EDI and API: Which Trends Are Transforming the Modern Supply Chain Management?

If you are someone who likes to stay updated with technology, there's a high probability you have come across these two terms- API and EDI. Honestly, these two terms have recently been doing rounds in the big data world. Over the years, EDI has become a standard document exchange system, whereas API is on its way to becoming a popular alternative to EDI.  

These technologies specialize in transmitting large amounts of data across different trading partners and companies. API and EDI essentially fulfill the same function: getting data to and from two or more partners or recipients. However, these two are not the same. Despite performing the same function, these two have different capabilities and methods of achieving the goal of transmitting data between the partners. 

As many businesses often fail to understand the difference between EDI vs API in supply chain management, in this blog, we aim to familiarize you with both technologies and explain the differences between the both. So, let us first take you through a brief introduction of both the technologies and proceed further with the comparison. Here we go! 

What Is API? How Does It Work?

API or application programming interface is a set of programming instructions for accessing web-based software applications. It allows software platforms to communicate with each other efficiently and helps them interact with each other securely.

Moreover, API enables data transfer in real-time in less than a second between two systems. This ensures that all the data has been updated instantly. This real-time transfer of data using API is used increasingly by industry giants. eCommerce giant Amazon has also incorporated API in its supply chain. 

What Is EDI? How Does It Work? 

EDI stands for Electronic Data Interchange, which emerged in the 1960s as a way to streamline business processes, and that's what it does till now. EDI takes care of ship notices, invoices, and orders. Due to its security and reliability, EDI has become a well-known industry-standard technology.

EDI allows exchanging business documents and other essential data in electric format. It first establishes a connection to a secure network and then enables exchanging data securely between the trading partners. Moreover, EDI can be processed without any need to process each data manually and thus makes the whole process quicker and more accurate. 

API vs EDI- Discussing the Pros and Cons

After going through the brief introduction of both API and EDI, we will have a glance over the pros and cons of both technologies to understand the differences between them better. So, let's head on to the pros and cons of both, one by one. 

Let's Begin With the Pros of API 

• Faster exchange of data 

API connects systems and updates information and data when it becomes available. API is instant and accurate in terms of the transmission of data. Moreover, it allows to pick up requests automatically and respond faster to the issues in real-time. 

• API is simple to use 

API streamlines data transmission like never before. It also allows the users to gather data without any need for customization. Furthermore, there's no need to match the versions of systems between the two parties with API. 

• Compatibility with future technology 

API is highly compatible with some of the top technologies such as IoT, Blockchain, and AI. Moreover, whenever a new technology launches, API adapts it well, supports and becomes compatible in no time. 

Here Are Some of the Cons of API 

• Less secure 

API is software dependent on the web, which makes it much more prone to hacking and data breaches. Since API connects multiple devices, a data breach could bring major losses if not taken sincerely.

• Strong internet connection 

API requires a strong internet connection to perform, and any interruptions in the connection can affect every system connected via API. 

Next, Let's Focus on the Pros of EDI 

• Data security

EDIs are highly favored for their data security. EDI maintains a highly secure connection between the trading partners of a business and enables sending and receiving of information seamlessly. 

• Easy to use 

EDI is a great alternative to traditional manual document processing. It easily streamlines data collection and transmission. The data transmission that used to take hours can be done within a few seconds with EDI, thanks to its ease of use and simple learning curve. 

• Great accessibility 

EDI has become a standard technology for many businesses because of its accessibility. For its accessibility, many supply chain companies are adopting this technology and running their business efficiently. 

Lastly, Here Are Some of the Cons of EDI

• Quick version updates 

EDI has three different versions, and the tricky part is these versions should match between the two partners or parties. This becomes chaotic when the outdated versions are not compatible with each other. 

• Cost factor 

EDI undoubtedly has become a renowned technology, but its cost is its downside. It is not cheap for starters, and further, it takes a lot of time to synchronize the systems and train the employees. EDI projects may take three to six months to complete before full capability can be realized, and this results in increased costs often. 

• Limited scope between the partners 

EDI maintains an open channel between any two parties. To include another partner, another EDI connection has to be started, and all the partners require to have the same versions. This results in limited scope between the partners involved and even arises confusion sometimes. 

API or EDI - Which One Should You Choose? 

After going through the introduction, and the pros and cons of both API and EDI, we understand that both of these technologies are fulfilling their purposes quite well, but there's always a BUT. API for sure has astonishing features and is becoming popular every day, but EDI still leads the race. Because of its popularity, robust features, and security, EDI has established itself as an industry standard for data exchange long back. 

On another note, EDI is an older technology as it has been around for decades. API, however, is newer and has earned recognition for synchronizing web applications to perfection. Moreover, API is easier to use because of its simple interface, and its development environments also allow the API to simplify challenging projects and save time and money. 

Final Words

This was all from our side about API vs. EDI. When it comes to choosing one among them, the final call is yours. Scroll up and go through the pros and cons once more and decide smartly. We don't have any personal favorite among these two because both of them are decently doing their job. We tried our best at bringing you insights about the API vs. EDI, and now it's your turn to put this battle to rest and choose one that suits you best. We can only wish you good luck with that.