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EDI versus API

Updated: Jan 21, 2022

The bigger your company becomes, the more you’ll need to be able to depend on the effectiveness of your supply chain management. If you’re stumbling through this process and looking for ways to better streamline it, EDI or API will be your best bet.

Although EDI may be the go-to one you hear most companies rave about, don’t be discouraged from looking at API! It’s only because of how long that EDI has been around that it has such notoriety. Some statistics anticipated 25% users to switch to API by 2021 because of the growing awareness.

While turning to these two solutions may have you confused on what may be best for the different complexities of your business especially seeing as both solutions come with their own pros and cons, in this blog, we’re breaking down all the highlights (and downfalls) of each so that you can make the best decision for your business!

What is EDI

Electronic Data Interchange (EDI) has become the seamless option in which companies are able to communicate/transfer data to other businesses/systems in an electronic format. With the old alternative being communicated via paper, this new-age upgrade has been a huge way of easing that load as well as securing the data needing to be sent. This comes in handy for things such as invoices, purchase orders and the like. By removing the need to have manual labor on call to do this, businesses have been able to drastically reduce human error by taking out the woes of misreadings/human handwriting illegibility.

Another reason EDI has become big with the business crowd is because of the ability to only provide accessible information to pre-authorized users. By doing this, EDI’s increase the accuracy of audit trails and documentation so that security of company business is only granted to those vetted and in actual need of the documentation, making it an even more secure way to send information.

If you’re worried about the amount of data you routinely need to send, EDI erases that concern as well! With the ability to send great amounts of information in just one transfer, EDI can speed up the efficiency of your supply chain by dwindling inaccurate information while increasing productivity.

In short, the main takeaway from EDI’s is the efficiency and accuracy it has the potential to bring to your business. You’ll be able to cut down on manual labor while still speeding up/increasing your productivity.

But I know you’re wondering...what’s the catch?

Answer is...not much.

While some businesses have complained of EDI’s lack of staying up with the times or being behind on technological advancements, updates are being made all the time.

EDI also used to receive hesitation for the upfront investment but because of the overwhelming increase of demand, they’ve also become much more affordable.

One main downfall, reported by small businesses, however, is the document standard required by EDI. Some of the standards include: UN/EDIFACT, ANSI ASC X12, GS1 EDI, TRADACOMS, and HL7.

Is this something that would hold you back from giving EDI a try?

What is API

So you’ve got the low down on EDI. Now what about API?

Application Programming Interface (also see: API), is a little different from EDI in that it’s essentially an application that allows two systems/softwares to interact with each other. The application is effectively created so that, without human involvement, both systems can essentially speak to each other to get what's needed.

To understand this better, consider your TV streaming services! When you login to watch Netflix, your TV uses an API to send that information to a remote application that will then confirm that you’ve entered in the correct information so that it can then send a signal back to your TV letting it know that you’ve received access to watch your shows!

It’s this in-the-moment efficiency that sets the API bar a little bit up from EDI. With businesses being able to transfer their information in seconds, and get the responses needed, you’re able to make decisions much more efficiently within your business and ultimately increase the productivity of your supply chain!

So...which one is for you?

Whichever your business calls for! As we mentioned, EDI has been around for a lot longer so you’ll often hear recommendations for it! But with the cutting edge technology of the API, it’s definitely not something to overlook.

We would suggest really taking a look at what your business needs and making the decision that feels most aligned!

Which one is speaking to you more?

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