What EDI and API can do for your business

When browsing the market for software providers, you’ll find that there a lot of acronyms for different technologies and they can be confusing, more often than not. Take EDI and API, for example – they are both three-letter acronyms created to describe important data transfer technologies, but do you know what the differences between them are?

EDI has been around for more than 30 years, but API is catching up with it in terms of popularity.

Source: https://www.linkedin.com/pulse/edi-vs-api-complementary-competitive-john-hawkins
What Is EDI?

EDI is basically the electronic information exchange between two business partners. There are various documents they can exchange, ranging from  purchase orders to receiving advices. This technology basically eliminates the need to deal with paper-based documents, automating business processes. Without paper, the percentage of error drops, seeing as there is no longer a need for people to re-key information – instead this information is centralized in a safe program, from where it can be accessed at any time and sent to business partners from all across the globe.

EDI has been the norm in this respect for over three decades, being used by the world’s greatest retailers. They, in turn, require their business partners to use the same technology in order for their collaboration to continue – this way the EDI network expands to encompass more and more of the world’s companies.

EDI brings considerable time and cost savings, making it immensely popular around the world. However, API is also gaining ground on the market.

What Is API?

You may have heard about Application Programming Interface (API), but you should know it is a standard technology we are using every single day of our lives whenever we connect to mobile applications. API basically helps sync applications in real-time. Let us take an example. It has probably already happened to you several times to login on a website using one of your already existing accounts with Gmail or Facebook – this is possible thanks to API technology which pulls your information from those accounts and uses it to log you in on the website you’re on. API is the mediator that allows the changes made at point A to be echoed at point B. Needless to say, the way that APIs impact today’s world is a positive one, propelling it to further technological heights.

A noticeable trend is that many companies out there develop their software around their open APIs. To support this, there are entire economies that fuel software and businesses built around the API of every major B2B software platform.

EDI Is Not Going Anywhere

There are lots of people supporting the new kid on the block, API, while others prefer the experience that EDI has gathered for decades. The latter are on to something there.

API is indeed a powerful tool that is currently indispensable when it comes to synchronizing web applications, but it can’t do one thing EDI can: it does not cover all information transactions in business. A common reason for this is geographical ubiquity – modern companies tend to have business partners throughout the world. Why is this important? This is because in international trade fax machines are still a popular means of sending information, while in America nobody uses them anymore.

If you think about the email, you will see that the similarities are there: both the email and EDI are simple and effective, having all the necessary infrastructure to spread its use.

APIs require reliable Internet access in order to function how they were meant to. Older applications, however, help EDI become reality even solely by phone. Of course, there are business operations that will remain unaffected by a poor internet connection, but your supply chain will most definitely feel this lack.

It is important to remember that even though EDI has been around for some time, it is by no means a ’fosilized’ technology – on the contrary, it has evolved a lot throughout the years and has incorporated new technologies as it went along, like the ever-present cloud.

If you would like to find out more about how your business can develop with the help of EDI, we are delighted to hear from you!

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