EDI vs. cXML

Many years ago (I decline to admit how many!) I often overheard our EDI (Electronic Data Interchange) expert in a nearby office cubicle as she supported multiple dealer transactions. The conversations were highly technical with a level of heightened urgency. She focused on keeping the dealers’ business transactions flowing without any bumps or lag time.

Is EDI still relevant to the independent dealer today or is it being overtaken by cXML?

EDI was created to allow businesses to exchange paperless information with their trading partners. The American National Standards Institute (ANSI) is a governing body that defined and developed a common format called EDI x12 . Because EDI adheres to strict standards and definitions of these documents; purchase orders, invoices, advanced ship notices; the transactions are very predictable and reliable. Each document is assigned a three-digit number, like 850 for purchase order, 810 for invoice, etc. The documents have agreed upon segments and elements that tell the business partners what they’re sending, usually through FTP (File Transfer Protocol).

It’s all very structured and consistent. Many industries trust EDI with their financial transactions.


In comparison, cXML (Commerce eXtensible Markup Language) can appear like the Wild, Wild, West. It was created by Ariba in 1999, so it’s not all that new. In cXML there isn’t a governing body for standards. The Internet allows a shift to the future where “anything goes” — which opens the door to many possibilities. One of those that dealers can harness are powerful punch-out catalogs on their e-commerce sites. cXML software opens a catalog seamlessly on another website and lets your customers select items that go into your Webstore’s shopping cart; that’s an example of harnessing the exchange of information in a less structured way.

It isn’t nostalgia that keeps EDI around. Lillian Yeh, CEO of Thalerus Group, calls it, “the greatest idea ever.”

The loyal EDI doesn’t appear to be giving up for the “new” kid on the block. It’s about knowing what tool is right for the job.

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