Skip Stein
Consulting Services

Co-existence of Traditional EDI with XML-EDI

By Skip Stein

Management Systems Consulting, Inc.


Electronic Data Interchange (EDI) provides businesses with the ability to exchange documents easily between trading partners without the laborious, time consuming, and error prone movement and handling of paper. The phrase "untouched by human hands" holds special meaning for modern business. It means that a transaction that took between 5 and 8 days, one way, now takes only minutes, or can be scheduled to suit the needs of the recipient.


EDI is comprised of a set of national and international standards that control the formatting and presentation of data within each transaction.  Among the standards currently utilized around the globe are:

  • ANSI X12 standard and its subsets.
  • EDIFACT European Standards for electronic commerce.
  • HIPAA USA only based standard for healthcare transactions.  It is a subset of the ANSI X12 standard set with additional healthcare specific transactions.
  • TRADACOMS UK based EDI standard currently in declining use.

These standards have many sub-sets that are dictated by a variety of specific industries.  These various industries include:

  • Automotive
  • Healthcare
  • Electronics
  • Financial
  • Retail
  • Grocery
  • Transportation

The translation of data and business documents is essential to the smooth communication of information between businesses. Today's documents can be stored electronically, translated to standard data formats, transmitted (via Internet, value added network or point to point) in seconds, and processed by the trading partner's computer applications.


In recent years, many industry groups and various standards organizations have embraced Extensible Markup Language (XML) as a way to ‘enhance’ basic EDI processing of documents.  XML is a document presentation format that is an approximate outgrowth of the Standard Generalized Markup Language (SGML).  SGML is both a language and an ISO standard for describing information embedded within a document. HyperText Markup Language (HTML) is based on the SGML standard.


The central issue with XML, as far as SGML comparison is meaningful, is the alleged "degree of freedom" introduced by the ability to build entire XML systems without any DTD at all. Document type declarations are the very basis of SGML. They have been put into the standard because they are invaluable tools in consistent design, reusability, exchange, data structuring, the very basic and strong concepts SGML has been built upon.


Of course, doing without any DTD is an XML option. XML does allow DTDs. DTD design is time-consuming. It is expensive. It is skill-demanding. It forces you to build long-term plans about your data. It is in many situations a death sentence against your previous structuring practices, or lack of them. All of these requirements go contrary to the "Web culture".


The primary difference between traditional EDI documents and the new versions of XML based EDI documents is the end use.  Traditional EDI has been designed for machine to machine interface: untouched by human eyes/hands.  XML EDI is designed for human use, format and presentation of the basic EDI information; excellent for Web presentation and internet site usage.  These are two dramatically opposed uses for a similar intended functional usage.


By adding the complexity of XML to a basically machine intended document adds layer upon layer of complexity; not to mention data element complexity.  Comparatively, XML EDI is 100 fold larger in byte data transfer requirements to transmit than traditional EDI.  XML formed EDI transactions are much more complex to parse and manipulate; although they are much easier to format for web presentation.


Converting traditional EDI documents to an XML format dramatically increases complexity, increases bandwidth requirements and confuses the basic standard of EDI presentation as most XML documents are transmitted without a structured DTD.  This means that each document much be ‘translated’ by some form of custom coding structure as opposed to the controlled form and format of traditional EDI.


Both traditional EDI and XML-EDI can and should co-exist.  The functional usage of each type is separate and designed for different consumption.  The replacement of machine to machine documents by human readable presentation formats makes for poor business efficiency.  The vast majority of electronic transactions can (and should) be machine to machine; maximizing the efficiencies inherent in this form of communication and business transaction processing.  XML-EDI can be utilized to capture web based or human interface interactive transactions; which are much fewer in volume and usually less significant in business financial impact.


Selecting which of your company’s business transactions should be formatted in traditional EDI or XML-EDI depends on the destination of each transaction.  If the recipient is to be another computer, by all means use traditional EDI formats.  If the intended recipient is a human operator that would manually interpret the information and possibly modify or enhance its content, then XML-EDI is the solution.


Integrating EDI into your business process requires this in-depth understanding of the business rules, irregardless of the format or presentation of the transaction.  It is much, much more than a simple creation of an EDI 'map' (the component that translates transaction documents electronically into a standardized format for electronic exchange), whether XML or traditionally formatted.  Since many of the normal manual controls will now be encompassed by an electronic processes, well documented and understood automated controls have to be implemented to compensate for the manual controls rendered during the manual or semi-automated transaction processing operation.  These controls need to be designed by a professional who understands the business process flow (material handling, manufacturing, distribution, and accounting) as well as the technical requirements of the EDI process.  If there is not sufficient expertise within your organization, it is a good idea to consult with experts in the field of EDI implementation to train staff and transfer knowledge into your organization.  Once established in a well-controlled and documented environment, the EDI process tends to be extremely stable and easy to maintain.