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EDI vs API: Achieving Data Exchange Excellence through a Unified Approach

Abeeha Jaffery

Lead - Campaign Marketing

May 23rd, 2024

Data exchange is essential to modern business operations. Whether it’s fostering collaboration across departments, exchanging data with customers, suppliers, and partners, or seamlessly integrating diverse systems, selecting the optimal data exchange strategy is a make-or-break decision.

Currently, the “EDI vs API” debate is at its peak, as the two technologies have emerged as prominent methods for facilitating data exchange. While both approaches have unique strengths, a unified approach—harnessing the power of both EDI and APIs— can unlock a new level of data exchange excellence.

Understanding EDI

EDI is a computer-to-computer exchange of business documents in a standard electronic format. This technology has been around since the 1970s and is commonly used for exchanging purchase orders, invoices, and other business documents in various industries, including supply chain, healthcare, and more. With EDI, documents are sent in a structured format that computers can read more efficiently, which also reduces the risk of errors.

Exploring APIs

APIs revolutionized software integration and data exchange when they emerged in the 2000s. They allow software systems to interact with each other, enabling real-time data exchange and integration. APIs use REST, SOAP, or GraphQL protocols to facilitate communication, providing flexibility, scalability, and customization options. APIs are well-suited for dynamic data exchange and enable organizations to leverage real-time data for quicker and more informed decision-making.

The EDI vs API Debate

EDI has a deep and established history, and it is widely used in traditional industries, whereas APIs have gained traction recently with the rise of web-based applications and cloud computing. While both EDI and API have a similar end goal, their approaches and features differ significantly. The EDI vs API debate boils down to features like scalability, ease of implementation, and compatibility with modern technologies.

EDI vs API: Primary Differences

  • EDI is a technology used to standardize the electronic transfer of business documents, while API is a technology used to integrate different types of software applications.
  • EDI systems use messaging formats like EDIFACT or ANSI X.12, while APIs use specific programming protocols and standards like HTTP/HTTPS, REST, or SOAP architectures.
  • EDI is ideal for transmitting large batches of data in a batch-processing environment, whereas APIs are useful for real-time access and interactive communication between software applications.
  • EDI implementation requires specialized expertise, data mapping, and compliance with industry standards, while APIs are easier to adopt—especially for web-savvy developers—with extensive documentation and resources available.

EDI

API

Definition

Computer-to-computer exchange of business documents in a standard electronic format.

Enable software systems to interact with each other, facilitating real-time data exchange and integration.

Usage

Commonly used for exchanging purchase orders, invoices, and other business documents in various industries.

Used for dynamic data exchange and integration across industries.

Technology

Established since the 1970s.

Emerged in the 2000s.

Format

Documents sent in a structured format that computers can read, reducing the risk of errors.

Facilitate data exchange and integration in a flexible and customizable manner.

Protocols

Typically uses proprietary formats or standards like ANSI X12 or EDIFACT.

Can utilize REST, SOAP, or GraphQL protocols for communication.

Real-time Data Exchange

Limited real-time capabilities due to batch processing environment.

Enable real-time data retrieval and updates.

Scalability

Requires additional setup and configuration for scaling.

Support scalability and handle increasing data volumes and user demands.

Efficiency

Highly efficient in document-based exchanges.

Enable real-time data exchange and automation, improving efficiency.

Security EDI transactions often use secure protocols and encryption methods to protect data during transmission.

APIs can incorporate authentication mechanisms, access control, and encryption techniques. They can also leverage token-based authentication or API keys for secure access.

The Power of a Unified Data Exchange Approach

Both the API and EDI markets are projected to witness significant growth in the coming years. The global API market is estimated to reach USD 6263.00 million by 2028, driven by the increasing adoption of cloud-based applications, digital transformation initiatives, and the demand for seamless integration among diverse systems.

