API Integration vs. EDI Integration
Application Programming Interface (API) and Electronic Data Interchange (EDI) sound completely unrelated. But are they?
Let’s explore API vs EDI: are they partners? Or competitors?
And which one does your company need?
An Application Programming Interface (API) is code that facilitates communication between applications or systems.
Rather than writing all new code from beginning to end, developers create APIs to function within an existing framework of applications. In this way, APIs make it possible to set up tasks and commands- like a bridge- between systems.
API Integration refers to the connection (integration) of at least two systems, or the actual process of connecting these systems with APIs.
The basic flow of an API looks like this: 1) A client sends a request for information from a server, 2) the API runs its set protocols for a data request, 3) the server sends a response with information to the client, and finally 4) the EPI runs its set protocols for a data response.
For example, a customer is placing an online order. APIs connecting the site and a warehouse show the customer the inventory still in stock. Then APIs connecting the site, the warehouse, and the transportation company, give the customer real-time updates on the status of their order; right up to delivery!
Electronic Data Interchange (EDI) is a series of standardized transactions between trade partners.
EDI is a popular form of B2B transactions, because of its standardized data requirements and digital security. Some common examples of EDI documents would be invoices, purchase orders, shipping confirmations, and similar documents.
EDI integration is the processes of streamlining and automating (integrating) EDI transactions between trade partners.
A typical integrated EDI transaction would look something like this: Company A might send an EDI document to Company B, outlining their offer for goods manufactured by Company B. Company B replies with another EDI document accepting the offer, and another EDI document with a purchase order…and so on! EDI integration builds automated processes for the back-and-forth exchange of these documents: a certain EDI document received triggers the creation of another specific EDI document.
(You can read more about EDI codes by industry in CINTAP’s EDI Essentials Series!)
When do you need…
Your company, especially if deals in the online marketplace, likely needs APIs to create a smooth customer experience. API integration makes it possible to integrate all of those connections, monitor them, and maintain them.
By using API integration, you’ll be able to connect to your trade partner’s systems: you could track inventory and shipments, manage orders and payments more efficiently, and provide helpful features to your customers (such as a map on your website to track their orders). This type of integration also makes it possible to automate several business processes and workflows. If you are connected to your 3PLs with API integration, you can automate payment processing, logistics services, and even marketing efforts!
Your company needs EDI to exchange standardized sets of data between your trading partners. Whether you have a mid-size business or a large enterprise, EDI integration simplifies your business transactions securely, accurately, quickly, and inexpensively.
EDI transactions have rigid data requirements, but the formats of these documents from business to business are not standardized. Another reason your company needs EDI integration is because you may have hundreds of transactions (or more!) a day, all using completely different formats. EDI integration automates these transactions by reading through the documents and parsing out the necessary information quickly; and then sending back the appropriate response out in a format your partner can recognize!
What are specific benefits of…
The top benefit of using APIs is a better customer experience. Fewer clicks mean a smoother customer experience! Additionally, API integration can improve customer service by providing customers with real-time updates on their orders and shipments. API integration is a plus for your business operations as well: API integration also makes it much easier for your company to track and manage inventory, orders, and shipments; which saves you time and money, while also removing human error.
For B2B logistical data exchange, EDI is your best bet. EDI reduces the time spent manually exchanging specific data sets very quickly and accurately. Accuracy is a benefit of EDI compared to other methods of logistical transactions because there isn’t room for human error. EDI also creates a secure method for exchanging sensitive business data electronically. With lower costs and increased visibility to all trading partners, EDI has several benefits specific to industries in the supply chain.
API Integration vs. EDI Integration Revisited
Are API and EDI partners or competitors?
They are definitely more partners- with so much overlap in capabilities, it may seem like they’re competing, but since they have different functions…it’s essentially apples and oranges!
Both API integration and EDI integration can provide your company with convenience, automation, cost savings, and security. And both connect you easily to trading partners and customers, helping you scale your business efficiently.
However, API and EDI integration have completely different functions. If you need to share or exchange data transactionally, EDI integration is what you’re looking for. If you’re needing to build connections between apps (especially on your website to simplify your customer’s experience), you should invest in API integration.
For a more detailed breakdown, here is a handy chart to bookmark:
So, which does your company need- API integration or EDI integration?
The answer is: both! One can’t replace the other!
If it sounds overwhelming to have to invest in, manage, and maintain API and EDI integrations, take a deep breath and keep reading:
Integration Platform as a Service (iPaaS), APIs, and EDI
Integration platform as a service (iPaaS) is defined as a cloud-based software that can assimilate data from different sources onto a single platform.
In other words, iPaaS is a tool that makes it possible to assimilate, standardize, and automate data exchange within an enterprise or with other applications/partners.
When you use an integration platform, you are setting your company up for greater efficiency and transparency.
CINTAP Cloud is the iPaaS solution you need to manage your API and EDI integrations!
By consolidating data onto a single platform, your team can view trends, inefficiencies, and partnerships without having to navigate between sites. Using iPaaS means eliminating redundancies, correcting errors or failed transactions sooner, and ultimately saving time and money.
CINTAP Cloud is your one-stop-shop for API and EDI! With our customized approach to iPaaS, we can build your functionality, integration, and automation needs from the ground up. Reach out to us today to start simplifying your solution!
Author – Carissa Getscher