Exploring the market to find the right software provider, you’ll notice that there are many acronyms for various technologies, and this can be quite confusing. Take EDI and API, for example – both are three-letter acronyms created to refer to very important data transfer technologies. But do you know what the difference is between them?
EDI has been in the market for over 30 years, while API is more recent but is beginning to gain equally significant popularity.
Source: https://www.linkedin.com/pulse/edi-vs-api-complementary-competitive-john-hawkins
What is EDI?
EDI practically refers to the electronic exchange of information between two business partners. Many types of documents can be exchanged in this way, from purchase orders to goods receipts. This technology essentially eliminates the need for dealing with paper documents by automating business processes. Without paper, the error rate decreases, especially as there’s no longer a need to re-enter information into the system. Instead, this information is securely centralized in a program, from where it can be accessed anytime and sent anywhere in the world.
EDI has been the standard in this regard for over thirty years, used by the world’s largest retailers. They, in turn, require their business partners to use the same technology to continue their collaboration. As a result, the EDI network continues to expand, encompassing an increasing number of companies worldwide.
EDI helps you achieve substantial cost and time savings, making this technology very popular globally. However, API technology has also started to gain significant ground.
What is API?
You might have heard of API (Application Programming Interface) before, but you should know that it’s a standard technology we use every day in our lives whenever we connect to mobile applications. Essentially, API facilitates real-time synchronization of applications. Let’s take an example. A very common scenario is when you try to log in to a website using your existing Gmail or Facebook accounts – this is possible because of the API technology that extracts information from those accounts and uses it to log you into the website you’re on. API is the mediator that allows changes made at point A to be reflected at point B. Clearly, the impact that API has on the world is a positive one, paving the way for new technological heights.
A noticeable trend is that many companies are now developing their software around their own API technology. In support of this hypothesis, we see entire economies fueling businesses and software built around the API of every major B2B platform in the world.
EDI – a technology that will stand the test of time
There are many people who support the new entrant to the market, API, while others prefer the experience that EDI has gathered for decades. The latter group may have discovered an important premise.
API is indeed a powerful tool that is currently indispensable when it comes to synchronizing web applications, but there is one thing that EDI certainly cannot do: it cannot cover all types of business transactions. A very common reason for this is globalization – modern companies tend to have business partners all over the world. Why is this important? Because in international trade, fax is still a popular method for sending information, while in America, almost no one uses fax anymore.
If you think about email, you’ll notice strong similarities: both email and EDI are simple and efficient, benefiting from the necessary infrastructure to expand their scope of use.
APIs require a stable internet connection to function as intended. However, older applications can make EDI a reality even with just a phone line. Of course, there are business operations that will remain unaffected by weak internet connections, but the supply chain will certainly suffer from these shortcomings.
It’s important to remember that while EDI has been in the market for some time, it is by no means outdated technology. On the contrary, it has evolved significantly over time and incorporated new technologies as everything has developed – a well-known example is cloud technology.
If you want to learn more about how EDI can contribute to the growth of your business, we’re here to help – feel free to contact us!
