EDI is Anything But Dead
The world as we know it runs on and depends on EDI. Over a period of decades EDI has steadily gained mainstream
adoption throughout businesses worldwide as the preferred means to exchange documents in the B2B transaction process.
This growth in part, due to the emergence of Internet B2B, including new transport protocols like AS2 and numerous
flavors of XML-based B2B document standards. EDI programs deployed via B2B Managed Services and iPaaS platforms has also helped facilitate EDI growth as the complexity of managing the integration has moved to the platforms that increase the speed, agility, and barriers of implementing EDI.
The API Economy – API vs. EDI
API-based B2B integration, have mostly complemented EDI rather than replaced it. EDI has grown and matured and today, like ERP systems, remains a backbone for global business. While APIs unquestionably have a role in how data can be exchanged, it’s our belief that the demise of EDI has been greatly exaggerated. This fact means that EDI is still the most broadly accepted communication tool, and will not be completely replaced by API any time soon.
It is our view that we will see continue to see process based use cases where API’s are optimal and those where EDI is optimal. Once examples is in the logistics industry. Enterprises that use Transportation Planning Systems may want to get real time rating from Parcel or LTL carriers. With API integration via synchronous communications, as a shipment is being planned, a rating request can be sent to the carriers API’s and then return the rates in a response. This all happens within seconds while the user is in the system. A shipment tender/booking can then be made to the carrier via EDI or API, dependent on the carrier capability. Many carriers still have significant EDI systems and many have not developed APIs for booking. Shipment visibility can be implemented via Telematics/ELD integration via API, or via EDI, and from a Freight Settlement perspective EDI Invoicing is still the preferred adopted solution.
The key enabler for this use case is a technology platform that can support all of these patterns of integration for this vertical use case.
EDI is Evolving
Existing and merging EDI standards will continue to have a place in the digital ecosystem. EDI and Data Integration Providers like Justransform, make it very simple for businesses of all sizes to deploy EDI solutions and get the value of automated integration across business processes.
Additionally new government mandates and industry initiatives emerge, EDI formats are evolving in parallel. XML based formats are the focus of many of these projects. One example, to enable cross-border Business-to-Government eProcurement, the European Union (EU) has mandated the Pan European Public Procurement OnLine (PEPPOL) standard. PEPPOL is seeing adoption in B2B usage as businesses realize they can re-use the PEPPOL connection established for Business-to-Government and increase their ROI from that synergy.
Countries outside of the EU are also adopting or considering how to apply PEPPOL standards to their local and international requirements. Similarly, requirements for e-invoicing continue to evolve with more tax administrations demanding real-time access and approval of invoices, and new laws on invoice data retention, integrity and authenticity becoming
more prevalent in various geographic regions.
Other XML B2B standards bodies continue to evolve their specifications too. Examples include the GS1 XML 3.3. specification,
introduced in 2017 with a planned update targeted for 2019, and the Open Application Group’s OAGIS 10.4 release, introduced in
early 2018. OpenPEPPOL and the OASIS UBL standards body are working concurrently on plans for migrating from AS2 to AS4-based UBL to facilitate even wider PEPPOL usage.
Although newer XML B2B standards and government mandates can offer improvements, the information shared between two parties is still focused on supply chain “milestones” for core business processes, such as notifying that a PO was just sent, a Shipment was just started, or an Invoice was just sent.
EDI is not designed to handle more sophisticated events from new kinds of “users” like IoT sensors or a digital camera noticing a damaged part received on the factory floor and triggering a notification. As an asynchronous, point-to-point, document exchange protocol that is normally file-based, EDI enables firms to periodically exchange data but not to engage in emerging, continuous digital business processes.
Thus increasingly, providers that support all of these integration patterns via a single platform can add value to an Enterprise
Emerging Technologies - RPA, Blockchain, IoT, AI and where they may fit in
EDI will still have a place in solving challenges for today’s and future supply chains, but Enterprises will drive investments in emerging technologies like RPA, IoT, Blockchain-based networks and AI, with EDI and API based integration working alongside.
Research by IDC projects that organizations will gain a 308 percent return on investment with modernized B2B integration, or more than $4 in benefits per $1 invested.
The application of these technologies is far ranging, but value is ultimately rooted in business outcomes driven by a renewed emphasis on multi-party supply chain collaboration. As usage and interoperability across trading partners expands, businesses can also capitalize on a greater ROI and value profile.
Businesses will increase investments in working with trading partner ecosystems to achieve shared outcomes and goals to deliver a superior customer experience.
In addition to integration via EDI and API methods, organizations will increasing invest in Robotic Process Automation (RPA) technologies to continue to automate manual non-value added tasks in back office operations. RPA and EDI go hand in hand in this regard. In addition, organizations will be able to share more data through IoT solutions, and based on a single shared version of the truth enabled through a blockchain “backbone,” and additionally facilitated by AI technology can optimize root cause analysis and introduce new forms of automation.
More and more businesses will implement digital shared ledgers (DSL) based on multi party collaboration that has been traditionally point-to-point in nature (shipper, carrier, customer). The DSL is updated and validated with each transaction, resulting in a secure, permanently recorded exchange. The result is faster, permissioned and auditable B2B interactions between parties. In this scenario, blockchain can augment established B2B integration technologies such as EDI, XML and API-based integration with a new shared visibility overlay for transaction and information flows.