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Which Is Better for Your Business, an API or EDI Interchange?

Published on: January 19, 2021

in: Company News

EDI interchange or API; which should your company use? If both terms are nothing more than a group of letters, you’re not alone. Most business owners remain unaware of how systems communicate with one another. Both API and EDI interchange refer to methods by which systems increase the speed and efficiency of communications. Each may be used in supply chain management.

Definitions of EDI Interchange and API

EDI stands for “electronic data interchange.” It’s a technology that’s been in use in many industries since the 1970s, making it well-known and tested. EDI offers excellent security and reliability, and many older systems are built with EDI interfaces to enable rapid data exchange among supply chain partners.

API was developed around the year 2000. It is known as the programming interface between payment processors and ecommerce stores and myriad other applications. API stands for “application programming interface.” It is less secure than EDI because API leaves some of its programming open, which allows for the integration between systems.

Choosing an EDI or API Depends on Business Need

Your business’ needs dictate whether utilizing an API or EDI is better. Many suppliers rely upon EDI for information exchanges among systems, but that’s not to say that it’s the only method that works.

Both systems enable data sharing. Each has its own unique features. When analyzing both, ask yourself, “Which one will give my business a stronger competitive advantage?”

The points to evaluate include:

  • Security: EDI provides access to only authorized users, making it highly secure. APIs are open and may offer less secure connections.
  • Data Transfer: EDI enables vast amounts of data to be transferred in one upload while APIs may struggle. Conversely, APIs can interface with a wide range of software, allowing it to make many transfers. EDIs can handle larger data files than traditional APIs.
  • Speed: EDIs tends to be speedier when handling large amounts of data. An API offers sufficient speed for average amounts of data. If you just need to check your supply chain, for example, an API is likely to be just fine.
  • Human Interaction: EDI minimizes the need for people to touch the systems by using a shared and exact lexicon to minimize human intervention. API may require some direct hands-on tinkering to set it up, but it’s also a lot more flexible and adaptable to various system interfaces. EDI also reduces the need to process data manually, as many processes can be automated.

The system you are using may dictate which is better, EDI interface or API. Some systems must use one or the other. And, of course, the products you are moving along the supply chain may require something like tighter security or the ability to handle larger amounts of data.

Need Help Choosing Your System?

Choosing between an API and EDI can be confusing if computer software isn’t your field. The experts at Mindover Software can help you sort among the variables and find the best solution for your needs.

For more information, contact us or call 512-330-3994.