EDI or XML: Which Do You Choose?

Many considerations must be assessed when deciding on a standard format for exchanging information electronically with trading partners.  Two of the more widely used document standards are Electronic Data Interchange (EDI) and Extensible Markup Language (XML).  Of course, when doing business with buyers and larger partners it is generally necessary to comply with the requirements of those trading partners.  However, it is good practice, and demonstrates good business sense, to be proactive and develop an in-house (internal) data specification (and format) that will provide an option for smaller partners to comply with.

Questions must be answered before best decisions can be made for your needs. 

First, is storage “cost important”?  If so, then EDI would be the popular choice.  EDI syntax does not contain much overhead compared to the syntax of XML.  If a large document history needs to be stored in XML, it can easily be up to five times larger than the storage of EDI.  This could cost not only storage space but also backup time.

Second, does the data need to be “user friendly”?  From a readability standpoint, an XML “schema” (metadata) can be created to generate very user-friendly data.  Where an EDI element is strictly data with often-dubious and meaningless segment identifiers, an XML element can be “tagged” with descriptive text.  An end-user report based on XML data could simply output the element tags along and accompanying data where EDI data would require custom programming to make the information readable (particularly if the reports were meant for executive management levels unfamiliar with EDI data).  Consider the differences between the two following examples:

XML <Ship-To-Company>


<Street>529 TERRY REILEY WAY</Street>








It’s easy to recognize the increased storage requirements of XML, but the potential gains by having human-readable “raw” data may off-set any limitations and concerns.

Third, do “production” translation maps currently exist?  Reusability is a big selling point when assessing IT projects and budgets.  Being able to reuse existing implementations will make it quicker and more efficient to add new trading partners.

As technologies continue to progress and organizations are capable of easily deploying (and becoming compliant with) multiple formats, it is increasingly important for companies to design “their” best practices.  This will (at minimum) include the desired data formats to be exchanged with their customers – the formats that will be the most cost-efficient for the company.

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