data conversion of bundled information via system-to-system|
Connect to external trading partners via VAN
|Real-time single request for information|
Connect to API-enabled cloud applications
Choosing Between EDI and API
When discussing API vs EDI, advantages and disadvantages are unique to each system. For one, API implementation may be less costly than EDI by not requiring on-going maintenance or translation services. However, those benefits may be offset by the increased complexity of adding new trading partners and collaborating on communication standards.
When considering API vs EDI, the answer may not be an either/or situation. While EDI is likely to continue to handle the majority of B2B interactions, businesses are increasingly using a mix of API and EDI integrations.