Similarly, the global EDI market size is projected to reach around USD 4.52 billion by 2030, with an impressive compound annual growth rate (CAGR) of 12.5%. These projections are reflective of API and EDI technologies’ growing importance and relevance in the data exchange landscape.

Businesses are becoming increasingly aware of the benefits of combining the two approaches to achieve a unified data exchange experience. This unified approach can enable businesses to benefit from the scalability and flexibility of APIs while also taking advantage of the security and reliability of EDI. By combining the strengths of EDI and APIs, organizations can achieve real-time visibility, operational agility, and improved customer experiences.

For example, EDI-to-API and API-to-EDI connections enable organizations to bridge the gap between legacy systems and modern applications, ensuring smooth data exchange across different platforms and business partners.

Here are some more advantages of adopting a hybrid data exchange strategy:

Improved Data Accuracy and Consistency

One of the most significant benefits of a unified data exchange strategy is more accurate and consistent data. Businesses can ensure that all data transactions, whether they be real-time or batch, are subject to the same validations and checks. This helps to reduce data entry errors and ensures that the data is accurate and consistent across all systems.

For example, in the case of a retail business that operates both online and in-store, a unified data exchange approach can ensure that customer data, such as contact information and purchase history, remains consistent and accurate across their CRM system and e-commerce platform. This consistency improves customer service and reduces the likelihood of errors.

Enhanced Integration and Automation

Another benefit of a unified data exchange approach is enhanced integration and automation. By adopting a standardized approach to data exchange, businesses can facilitate seamless integration between different software applications. This provides opportunities for automatic data entry and improved workflows, saving valuable time and resources while reducing the likelihood of data entry errors.

For example, in a manufacturing business that utilizes separate systems for inventory management and order fulfillment, a unified data exchange approach can automate the process of transferring inventory levels and order information between the systems. This automation improves efficiency, reduces manual effort, and minimizes errors.

Scalability and Flexibility

A unified data exchange environment promotes scalability and flexibility. Businesses can quickly respond to changes in their operational needs, rapidly switch between various communication modes, and seamlessly integrate new systems without major interruptions.

For example, in the case of a growing e-commerce business, a unified data exchange approach allows for seamless integration of new sales channels (such as marketplaces or social media platforms) with existing systems. This scalability and flexibility support the business’s expansion efforts and ensure smooth operations.

Cost Savings and Efficiency

Unifying data exchange technologies can help businesses reduce costs and improve efficiency. By streamlining data exchange processes, businesses can save valuable time and resources.

For instance, a unified data exchange approach can reduce the time and resources required to manage patient data in a healthcare organization that relies on multiple systems for patient management and billing. This streamlining improves efficiency, reduces administrative costs, and minimizes the risk of errors.

Implementing a Unified Data Exchange Strategy

In the EDI vs. API debate, why not choose both?

Embracing a unified data exchange strategy is not only a technological choice but also a strategic move toward achieving data excellence. Adopting a unified data management solution is the key to achieving seamless data exchange. By implementing a unified end-to-end data management solution, businesses can break down data silos, streamline processes, and enable the smooth flow of information throughout the organization.

With Astera’s Data Stack, organizations can seamlessly manage their end-to-end API lifecycle, simplifying data access and ensuring smooth integration. Investing in a separate solution to support API-based transactions is unnecessary. Astera’s high-performance EDI engine automates B2B exchange, simplifying electronic data interchange and enabling easy electronic data exchange.

Moreover, Astera’s powerful ETL/ELT engine and automation capabilities allow organizations to integrate, transform, and migrate data from a wide range of sources, unifying enterprise data and ensuring it’s accessible and reliable.

Whether it’s data trapped in unstructured sources, legacy systems, disparate databases, or cloud sources, Astera’s solution empowers businesses to connect and harness the full potential of their data. Organizations can achieve data exchange excellence by choosing Astera for today’s EDI needs and confidently driving their business forward.

Learn more here or get in touch to see how Astera can help.

Authors:

  • Abeeha Jaffery
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