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Why it’s a good idea to ditch EDI

30 April 2018
Best of breed

Whether you realise it or not, you come across API’s every day. Have you ever wondered how it’s possible to log into external apps using either your Facebook or Google account? API’s are the answer to that one. But did you also know that APIs are the key to efficient transport management?

It’s a reality for almost every company: your own IT systems have to communicate with different applications and platforms. These might be self-made solutions or systems designed by partners. Either way, sometimes data has to go from application A to application B — and possibly travel back as well.

In the past, there wasn’t any other option but to seize the opportunity and build some tool that would allow multiple incompatible systems to talk to one another. This ad hoc approach is what we call an EDI: Electronic Data Interchange. It’s more or less a solution to build bridges between two IT solutions, for example to communicate orders or import address lists. These examples aren’t picked randomly: the basic function of an EDI is to pick up a file from one system and transfer it to another system. 

EDI is completely out of date

But there is one problem: EDIs belong in the past. The concept was conceived of about thirty or forty years ago, when the internet we know today didn’t exist yet. Communication back then was merely one-way traffic, like faxing. You sent a fax, you crossed your fingers for the message to arrive and then, hopefully, be read by the right person. There was no way to be absolutely sure any of this was successful, though. Data communication today, however, has to travel in both directions simultaneously, for many different reasons. It’s no longer a fax message you’re sending out, but a chat conversation instantly travelling both ways. In short, EDIs are completely out of date.

With an API, everybody speaks the same language

Today, it’s possible to do better. A lot better. These days, a good IT solution is designed to function in an environment where other systems are operating at the same time. The ability to communicate with another application is built in from the get-go, making it an integral part of the design. It’s an absolute must.

Because a developer cannot guess what other systems his creation will be required to exchange data with, the concept of the Application Programming Interface (API) was developed. Two key concepts to bear in mind are SOAP and REST: Simple Object Access Protocol and Representational State Transfer. Both of these are protocols developed following agreed-upon standards, meant to determine how applications exchange data. The builder from the first app doesn’t need to know exactly how the second works. Because the communication is organised via SOAP or REST, everyone involved knows how to structure their data communication. It’s as if everyone speaks the same language, regardless of where they’re from.

Select the best solutions

APIs also enable a new IT strategy, allowing one to opt for a ‘best of breed’-approach. Remember the times when you had to choose between a couple of all-in solutions provided by a number of big players? That’s all over now. Thanks to APIs, you can easily combine solutions from different IT providers. This allows you to select the standouts that excel in one specific area and then join them together. A lot better than an everything-in-one-solution that works great with some things, but then not so great with others. Of course, this trend stresses the importance of easy communication between similar systems.

Logistics are falling behind

Take a step outside the logistic world and you will notice that APIs are very established in many other domains as well. There’s barely even any discussion about them, that’s how convinced everybody is of their utility. APIs simply have become the standard in the IT world. Still, our sector stubbornly clings to EDIs, even though they are out of date and don’t function well. A recent survey has shown that over 84 percent of logistics providers still use them. In part, this is because a lot of them have heavily invested in private systems in the past and don’t like to meddle with the corresponding EDIs for fearing of trouble. It is also true that not everyone is aware of the benefits of the API approach, a hiatus responsible for many a missed opportunity.

Data is just as important as the transport itself

It might sound like a strong statement, but it’s really true: your data is as important as the goods that are transported. Only with decent, up-to-date data can you play your part in the fast-moving sector that logistic has become. Dynamic prices, just-in-time deliveries, multiple-partner companies,… If  you want to ace this game, your only go-to solution is a TMS serving you all the right data.

Benefits of working with APIs

What are the concrete advantages of working with a system that’s API-based? Actually, there are five huge benefits.

#1. Standardisation

Working with an API means that firstly, you import and export data in a standardised manner. That alone is a huge benefit. When a partner changes systems (or you change partners), there’s no need to start building bridges from scratch. For a developer, integration with an API is child’s play, especially compared to the loads of work that come with building a new EDI. EDIs are an old technology, which usually rhymes with expensive solutions. Oracle of SAP, anyone?

#2. Cost reduction

This easily translates into a noticeable reduction in costs, both in integration as in adjustments. Not only is the setting up of a relation between your systems and those of partners a lot quicker (read: cheaper), changes within any of those systems are dealt with in a less cash-guzzling manner as well. That’s a lot different from the EDI-approach, where each adjustment can require a big effort.

#3. Flexibility

Because the costs to share data with a partner drop when using APIs, you gain some more freedom. All of a sudden, you have the flexibility to change systems and collaborations on the short term, without being confronted with high costs.

#4. Scalability

Upgrading or upscaling can be quite a challenge in an environment that still uses EDIs. The same applies to adding partners when, for example, you have to spread out over a larger territory. That scalability is an option with APIs, though. Which makes sense, because APIs are part of a bigger picture in which your IT solution is built in a more modular fashion. Changing a part or component no longer means your whole system stops functioning.

#5. Real-time data

EDIs often work with regular data dumps. This means there’s a chance that your information is running behind on reality. APIs work in real-time: if something changes, this change is instantly communicated.

In short

APIs offer a lot of advantages. All things considered, they crunch your costs, thus allowing you to be faster and more agile, which in turn creates more opportunities for you on the market. APIs allow you to introduce new systems easily, like that cutting-edge TMS, Control Tower or warehouse management system, that your business needs!