Electronic Data Interchange (EDI) may not be the latest technology, but there’s no shortage of businesses still using it. Those companies, called trading partners, use EDI as a common interchange language to minimize the need for users to reprogram their internal data processing systems.

While alternatives such as XML are touted as faster and cheaper solutions, TechRepublic members say many of their clients are waiting for that technology to mature.

In response to a Gartner Research Note titled “Will XML replace EDI? Not so fast!”, many of TechRepublic’s consultant members wrote to tell us that they continue to do lots of EDI work. Here’s what your colleagues are telling us.

Why use EDI?
Member Daniel F. Nicholson said that many firms are “forced to retain EDI” because the alternatives are expensive, unreliable, or not secure.

“Even McDonalds’ franchise owners and suppliers overwhelmingly reject alternatives to EDI,” he said. “Over the decades of EDI use, ‘standards’ still vary, even within an industry… [as is the case with Ford within the automotive industry].”

A TechRepublic Quick Poll in the Developer Community indicated that EDI still has a place in e-commerce development. Of the respondents who said they use either EDI or XML for developing e-commerce applications, 20 percent said they use EDI exclusively, and 27 percent said they use both EDI and XML (Figure A).

Figure A

EDI offers a middle ground for partners
Dirk Schmitt, a business analyst from Calgary in Alberta, Canada, said he became involved with EDI two years ago when a client requested that all sales transactions be performed over the Internet. The initial conversations focused on XML, but it quickly became obvious that the client and its partners couldn’t come to an agreement on a standard data transfer solution.

Eventually, EDI was considered as a possible solution, but Nicholson is still working with the client to resolve the dilemma.

“If partners [were] currently [using] EDI, then their preference was to continue with that and reserve XML for transactions previously not transmitted electronically,” he said. “EDI is well established and well documented. The only change desired was to eliminate the cost of VANs; i.e., to use the Internet instead.”

(VANs, or Value Added Networks, are companies that provide electronic mailboxes and other communication services for the transmission of EDI documents.)

TechRepublic member dvavassi has had similar experiences. He said he has completed many EDI projects and can name all the drawbacks of EDI but still thinks it’s a viable solution in some cases.

“If parties do not agree on the same XML scheme or DTD [Document Type Definition], how will they ever interchange business documents?” he said. “Has anybody tried to convince two parties to agree on the same DTD?”

EDI as a stepping-stone to XML
Schmitt said knowledge of EDI provides an excellent background for evaluating the varieties of XML “flavors.”

“EDI provides the best [starting point] to make sure that required information is being included in any new XML schema, because EDI has been used by 10,000 companies for several years for data transfer via VANs,” he said. “Certainly, XML, as used with ebXML and RosettaNet, goes beyond straight data transfer and addresses business processes.”

Independent consultant Al Downs said he accepts EDI work to “fill in the gap.” He said he believes that most companies should stick with EDI until they’re ready to implement complete Enterprise Application Integration (EAI).

“Use the tools that the firm has in place and help them move into EAI where it makes sense,” he said. “But the protocols of messaging certainly have changed. XML finally is very accepted, especially as corporations have made a more solid commitment to Internet security. So the bi-sync and sync protocols of the past EDI implementations should and could be replaced with XML messaging using existing tools.”

Predictions for the future…
Kate Spontak, an accounting-software consultant, said after working with accounting software and related programs for 15 years, she is focusing more and more on EDI work.

Jesper Ernst, a member from Denmark, said that many small to midsize enterprises have turned to EDI over the past twenty years. He believes that they will continue to use it because they have invested significant resources in it and know that it works. Ernst, who uses the Electronic Data Interchange For Administration Commerce And Transport (EDIFACT) standard, said he believes that XML and EDI will coexist for many years until an XML “takeover” begins.

“The first phase of a takeover could be that the EDIFACT messages will be ‘wrapped’ in XML, and the next phase could then be full XML,” he said.

Ernst said that the EDIFACT standard can address a wide range of business needs for standard messages and that XML will have to provide the same abilities before companies will be willing to switch from EDI to an XML solution.

Agree or disagree?

Are you a pioneer who is blazing a trail in the conversion from EDI to XML? Write and tell us why you’ve gone that route or post your comments below.