In the technology world, the rule has generally been that newer technology improves upon previous generations and replaces older technology. However, when it comes to technologies that share data between partners in the supply chain, both electronic data interchange (EDI) and application programming interfaces (APIs) have their place—and will continue to co-exist for the foreseeable future. Smart organizations and procurement professionals should figure out how to leverage the benefits of each.
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EDI is an easy and efficient way to pass large amounts of data between two similar systems, while cloud-based APIs take small amounts of data and exchange them in real-time between different systems. EDI standardizes data to allow for the translation of large numbers of physical documents (purchase orders, shipment orders, status reports, invoices, etc.) into an electronic format. When real-time access to big data is the goal, APIs show a clear advantage. Further, APIs often remove the need for human intervention.
Weighing the Benefits
Of course, how well a technology might deliver on business needs depends largely on how those needs are being defined. That means that some activities will be best supported by either EDI or APIs.
EDI offers several clear benefits:
- Excellent security and privacy. By transmitting over a secure connection, EDI ensures that trade secrets and confidential data are safeguarded. It is clear who has access to the data.
- Streamlining manual processing. EDI technology allows data to be collected and transmitted in a fraction of the time needed for older manual processes.
- Global reach. EDI is an industry standard. Organizations will find that many others they wish to partner with already know and use the system.
Meanwhile, APIs also bring something to the party:
- Lightning speed. APIs don’t depend on physical documents being uploaded into a system. An API connects to systems and gathers and updates data as it becomes available. What takes hours with an EDI system might take only minutes using an API. Pickup requests can be automated, which puts accurate information in the hands of people making projections.
- Easy. There is no need to customize the system to gather data—and partners don’t need to have matching versions to communicate since an API connects a variety of systems that are already in place.
- Future-proof technology. API technology can support new types of technologies as they emerge to further extend visibility along the supply chain.
The Best Results
For now, EDI and APIs work best as two halves of an approach to supply chain communication. By using both, organizations and procurement professionals can capture the benefits of file-based batch processes and real-time data sharing. Organizations may choose to use a different technology depending on what data is being transferred. Invoices, for example, can be secured and sent using EDI, while time-sensitive data like shipment status might be sent using an API. In the end, the best results may be realized by using both.
For more information on DigiKey’s Digital Solutions, visit www.digikey.com.
