Electronic data interchange and application programming interface technologies both offer avenues for communicating between business partners’ computer systems. EDI provides a platform for exchanging structured business data, while APIs are used to integrate and communicate between different software applications for real-time data exchange. For years, businesses have debated which is superior, but as companies evolve and require a more diverse set of tools, they realize that both play an important role in how enterprises participate in their business ecosystems.

As the need for data grows, methods of exchanging data must become more flexible and repeatable. APIs offer a solution for applications that “speak different dialects” of the same language (like EDI and JSON) to communicate and exchange information seamlessly. This capability is a significant advantage, as it allows applications to move away from batch processing, which can consume massive amounts of resources by processing hundreds of thousands of documents at once. APIs provide visibility to the various applications and lines of businesses that require data to make critical decisions.

The advantages of APIs extend to security and governance. Organizations can control the exposure of data to the outside world. Instead of granting access to the data directly, customers can expose an API to allow for requests to be made in a more controlled manner. Cloud-based APIs offer increased flexibility, allowing customers to scale their integration capabilities to meet fluctuating data volumes. APIs also provide improved inventory management; instead of sending a daily or weekly inventory report and a monthly reconciliation, external parties can craft a way to ingest current inventory levels, to ensure product availability. Additional benefits include data monetization, which through APIs, provides classes of services that can be charged back to customers, such as report creation or scorecards.

Many third-party EDI service providers offer a black box “simple” EDI translation service. This provides an output file which often needs additional processing before it can be entered into back-office systems. This also necessitates the added labor of utilizing developer resources to build and maintain custom programs and scripts, as well as relying on these roles for operation support and process management, which significantly increases the total ownership cost. Unfortunately, despite all the work involved, this approach results in a lack of end-to-end visibility and centralized exception management. It also lacks a governance process or orchestration to provide the entire enterprise ecosystem with the data required from the EDI transaction.

Though EDI may be more labor-intensive and lack the flexibility of API integration, it can offer a secure avenue for data transfer. EDI systems are built to allow access only to predefined authorized users, using audit trails and archives to ensure secure access. EDI also provides the ability to transfer large amounts of data or documents through a single transaction, which minimizes inaccuracies and increases efficiency. EDI offers an avenue to transfer high-volume, structured data between established trading partners.

Together, API and EDI can address a diverse range of business transaction needs. A synergistic approach between the two bridges the gap between batch-oriented EDI transactions and real-time data access afforded by APIs, receiving instant order confirmations, tracking shipment progress and streamlining logistics. Utilizing APIs allows EDI to enrich data documentation, to include product images, specifications and promotional offers alongside standard EDI data. With API-driven workflows, organizations can automate manual tasks involved in EDI translation.

As our digital landscape evolves, businesses are moving past siloed thinking, giving way to strategic integration. API integration alongside EDI provides a deeper context for B2B communications. While EDI may enable downstream business processes and data orchestration, APIs can look up catalog inventory or check pricing within an e-commerce platform. Then, if the customer confirms it wants the order, EDI would be utilized again to begin the ordering, shipping and fulfillment processes.  

The goal of these data-exchange methods is not for one to replace the other, but to utilize them together to eliminate manual intervention, and automate as much of your critical revenue-generating processes as possible. Deploying APIs alongside EDI can help provide a consistent pattern of data exchange both internally and with trading partners, facilitating business operations.

Bryan Cooper is director of industry solutions with Cleo.