Will XML format become the EDI standard?

Posted on 9 Aug 2019 by The Manufacturer

Electronic Data Interchange (EDI) provides trading partners with automatic, standardised business document exchange. To process documents, the data needs to be converted to and from different EDI formats, very often modified to partners business needs.

Comarch, a global provider of innovative IT, explores the current landscape of standards used in the Electronic Data Interchange and determines whether the XML format will become the world’s de-facto standard format.

Electronic Data Interchange came onto the scene in the 1960s, enabling companies to standardise and digitise their customer or supplier communications, such as purchase orders and invoices.

The most common EDI standards include:

  • UN/EDIFACT – United Nations/Electronic Data Interchange For Administration, Commerce and Transport, developed under the United Nations. EDIFACT has been adopted by the International Organisation for Standardisation (ISO 9735) and has become the international standard for the EDI operations.
  • EANCOM – a subset of the UN/EDIFACT and contains only the messages used in business applications. It was originally developed in 1987 for retail and FMCG/consumer goods suppliers and was later adopted in healthcare and construction. It was taken over by GS1 in 2015.
  • TRADACOMS –developed in 1982 as one of the precursors to UN/EDIFACT for retail and primarily used in the UK. Despite EANCOM EDIFACT making it increasingly obsolete, the majority of UK retail EDI traffic still use TRADACOMS
  • GS1 XML – one of the two standards which GS1 recommends for electronic business messaging. GS1 XML doesn’t replace GS1 EANCOM, rather it provides another technology standard to support the exchange of transactional data. Individual industries will dictate the use of either standard. Using the GS1 XML specification provides a standardised and predictable structure for electronic business messages, enabling trading partners to communicate business data rapidly, efficiently and accurately – irrespective of their internal hardware or software.
  • ANSI ASC X12 – the Accredited Standards Committee (ASC) of the American National Standards Institute (ANSI) was chartered in 1997 to uniform standards for inter-industry electronic exchange of business transactions. X12 is one of the most popular EDI messaging standards and is used nearly universally across industries for various use cases. It’s also the basis for other EDI standards. There are more than 320 X12 transaction standards that are continuously updated, making X12 one of the most complete EDI standards in use today.
  • HIPAA – The Health Insurance Portability and Accountability Act was enacted by the US congress in 1996. HIPAA established the national standards for electronic healthcare transactions and national identifiers for providers, health insurance plans and employers. The standards, based on X12, should improve the efficiency and effectiveness of the health care system by boosting the use of EDI in the US healthcare system.
  • VDA – This organisation develops standards and best practices to serve the needs of companies within the German automotive industry. The VDA has developed more than 30 messages to meet the need of companies such as VW, Audi, Bosch, Continental and Daimler AG.
  • ODETTE – was originally conceived by experts from European vehicle manufacturers who were seeking to make use of the rapid developments in information and communications technology (ICT). Results from earlier work in several individual national bodies convinced these experts that they needed to work together to develop pan-European standard EDI and thus the Organisation for Data Exchange by Tele-Transmission in Europe (Odette) was born in 1984.
  • SWIFT – The Society of Worldwide Interbank Financial Telecommunication was formed in 1973. SWIFT operates a global financial messaging network which exchanges messages between financial institutions and/or banks. The majority of interbank communications use the SWIFT network. The SWIFT document standard is split into four areas: Payments, Trade Services, Securities and Trading.
  • SAP IDOC – SAP iDocs (intermediate documents) are standardised documents used to communicate and exchange data with both SAP and non-SAP systems. They are similar to EDI documents and are widely used to exchange data or documents, like: Purchase Orders, Invoices, Advanced Shipping Notices (ASNs).
  • UBL – Universal Business Language, an open library of standard electronic XML business documents for procurement and transportation. UBL was developed by an OASIS Technical Committee with participation from a variety of industry data standards organisations. UBL traces its origins back to the EDI standards and other derived XML standards

Technologies come and go, yet EDI still prevails as the preferred solution for exchanging B2B transaction data, with companies around the world using different EDI standards to fulfill their requirements and, crucially, to ensure interoperability between business partners.

Adoption rates

To answer whether XML will become the EDI standard, lets look at the adoption rates of various different standards.

According to the Implementation of GS1 EDI Standards in 2018 report, the adoption of GS1 XML standard grows year on year:

Implementation of GS1 EDI Standards in 2018 report: The adoption of GS1 XML standard

The report also shows that the adoption of GS1 EANCOM standard is on the increase:

Implementation of GS1 EDI Standards in 2018 report: The adoption of GS1 EANCOM standard

The graphs above show that both EANCOM and XML adoption is growing. Furthermore, this growth is comparable, as demonstrated in the graph below where the yellow line is GS1 EANCOM and the blue line is GS1 XML:

Implementation of GS1 EDI Standards in 2018 report: The adoption of both EANCOM and XML standards.

So, will XML become the EDI standard?

XML is becoming increasingly popular and is often the standard when it comes to the native language of applications such as ERP, TMS, WMS and accounting systems. Equally, XML adoption is growing in the field of EDI, growth that we foresee continuing for the foreseeable future.

However,at this stage we would not say that XML is going to be the standard for Electronic Data Interchange.

There are many different standards in use around the world, with sector specific standards (like GS1 standards for retail, or VDA for automotive) constantly being developed. What’s more, they guarantee a standardised interoperability between business partners which is the main principle of the EDI.

Tomasz Spluszka, Consulting Director of Comarch E-invoicing department.Tomasz Spłuszka graduated from Cracow University of Economics with specialisations in Economics and International Relations.

He has been working for Comarch since 2006, when he began his career as Key Account Manager in the Business Services Unit. In 2007, he was promoted to Business Solution Manager in the Comarch E-invoicing Business Unit.

In his current role as Consulting Director of Comarch E-invoicing department, he is responsible for international operations.