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What is EDI?

Electronic Data Interchange simplified

Electronic Data Interchange (EDI) is Data Exchange, Translation and Integration of Business Documents between two companies using a Standard EDI data format. An EDI process will allow Company “A” to Exchange, Translate and Integrate business documents from its system internal data format into Company “B” system internal data format.

Business documents are any documents that are typically exchanged between businesses. The most common ones are Purchase Orders, Invoices, Ship Notices, but there are many others specific to various industries.

To exchange business documents between companies, an EDI Standard format is required. The EDI Standard format describes the data, what each piece of information represents and in what format (e.g. integer, text, decimal, date formats).

Most common EDI standards are ANSI X12 and EDIFACT. For each standard, there are many versions (e g X12 4010, X12 5010, D97A, etc.).

Businesses typically use an EDI translator – either as in-house software or via an EDI service provider – to translate the EDI format so the data can be used by their internal applications and enable full integration of such business documents.

The benefits of a properly implemented, fully integrated EDI system can be seen throughout the operations of the business in a number ways:

  • Reduced manual intervention shortens turnaround – Business documents are exchanged electronically rather than physically. Computer-to-Computer communication means documents can be completed in minutes rather than days.
  • After set-up, the running costs are lower than a paper-based system – Correcting errors costs an organization both time and money; so the reduction of errors also reduces costs. Reduced order processing and delivery cycle times result in a need for less inventory on hand. Invoices can be processed more quickly, resulting in an opportunity for the buyer to take advantage of net discounts
  • Reduction in errors and queries in orders – Information that is exchanged electronically does not require manual transcription/data entry. This effectively eliminates the introduction of errors into the initial business process or other business systems that may be affected further downstream.
  • Quicker invoicing leads to prompter settlement – As more of a company’s applications are integrated into EDI, its cash flow will improve due to overall efficiencies that EDI provides. For example, invoices can be processed more quickly, allowing sellers to receive and apply payments more quickly.
  • Better planning and processing – In an electronic environment, rapid receipt of accurate and complete business transactions is the norm. Suppliers can process orders more quickly and shipments can be scheduled accordingly.
  • Increased transaction visibility – As paper documents are replaced with electronic transactions, it is easy to maintain electronic logs or audit trails of document handling activity. This provides the ability to track status and measure performance and throughout the entire process.
  • Improved customer service levels – As business is handled more quickly and accurately, customers at all points of the supply and demand chain have a better experience.

What is api/web services?

The Modern API

Over the years, what an “API” is has often described any sort of generic connectivity interface to an application. More recently, however, the modern API has taken on some characteristics that make them extraordinarily valuable and useful:

  • Modern APIs adhere to standards (typically HTTP and REST), that are developer-friendly, easily accessible and understood broadly
  • They are treated more like products than code. They are designed for consumption for specific audiences (e.g., mobile developers), they are documented, and they are versioned in a way that users can have certain expectations of its maintenance and lifecycle.
  • Because they are much more standardized, they have a much stronger discipline for security and governance, as well as monitored and managed for performance and scale
  • As any other piece of productized software, the modern API has its own software development lifecycle (SDLC) of designing, testing, building, managing, and versioning.  Also, modern APIs are well documented for consumption and versioning.

Web Services

a complete web service is any service that −

  • Is available over the Internet or private (intranet) networks
  • Uses a standardized XML messaging system
  • Is not tied to any one operating system or programming language
  • Is self-describing via a common XML grammar
  • Is discoverable via a simple find mechanism