PART 1: EDI – The Platypus of B2B?
The platypus has the distinction of being one of the slowest evolving animals in existence. If this sounds like your company’s current EDI system, you can rest assured that you’re not alone. But before you deem this a bad thing, let’s look at why EDI has remained relatively unchanged since the technology was developed.
Depending on whom you ask or which keywords you search on Google, Electronic Data Interchange (EDI) dates itself back to at least the 1970’s. EDI is nothing more than the notion of businesses electronically delivering business documents such as Purchase Orders and Invoices to each other rather than utilizing traditional paper-based means.
Over the decades since then, even the standards for how the data of these electronic business documents are structured has stayed more-or-less the same. As an example, ASC X12, one of the most commonly known standards in the United States, still functions much as it did in 1979 when it was developed by the American National Standards Institute (ANSI). Part of why this standard has remained constant is because it is still very relevant.
Like many, I vividly remember the peak of the dot com era in 2000. It was in those days that many people firmly believed EDI was going to die and XML would be the new standard going forward. For a variety of reasons, that never came to fruition. And today, EDI has only gained popularity, increasing adoption due to a lower cost of entry through relatively inexpensive software and managed services.
Additionally, Application Programming Interfaces, better known as APIs, have become quite relevant in the transfer of EDI data in recent years. Simply put, an API is an efficient way to integrate disparate systems together. However, APIs are not a replacement for EDI in that they can only move data, not translate it. Yet rarely are any two business systems exactly alike in the format of their data structures and fields. This mismatch is best resolved by the utilization of a standard such as EDI to place parties doing business with each other into a common language. The lack of ability for APIs to perform data translation is a primary reason this technology will complement but never replace the need for EDI.
Digging into the EDI backstory has me questioning whether nudging our platypus toward evolution is the right thing to do. After all, it’s a unique animal that has functioned efficiently for years and years. And there’s no emanant technology that could replace EDI today. But what if we could seriously advance new features that EDI offers to meet the changing requirements driven by digital transformation?
Think on it a bit. After all, just because the platypus has been slow to evolve doesn’t diminish how cool and unique it is. Did you know it’s one of only three mammals in the world to lay eggs? Something else for you to think about until we explore further. When we pick back up with Part 2 of this blog we’ll look at how Blockchain technology could breathe new life into EDI as we know it, without disrupting the extremely valuable role it serves for businesses around the world.