EDI vs. API: Bridging the B2B connectivity Gap
- September 01, 2021 / by Infocon Systems
For a long time, EDI (Electronic Data Interchange) has played an important role in the supply chain management solution and Trading Partners. APIs (Application Programming Interfaces) have been growing in popularity within trading partner communities in the B2B systems. APIs also can be used for supply chain management solutions. It is worth understanding the differences between API and EDI so that business executives can choose the right technology for the next B2B Integration project!
What is EDI
EDI emerged in the early 1980s as a way to securely exchange the information between suppliers and trading partners with the use of established EDI standards. These standards include EDIFACT, ANSI ASC X12, and ODETTE for data exchange in various industries. EDI standards define the location and order of information in a document format. Trading partner companies use EDI integration to share various document types from purchase orders to invoices to requests for quotations to loan applications and more. In most instances, these trading partner companies exchange goods and services frequently as part of their supply chains and business-to-business (B2B) networks.
As has already been explained, EDI uses a defined set of standards for transmitting business messages that allows data to be interpreted correctly and instantly, regardless of the platforms being used on the different computers that transmit and receive the data.
EDI messages involve actual transactions, not simple exchanges of text like an email. "Transaction sets" are what we in the business refer to as EDI messages. Each "set" consists of a string of data elements that each represents one fact (for example: price, quantity, product number, etc.).
What is API
An API (Application Programming Interface) is a set of programming code that enables data transmission between one software product and another. API is a web-based protocol and is often used in Cloud SaaS applications. APIs quickly exchange data between one system and another. They enable devices to flow in less than a second between systems. Web service APIs provide easy integration to back end business systems.
APIs allow companies to leave parts of their software available or “open” so other software can easily integrate to them. An API serves as an interface between two endpoints and more suitable for real-time business processes.
The Differences between EDI and API
API EDI and API both are integration technologies and can be used to exchange data between business partners. But each has its strengths and weaknesses.
| EDI | API | |
|---|---|---|
| Call Pattern | Batch communication style with asynchronous calls | Synchronous communication style for real-time exchange |
| Data size | Able to send large amounts of data at the same time | Not intended for large data |
| Available Formats for Directory | Relevant EDI Guideline | API Catalog of API Provider |
| Cost | Charged by kilo-character (KC) | Charged by document |
| Security | Safest ways to transfer data , fulfil compliance regulations | May not be the best solution to adhere to compliance regulations |
| On-boarding Process | New and pre-connected partners can be on-boarded easily and quickly | The data layer for API implementation needs to be built |
| Standards | Standardized with industry and region-specific options | No specific and established standards |
| Transport Protocol | AS2, AS3, OFTP2, SFTP and many more | HTTP/S as underlying transport protocol for API calls |
| Message Format | EDIFACT, ANSI X12 and more based on standardized formats | XML for AS4 and JSON for REST |
Why We Need EDI and APIs Both EDI and web services APIs are excellent tools for transmitting data between business partners. The selection on EDI or API depends on trading partner requirements and applications. Also, both EDI and API can together complement each other. API is a relatively new player and has some innovative features that make it a growingly popular option. Due to security and reliability, EDI has remained a popular choice between businesses since decades. APIs are part of a reasonable in modern B2B data and systems integration and enable devices to real-time access. EDI and API need to be able to work together seamlessly and complement each other. But, you need to find the right option to connect them on the same platform.
To learn more about how Infocon Systems can help with your EDI and API needs, please don’t hesitate to give us a call at 1-888-339-0722 or email us at sales@infoconn.com. We’d love to hear from you.