Enterprise strategies: Say goodbye to EDI

The venerable EDI (electronic data interchange) provided significant contributions to automating intercompany data communication, benefiting productivity and reducing inventory overhead.

Although it never made substantial inroads outside of the largest enterprises, due primarily to the cost and complexity of integration, EDI’s entrenchment remains sizable. But its deficient flexibility and costly imposition for new partner integration threaten to put EDI users at a disadvantage as they compete in a world of real-time, distributed e-business processing.

XML, on the other hand, boasts the vocabulary exchange basics of EDI but is far more flexible and demands a less-intensive start-up investment.

The increasing popularity of XML has companies questioning EDI’s future and facing costly provisions to rescue these systems from obscurity.

But B2B transactions require more than just on-the-fly integration, and stand-alone XML is still insufficient for tackling many of its complexities.

Extending EDI to XML-based systems will entail more than synchronizing business documents and vocabularies. Trading partners require process-definition capabilities, service-level guarantees, robust security, and transactional efficiency that XML remains challenged to provide.

Although solutions exist for transforming EDI to XML, the majority that I have seen are reliable only in scenarios of minimal transaction volume or limited security requirements, and do little to leverage XML’s emancipating data promise.

But that may not be the case for long.

Many of the benefits that EDI currently holds over XML are showing up in Web services standards such as ebXML (e-business XML), with provisions for process flow and transactional integrity, as well as core architectural components aiming to facilitate exchange between EDI and XML. ebXML holds promise for opening EDI networks to a broader array of opportunity.

Will XML supplant EDI as the de facto enterprise data-transfer mechanism? Given the clear rate of industry adoption, I would say the eventual answer is yes. We will likely find EDI to have made its mark as a training ground for XML in the advance of data interchange.

But this transition isn’t going to happen overnight, and it won’t require you to leave behind a well-oiled EDI investment.

James R. Borck (james_borck@infoworld.com) is managing analyst in the InfoWorld Test Center.