API stands for Application Programming Interface and provides a link between different software systems through defined intercommunication of its interface. Through APIs, a business can connect its technology to any third-party software. It is a cost-efficient and reliable way to integrate multiple software systems without developing internal tools.
APIs are extensively used in many industries, not just in the supply chain. While APIs are more modern and technologically advanced, the industry uses EDIs in many scenarios due to cost or resource considerations. Both functions are essentially the same, yet there is still a heated debate over these two options. Despite the statement about EDIs‘ ‘death,’ it is still deeply rooted in the supply chain industry. With all the capabilities of APIs, they are still not a magic fix to all integration issues.
EDI stands for Electronic Data Interchange and is an older version of integration software. First utilized in the 1970s, EDI has become the basics for data transference between technology systems in supply chains. With technology progress, EDIs became less capable than APIs, which worked faster. However, many carriers and corporations are still hesitant to change their EDIs for various reasons, like low budget, troubles with development and implementation, etc.
Both API and EDI act as data exchange mechanisms. Over the last years, EDIs have mainly become outdated and gradually replaced by APIs, which better serve the modern requirements of supply chains. While APIs are more advanced, it doesn’t mean EDIs are erased from the supply chain environment. What’s more, not all APIs are answers to integration issues. Development and adoption of APIs is a long road; there are many different APIs, with many of them lacking quality and construction. It is not enough to use APIs; it is critical to choose sophisticated solutions that will bring ROI, not implementation burden.