EDI vs. APIs: Learn the key differences between the two and how combining them solves data exchange challenges. Discover how ADI programs can streamline your processes.
Successful businesses run on seamless coordination. That means processing orders on time, shipping products as scheduled, and accurately sharing important information with suppliers, retailers, and logistics providers.
To do this, many companies rely on Electronic Data Interchange (EDI) and application programming interfaces (APIs). But which is the best fit for your business, and do you really have to choose one over the other? Or are there benefits to using both?
Here, we’ll explain thekey differences in EDI versus APIs, their advantages and potential limitations, and how the two systems work together to optimize supply chain operations.
What Is EDI?
Businesses use EDI to send and receive important documents — like invoices, purchase orders, and shipping details — without depending on emails, faxes, or paper copies. Instead, EDI follows a standardized format that allows suppliers, customers, and carriers to exchange information clearly and efficiently.
By automating data transfers, EDI integrations allow businesses to minimize human error, increase productivity, and prevent costly supply chain disruptions.
Here’s a quick overview of EDI’s benefits and common challenges businesses may face when implementing it:
Advantages of EDI
Secure data exchange:EDI uses encryption and strict security protocols to protect business data and prevent unauthorized access.
Faster document processing:Automating the exchange of invoices, purchase orders, and shipping details reduces manual work and speeds up transactions.
Better supply chain visibility:EDI provides real-time updates on shipments, payments, and inventory, helping businesses stay organized and avoid delays.
Challenges of EDI
High IT requirements:Implementing EDI requires specialized software, system integration, and ongoing IT support.
Compatibility challenges: Different partners may use different EDI standards, requiring extra configuration to ensure smooth communication.
Lengthy onboarding: Adding new partners to an EDI system can take time, which may temporarily slow down supply chain operations.
What are APIs?
APIs act as digital messengers that allow software systems to communicate instantly. Unlike EDI, which transfers entire files, API technologies enable real-time data exchange between supply chain systems.
Think of APIs as interpreters between different applications. For example, when a customer places an order on an e-commerce site, APIs translate and transmit the order details to the warehouse in a format its system understands without requiring manual input.
Like EDI, APIs help businesses streamline transactions, reduce errors, and improve efficiency. They also offer greater flexibility and are easier to integrate with customer relationship management (CRM) systems, databases, and enterprise resource planning (ERP) platforms.
Like EDI, APIs offer many advantages, but there are also important factors to consider:
Advantages of APIs
Seamless connectivity: APIs link multiple software systems, making data exchange faster and more efficient.
Real-time updates: Unlike EDI’s batch processing, API feeds provide instant data updates throughout the supply chain.
Easy integration:APIs function via standard internet protocols like HTTP, HTTPS, JSON, and XML, making them easy for development teams to work with.
Challenges of APIs
Inconsistent structure:API setups vary in authentication, data formats, and integration methods, which can cause compatibility issues.
Complex implementation: Integrating APIs with legacy systems or ERP platforms may require specialized IT support.
Security risks: Protecting API connections requires strong authentication and encryption, which may involve additional investment in cybersecurity.
EDI vs. APIs: 5 Key Differences
EDI and APIs improve supply chain communication but differ in security, onboarding, cost, and use cases. If you're considering alternatives to EDI systems, here's how APIs compare:
Security
EDI uses standardized encryption protocols to protect data during transmission. APIs offer secure communication, but security strength depends on authentication methods, access controls, and encryption standards.
APIs are useful for real-time data exchange but can pose security risks if not properly managed. Unlike EDI, which follows industry-standard encryption protocols, APIs require businesses to implement their own security measures, including authentication, encryption, and access control. Without proper safeguards, there’s a risk of unauthorized access or data breaches. Because of this, regular security maintenance is a must.
Ease of Onboarding
EDI onboarding can be slow and complex due to varying transaction standards that require customized mapping. APIs, on the other hand, follow standardized protocols that are faster and easier to integrate.
Cost
EDI integrations require a significant upfront investment in software, hardware, and maintenance. Meanwhile, APIs typically have lower setup costs but may come with expenses like API gateway fees and rate limits.
Both approaches help reduce costs — EDI minimizes errors and delays by eliminating paper-based transactions and manual input, while APIs speed up integration with existing systems, cutting down on custom development time.
Common Use Cases
EDI is mainly used in retail, manufacturing, and healthcare industries, where businesses need to exchange structured data, especially in supply chain and logistics. In contrast, APIs are much more flexible, allowing real-time connections across e-commerce sites, mobile apps, cloud services, and social media.
Supply Chain Speed
Both EDI and APIs improve supply chain efficiency, but they do so in different ways.
EDI allows businesses to exchange important documents automatically, reducing the need for manual data entry and minimizing errors that can cause delays. APIs go a step further by allowing real-time data sharing, so shipments, orders, and inventory updates are processed instantly instead of waiting for scheduled batch updates. By working together, EDI and APIs help businesses manage supply chains more efficiently and respond to changes faster.
EDI and API Integration
Fortunately, you don’t have to choose between EDI and APIs — in fact, they work even better together. EDI enables secure, structured data exchange and ensures compliance, while APIs provide real-time updates, flexibility, and scalability.
Here’s how it works: APIs handle quick tasks like checking inventory, confirming orders, and sending alerts. Once that’s done, EDI steps in to securely transfer large amounts of data between suppliers, warehouses, and shipping partners.
For example, when a customer orders a product online, APIs instantly check if it's in stock, process payment, and notify the warehouse. Then, EDI takes over to send order details to the supplier and shipping company, ensuring that it arrives on time.
Combining EDI and APIs streamlines operations, reduces redundancies, and lowers IT overhead — all while keeping data safe and organized.
How to Choose Between EDI and APIs with Orderful
Which solution is best for your business? It depends on your needs. If structured data exchange and compliance are priorities, EDI is the way to go. If real-time data and scalability matter more, APIs are the better choice.
The real power comes when EDI and APIs work together — that’s what Orderful delivers.
Orderful is a cloud-based EDI solution built for modern businesses. With our prebuilt APIs and EDI platform, you can go live with new trading partners in days, not months — 10 times faster than other EDI providers. Onboard in nine days or less and connect with over 1,000 retailers, carriers, and manufacturers. Ready to stop wasting time on outdated EDI systems and discover the future of EDI? Connect with an Orderful expert to book a demo today.
