Using electronic data interchange (EDI) enables companies to exchange data with automated data entry instead of manual processes. EDI supports businesses by improving efficiency and facilitating more partnerships between companies along the supply chain. One type of EDI is EDI XML, which uses the XML open standard to communicate data. Companies can use EDI XML to transmit documents with their trading partners.
EDI can bring advantages for some companies, though others will face challenges. Understanding EDI XML and what it does can help your business decide whether to implement this technology.
What Is EDI XML?
EDI XML is a means of formatting EDI data in an Extensible Markup Language (XML) format. XML provides a set of rules for computers to encode documents. Standards-based EDI uses standardized transaction codes, while EDI via the XML open standard communicates information through tags. EDI XML standards create a consistent format that enables the exchange of information between systems.
The Birth of EDI XML
EDI XML has been a hot topic going as far back as 1998. In the late 1990s, the EDI XML file format promised an easier-to-understand, easier-to-use method for exchanging data between businesses. This XML format was touted as simple to comprehend, straightforward, and easier to integrate into in-house systems than traditional EDI formats.
The reality, however, has been a lot more challenging. Since XML messages are simple translations of EDI messages in an XML format, the benefits have not been realized.
EDI XML is primarily relegated to expert users who deeply understand XML and EDI and the business processes involved. Most XML users have faced challenges including:
- File size: One of the biggest issues with XML documents has been the incredibly large file sizes associated with its tags. The file size increases the burden on organizations using XML files, networks, storage systems, and processing systems.
- Implementation: XML EDI solutions have proven to be as difficult to deploy and learn as traditional EDI formats like ANSI x12 and EDIFACT and is no more flexible, negating any practical reasons to adopt this style of electronic business documents.
EDI XML does have some potential benefits. Consider the following advantages of XML business transactions:
- Ease of use: Since XML is a language that is frequently used in the data integration process, EDI XML could make the process easier, in theory. However, improvements in the technology have not yet been made.
- Cost of use: XML uses the internet to transmit data, which could reduce the cost of onboarding new trading partners.
- Readability: XML tags are more human-readable than raw EDI data formats, making XML data exchanges easier to troubleshoot.
However, since most trading partners have developed unique, individual "implementations" of EDI, the same is likely to happen with EDI XML. This individualization negates any benefit from the more straightforward format of XML EDI documents.
Is XML Dead?
EDI XML is not dead — despite the scant success in the marketplace, there have been limited adoptions of this business data format. The Rosetta Net standard is an EDI XML standard that has seen some degree of success in specific industries. In addition, EDI standards bodies like the UN and ANSI are working on creating EDI XML standards that would make the adoption of XML-based solutions easier. However, these bodies face two challenges, both of which are unlikely to resolve any time soon:
- They must show that EDI XML can provide significant advantages over standard EDI.
- They must convince the large retailers to adopt EDI XML as a single, unified standard format.
EDI XML as a Feature
Many EDI software vendors have begun to tout XML EDI files as a key feature of their software. However, small businesses should think twice before adopting EDI XML entirely. The cost of conversion from EDI to EDI XML may be higher than the technology is worth. It may be better to consider XML data as a "peripheral" technology until large retailers like Walmart and Target begin to demand its use.
Should you consider EDI XML? If a trading partner is asking you to use EDI XML, consider the benefits and reasons for doing so. If they agree to use traditional EDI files, it will likely save you both money in the long run.
Stay Connected Using TrueCommerce's EDI Software
Your small, mid-sized, or enterprise business needs an EDI solution that grows with you, connects you with trading partners, and gives you more business opportunities. Whatever your company chooses, TrueCommerce offers a range of EDI solutions to meet your needs. Our EDI software connects global trading partners and enables integration with your ERP and business system so that you can stay even more connected. Plus, TrueCommerce works closely with organizations like GS1 to keep up with evolving EDI industry standards, so you can rest assured your EDI solution is on the cutting edge.