The strategic role of APIs with EDI
in modern B2B collaboration
“Pivot” has been the watchword since 2020. With it comes implications of a 180-degree shift – moving in a completely different direction and leaving the familiar, which has served us well, behind. Seemingly overnight:
Supply chains were also affected. Some companies experienced a massive surge in demand, while others experienced severe downturns. B2B infrastructure operating behind the scenes had to adapt to quickly changing workloads and agility became the key to resilience.
While we continue to see the statistic from 2015 that 85% of supply chain transactions are still managed through EDI, Gartner estimates that by 2023, over 50% of B2B transactions will be performed through real-time application programming interfaces (APIs).2 If they are both correct, then the industry is moving towards a hybrid model that includes legacy infrastructure and business formats working side by side with more modern transactional approaches. Obviously EDI will remain essential for batch processing of mission-critical transactions like financial documents and periodic updates. Yet, for net-new B2B use cases and time critical transactions, companies need more flexible trading approaches with partners. Approaches that blend usage of both EDI and APIs will lower the barrier to entry into the network, allow all participants to be up and running faster, and help with supply chain resiliency. We call this the hybrid B2B collaboration approach, which is essential to allow your enterprise to modernize and nuture new business opportunities while preserving existing trading partner relationships.
To continue to enable seamless B2B transactions and integration with partners and customers to keep supply chains moving forward, it’s clear that pivoting isn’t the answer; augmenting is. Augmenting the power of EDI integration with API capabilities within the same system helps to mitigate risk and capture new opportunities. Over a period of decades, EDI has facilitated frictionless commerce, helped eliminate manual paper processes, and delivered significant, persistent, and broad supply chain efficiencies through automation. APIs have emerged as a complementary way to further extend B2B transactions and this hybrid approach is ideally suited to drive additional business value in certain situations. Creating a separate isolated system just to manage B2B APIs creates gaps in the over all business process and value.
APIs figure prominently in almost every IT modernization project, a perpetual journey for every enterprise. Using APIs to connect directly to a transactional system, like an ERP system, makes the data transfer path simpler since the intermediary file transfer server and associated processes are eliminated. API-driven transactions also require fewer resources (storage, memory, compute) to manage the exchange of data, can be secured using a variety of encryption and authentication mechanisms, are simpler to set up and manage, and are faster to execute in real time.