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Is It Time to Say Goodbye to EDI?

Cloud-based software-as-a-service (SaaS) applications offer new ways to digitize supply chain and logistics processes and their popularity is gaining momentum across all sectors. But companies still face challenges when pinning this technology to their underlining B2B communications and data transmission systems.

In the meantime, many executives would probably agree their electronic data interchange (EDI) tools are outdated (EDI dates back to the 1940s, and was the popular choice in the 1970s and 1980s). They lack capabilities to handle today’s Internet and data-driven supply chain demands and have people scratching their heads wondering: What should we do with our old but reliable EDI backbones as application program interfaces (APIs) promise to deliver smarter, modernized solutions and greater efficiency? Is it time to scrap EDI, phase in a replacement or find a way to integrate the parts that still work with more advanced capabilities? How many data-transmission protocols and systems do we need to please customers, many of whom have their own requirements for how data is shared, acted upon and reconciled?

It’s a topic occupying mind space at various companies and research firms as B2B linking expands and evolves and the Internet of Things (IoT) shapes IT spending and deployment.

In an August 2015 blog, Benoit J. Lheureux , research VP at Gartner Research and agenda manager for the application infrastructure group, said he found more than two million companies worldwide connect and interact electronically with each other via B2B networks and are using a variety of different networks and connectivity platforms.

“Competition fuels differentiation, and that means that every channel master does B2B a bit (or a lot) differently, perpetuating the B2B Tower of Babel,” he wrote. “Even if you only sell into a dozen different buyers someone must deal with all the different forms of EDI and APIs.”

These issues will continue to remain complex as “bring your own device” and device managed inventory (DMI) strategies meld with B2B data swapping, cloud-based services, automated purchase order generation and inventory replenishment, and other supply chain and logistics practices.

“Despite the power of APIs, IoT Integration challenges have been cited as the #2 top technology challenge for implementing IoT projects in a recent survey,” Lheureux wrote this past March, citing a Gartner study.

The topic is even hot enough that EFT has it on the agenda of its North American Logistics CIO Forum coming up in November. The proposed talking points include learning how to embrace new data communications solutions, leveraging APIs to enable advanced analytic and more proactive supply chain management practices, and understanding how APIs may improve operation flexibility and speed beyond EDI. 

To get the full benefit of what’s coming out of APIs, companies have to make hard choices about how to maintain or improve their data flow between customers and suppliers. 

What is your company keeping or scraping when it comes to EDI? Where is the EDI-API-B2B communications stream crisscrossing happening at your companies, and what best practices have you keyed in on?

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