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.
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ABOUT THE AUTHOR
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.