API-Led B2B Integration

In the first part of this educational blog series, we discussed the difficulties posed by legacy systems and the fundamentals of legacy modernization. To be able to modernize a whole B2B ecosystem or an outdated EDI technology, it is essential to start with modernizing the various EDI process components. API-led B2B integration refers to a modern approach to integrating B2B systems and processes using APIs (Application Programming Interfaces). This is an architectural style that focuses on designing integration solutions by breaking down complex systems into reusable and manageable APIs. In this blog, we will explore as how transmitting data via EDI can be effectively and sustainably modernized using a modern API-led approach and underscore this understanding by looking at several industry scenarios.

EDI processes

EDI processes consist primarily of three components: pre- or post-processing, translation (mapping), and transmission as shown below. This is true for both inbound and outbound EDI process flow.

Figure 1: Typical EDI outbound flow

In this blog, we will focus on the transmission part of the EDI flow. Once the documents, such as purchase orders, invoices or shipping notices, are prepared and translated into a standard format like ANSI X12, they need to be transmitted from the sender to the receiver. This process involves establishing a secure and reliable communication channel between the trading partners.

Since its inception, EDI technology has utilized a variety of methods to transmit data from one system to another. These methods of communication may include FTP, FTPS, SFTP, RosettaNet, X.400, and AS2, among others. Experts in the technology industry have used one of these communication methods for data transfer for years. Each of these methods has its advantages and disadvantages, so it is not advisable to determine which method is the best, as each has its own use case and associated dependencies. However, one thing they all have in common is that none of them is used for real-time data transfer. By saying that, we are not really undermining the capabilities of these communication methods, which have been in use for years and accomplished incredible feats in the industries. Rather, we are exploring an option to fill the void, as some of them can provide very close to real-time bulk data transfer capability but cannot still provide the most effective method for real-time granular level information transfer or update. That is where API-led approach comes handy.

The API-led B2B integration approach

Figure 2: APIs can support modernized B2B integration

EDI is typically batch-oriented and asynchronous, with scheduled data exchanges. APIs, on the contrary, enable instant data updates and responses, allowing for real-time interactions. With API-driven integration, businesses can achieve real-time visibility, collaboration, and synchronization with their trading partners, resulting in improved operational efficiency and quicker decision-making.

API-led B2B integration is a strategic approach to facilitating B2B integration, with a specific emphasis on leveraging APIs as the primary mechanism for establishing connections and integrating systems across diverse organizations. The centralized integration approach is enhanced by eliminating point-to-point integration.

API-led B2B integration prioritizes the establishment of an API layer that abstracts underlying systems, enabling standardized communication and data exchange. This approach brings several advantages, such as enhanced agility, scalability, and reusability through system, application and partner integration.

The key components of API-led B2B integration include:

• System APIs, in the context of API-led integration, refer to the APIs that expose the functionalities and data of individual systems or applications. These APIs provide a standardized and controlled interface for interacting with specific capabilities of a system. They act as fundamental components for integration, enabling diverse systems to interact and exchange data in a controlled and precise manner. They shield the complexities of underlying systems and offer a streamlined and uniform interface to access their functionalities, simplifying the whole integration process.
• Process APIs orchestrate and coordinate the flow of data and operations across multiple system APIs to accomplish end-to-end business processes. These APIs provide a higher level of abstraction, allowing for the seamless integration of various system APIs to automate complex traditional EDI. They define the sequence, logic, and rules required to execute a specific business process by invoking the appropriate system APIs at the right time and in the right order.
• Experience APIs provide a unified interface for consuming data and functionality from multiple underlying systems. They abstract the complexities of the backend systems and present a simplified and consistent interface to the consuming applications or partners. By leveraging experience APIs, organizations can provide a consistent and unified experience to consuming applications or users, simplifying data access and presentation in the EDI flow.
• An API Gateway is a centralized component that acts as an entry point for managing, securing, and orchestrating API calls between clients and backend services. API Gateways are crucial to protect the internal IT landscape, which is important even if you are only consuming external APIs.
  The SEEBURGER BIS API Gateway accepts API calls, checks the caller’s access permission and redirects the requests to the internal services or translates them to internal interface calls. This way, the BIS API Gateway protects your data assets and applications from unauthorized accesses and decouples internal interfaces from the published API.
• An integration platform like the SEEBURGER BIS Platform provides tools and services for designing, building, deploying, and managing APIs and integrations. It includes features such as API management, message transformation, data mapping, and workflow orchestration.

