EDI with APIs makes supply chain sense

By | 4 minute read | April 20, 2021

“Pivot” has been the watchword for 2020. With it comes implications of a 180-degree shift – moving in a completely different direction and leaving the familiar, which has served us well, behind. Seemingly overnight:

  • Stores morphed into fulfillment centers and customers picked up curbside or opted for delivery.
  • The classroom experience was replaced with online learning.
  • Office jobs turned into hours of online meetings and chat check-ins.
  • Virtual wine tastings, concerts and dinners were among our new forms of entertainment.

Supply chains were also affected. Some companies experienced a massive surge in demand, while others experienced severe downturns. B2B infrastructure operating behind the scenes had to adapt to quickly changing workloads, and agility became key to resilience. While 85% of supply chain transactions are still managed through EDI, and it’s a crucial technology, companies need more flexible trading approaches with partners to help with supply chain resiliency.

To continue to enable seamless B2B transactions and integration with partners and customers to keep supply chains moving forward, it’s clear that pivoting isn’t the answer, augmenting is. I’m referring to augmenting the power of EDI integration with application programming interface (API) capabilities to mitigate risk and capture new opportunities. Over a period of decades, EDI has facilitated frictionless commerce, helped eliminate manual paper processes, and delivered significant and persistent, broad supply chain efficiencies through automation. APIs have emerged as another way to enable B2B transactions and the approach is ideally suited for certain situations.

APIs facilitate connecting directly to applications instead of a file transfer server. Using APIs to connect directly to a transactional system, like an ERP, makes the data transfer path simpler since the intermediary file transfer server and associated processes are eliminated. API-driven transactions also require fewer resources (storage, memory, compute) to manage the exchange of data, can be secured using a variety of encryption and authentication mechanisms, and are faster to execute and more real time. Lastly, APIs figure prominently in almost every IT modernization project, a perpetual journey for every enterprise.

Here are three things to know as you review your B2B integration strategy for supply chain resiliency with APIs:

1. Adopt a unified platform for API and EDI transactions

Gartner estimates that by 2023, 50% of transactions will be through APIs. That means 50% of all transactions will still be supported by EDI. Across many industries and supply chain networks, a core set of EDI transaction types has been widely adopted to support mission-critical business processes. Companies need to support both or risk missing out on important opportunities to drive revenue, growth and competitive differentiation.

Fortunately, it is possible to evolve your B2B integration strategy by adding API capabilities to your existing EDI integration, so you don’t need to choose or invest in a separate infrastructure to use APIs. A blended solution allows you to leverage resources that are already in place and performing well and build on what you have to meet all your business requirements and capitalize on the availability of emerging data sources. A B2B integration backbone that handles EDI natively and can extend to include API connectivity provides an all-in-one approach that is efficient, effective and optimizes collaboration with all your trading partners.

2. Identify opportunities for API modernization

A hybrid approach provides the benefit of using the best B2B technology for the circumstance. For partners that have not signed up for EDI due to costs or complexity, APIs provide an alternative way to transact. And whereas EDI is ideally suited for batch processing of mission-critical transactions like financial documents, APIs work well when you need to connect directly to transactional systems or enable real-time data exchange. For example, freight carriers require real-time shipment status and load-tender responses to be competitive. Seconds can make a difference, particularly in shipping marketplaces where the fastest click wins the business.

At the same time, as new government mandates and industry initiatives emerge, EDI formats have evolved in concert to support new standards for mission-critical transactions. In these instances, secure, reliable B2B data exchange can only be addressed with EDI transaction types and other B2B protocols and formats. Integration into backend systems is an example of a mix and match scenario. Different backend systems have different integration requirements, so companies need options for both EDI and API integration.

3. Prioritize agility when choosing a B2B integration platform

In the last year, we’ve seen more businesses than ever win and lose based on their ability to respond to changing business, market and partner requirements immediately. A unified platform for API and EDI transactions unlocks the agility you need.

Gain the flexibility to onboard new partners or quickly respond to a new requirement from an existing trading partner. Depending on your partner’s resources and needs, APIs provide a simpler, faster way for new partners to connect. However, self-service onboarding processes also make EDI data exchanges easier and faster to setup. To further reduce the complexity of EDI that requires scarce specialty skills to master, a managed-service offering backed by decades of EDI expertise can get data into the proper format for you, along with meeting all your API needs.

With API and EDI unified in one platform, you can view all your customer, partner or supplier transactions through a single dashboard. You can filter out categories like failed documents and drill down for technical details. The addition of natural language search and conversation capabilities allow users to ask questions, like show me the status of a P.O. number, and get all related documents. Any user can find the status of a transaction and respond to customer inquiries fast – without involving IT.

B2B integration strategies can be complex and doubling-up investments or compromising performance can introduce unnecessary risk. A unified platform that combines the power of EDI and API eliminates complexity and makes supply chain sense – for you and your trading partners.