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Business transformation: Can EDI co-exist with newer integration patterns?


By JB Bentz

Business technology and industry standards are forever adjusting and evolving according to market directions. We remember how this happened during the Internet 1.0 wave at the start of the millennium.

A similar evolution is taking place now for electronic data interchange technology (EDI). EDI has been in use for over 50 years, and it shows few signs of slowing down. In fact, demand is high, driven in part by small-to-medium enterprises (SME) turning to EDI to help provide operational advantages and financial costs-saving.

EDI technology maintains its purpose in business processes, despite some warning of its demise. Its usage persists because it gets the job done well, and because it has evolved with the demands of business. These digital transactions help businesses save money on paper and printing, shipping costs, and labor, and EDI remains at the heart of supply chain operations.

Many businesses still rely on EDI with business partners, either customers or suppliers. In healthcare, for instance, EDI is expected to play a significant role in the years ahead, with anticipated market growth rising by nearly 10% by 2030.

At the same time, enterprises see the advantages of synchronous real-time information exchange and interactive mobile apps as they look for ways to boost supply chain transparency and agility.

This is the moment, it seems, where newer technologies such as APIs (Application Programming Interfaces) can move ahead in markets to co-exist with legacy EDI software. The future of EDI is B2B integration platforms that support new patterns by combining APIs, cloud, and on-premises services.  

Data connections are leading business transformation

Companies today are increasingly connected through B2B ecosystems that offer more sophistication than aging EDI solutions alone can give. Data is the driver here, and businesses want to make important decisions with fast, secure delivery of real-time data.

Features like DevOps-friendly configuration, operational APIs, and low-code/no-code integrations are bringing real-time data to the forefront and leading the way for this next technology revolution. More businesses are rethinking their systems and operations, testing digital automation practices, and learning more about the possibilities of concepts like supply chain 4.0 and omnichannel 2.0.

Can EDI survive in this evolving environment? We think so. For example, the automotive industry is heavily reliant on EDI and won't be replacing it anytime soon. At the same time, businesses in this industry recognize the need to modernize systems and seek out new savings and efficiency in the years ahead.

EDI in the automotive sector

Today, the auto industry depends on EDI to deliver asynchronous file transfers of structured messages between car manufacturers (OEMs), suppliers, and logistics service providers throughout the supply chain. EDI processes also support interactive mobile apps, and RFID tracking devices in supply chain events.

Yet, as time marches on, today's automotive industry needs more than EDI alone can provide, and businesses are embracing digital innovation through API-driven business requirements.

Innovating with EDI and APIs together

As B2B ecosystems continue to evolve, companies seek a more sophisticated kind of connectivity. Gartner recommends that APIs complement, rather than replace, traditional B2B technologies such as EDI: "Application leaders should use API capabilities to add new channels, enable automation and optimize their business ecosystem for digital business."

This means that businesses looking to incorporate any future EDI/integration technology must be able to bridge between the classic EDI world and new API-driven processes.

We're seeing this scenario play out in the auto industry: the automotive standardization body ODETTE and its national associations last year began an initiative to develop standardized Open APIs for the inbound transport process. This involved a cadre of experts from API technology providers, OEMs, tier suppliers, and LSPs, among others.

This pilot recommendation is compatible with existing EDI-based communications. But it introduces the notion of new API-driven status messages to enhance existing supply chain processes. By layering APIs over existing EDI flows, for example, an automotive OEM could check the status of the upstream supply chain - giving the OEM better visibility over potential product delays or bottlenecks.  

Open Everything

This results in a new business vision, which we call "Open Everything." One manifestation of this is integrating EDIs as part of opening up data across separate applications in various business processes and organizations. Collectively, these layered technologies in a business integration platform can benefit the entire ecosystem.

We're likely to see more of this layered integration moving into large enterprises and SMEs. As part of the overall digital transformation, APIs will continue to be incorporated in business technology processes, and we believe the Open Everything vision will soon become a reality.  

The future of EDI, then? Still here, still working, still viable. But if your business is solely reliant on EDI without forward-compatibility, that might be a costly risk in the future. It's time to look ahead to new business integration opportunities.



JB Bentz, Vice President and General Manager, B2B Integration at Axway


Axway helps companies move forward faster and create brilliant digital experiences using our Amplify API Management Platform and proven MFT and B2B integration solutions. JB has worked in the EDI/B2B integration industry for 20+ years, with customers in nearly all verticals across the globe. So far in his career, it has been predicted that EDI would be made obsolete/replaced by no less than 4 technology alternatives, but EDI has proven extremely resilient and integral to the operation of the global supply chain. 

Published Wednesday, September 21, 2022 7:32 AM by David Marshall
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