Ultimately, through the implementation of API-led B2B integration, organizations can enhance connectivity between their internal systems and external partners, streamline business processes, facilitate real-time data exchange, and promote innovation by facilitating seamless integration with new applications and services.

Industry-specific scenarios for API-led B2B integration

To understand the benefits resulting from API-led B2B integration, let us go through some industry-specific scenarios where both EDI and API is utilized to accomplish the most effective B2B integration for modern businesses.

Integrating EDI and APIs enhances supply chain management by facilitating real-time data exchange among trading partners. EDI enables standardized exchange of purchase orders, invoices, and shipping notifications, while APIs complement this by offering real-time visibility into purchase order tracking, inventory levels, shipment tracking, and supplier performance. This integration enables organizations to attain comprehensive supply chain visibility, optimize inventory management, and make proactive decisions.

EDI plays a pivotal role within the realm of financial services, particularly in the domains of electronic funds transfers, payment processing, and invoicing. APIs possess the capability to harmoniously amalgamate EDI data with financial systems, thereby facilitating the smooth execution of real-time payment transactions, providing instantaneous access to financial data, and automating the process of reconciliation.
Last but not least, APIs play a vital role in complying with Open Banking regulations like the Payment Services Directive 2 (PSD2). FSI organizations can expose APIs to securely share customer account information with authorized third-party providers, fostering innovation, and enabling new services and products.

In the (online) retail industry, standard EDI transactions like purchase orders, shipment notices, invoices, and purchase order acknowledgments are frequently used for partner interactions. By seamlessly integrating EDI data with e-commerce platforms through APIs, retailers can achieve efficient synchronization of product information, real-time updates on inventory availability, and order tracking. This integration ensures accurate and up-to-date information for online shoppers, resulting in an improved customer experience.

There is extensive usage of EDI between healthcare providers, insurance companies, and government organizations to facilitate the transmission of medical claims and patient information. By leveraging APIs, the integration of EDI data with Electronic Health Record (EHR) systems becomes possible, enabling seamless and convenient access to medical records, laboratory findings, and prescription medication details. This integration enhances care coordination, improves data accuracy, and promotes interoperability among healthcare systems.

Today, major online marketplaces such as Amazon, Walmart, and Shopify have their own APIs in addition to the traditional EDI transactions. These APIs assist in real-time order management, inventory synchronization, shipment and tracking, product catalog management, and financial data exchange. Businesses can achieve efficient and streamlined processes, enhanced data accuracy, and improved customer experiences by combining EDI and APIs in marketplace integration. This approach facilitates smooth connectivity among marketplace platforms, sellers, and other systems, promoting a strong and dynamic marketplace ecosystem.

How SEEBURGER can help

Figure 3: SEEBURGER BIS API Integration and API Management

SEEBURGER offers API integration and API management as a separate application in the one centralized integration platform. It is designed to deal with all the challenges associated with providing data, data integration and data security. APIs integrated through the BIS platform let you connect internal and external systems and applications, while the BIS API Gateway governs access rights and makes sure that data is provided and retrieved securely. The BIS API Portal is an easy-to-use API management interface, which offers features such as monitoring tools and an API catalogue and can be easily extended with several useful features.

In the next blog of this educational series, we will be discussing another important aspect of the translation process of the EDI flow. We will also explore the significance of cloud strategy for B2B integration and other aspects of legacy modernization.

Source: https://blog.seeburger.com/api-led-b2b-integration/