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  • August 24, 2020

API vs EDI, Part 1: Brief Introductions

As business needs evolve, many companies wonder if API or EDI technology is right for them. The truth, actually, is that many end up needing both.

As business needs evolve, many companies are wondering if API or EDI technology is right for their business. The truth, actually, is that many end up needing both. Each option has its pros and cons, and situations where they are appropriate to use. We'll break these technologies down in this blog series, starting with a brief introduction to both technologies.

What is EDI?


EDI, or Electronic Data Interchange, is a computer-to-computer exchange of business documents in a standard electronic format. Standards, which vary by industry and geographic location, include:

  • cXML, the most common format for electronic invoices.
  • ANSI ASC X12, a standard originally created for North America, but which is now used globally across many industries.
  • TRADACOMS, used primarily for UK retail business.
  • UN/EDIFACT, developed by the United Nations for international exchanges.
  • ODETTE, used by the European automotive industry.

Information can be shared between employees, departments, or even businesses. The documents exchanged via EDI were traditionally delivered on paper, such as purchase orders and invoices. EDI is an older technology, but it is still used very heavily by many businesses and their trading partners. It's particularly valuable for supply-chain industries such as transportation, logistics and 3PL, and distribution.

 

What is API?


API (Application Programming Interface) encompasses procedures built to handle the specific tasks or functions that an API program performs. The API may expose the business logic of internal systems and has protocol features used to communicate data between applications. Its tools are sets of building blocks for the construction of new programs.

There are hundreds of APIs for social messaging, finance and payments, ecommerce, and categories enabling all the ways we use apps. APIs are critical to integrating data within a digital ecosystem. There are various types of API's, including:

  • Representational State Transfer (REST), an architectural style that makes use of existing and widely adapted technologies, specifically HTTP, and does not create any new standards. This is most commonly used by cloud applications.
  • Simple Object Access Protocol (SOAP), a strongly typed messaging framework that relies heavily on XML and schemas. This type is widely used but is becoming less popular.
  • JavaScript Object Notation (JSON), an open standard file format and data interchange format that uses human-readable text to store and transmit data objects consisting of attribute-value pairs and array data types.
  • Extensible Markup Language (XML), a markup language that defines a set of rules for encoding documents in a format that is both human-readable and machine-readable.

 

As you can see, there are some differences and similarities between EDI and API. Both enable companies to transmit data to their business partners, but they are not quite the same. In our next post, we'll dive deeper into the specific pros and cons of each technology, and in part 3, we'll discuss when it's best to use EDI, when to use API, and when you should consider both.

If you want this information all in one place, download our executive brief: API vs EDI.

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