Blockchain + EDI = Faster, Bigger Ecosystems

Blockchain will likely eventually augment or extend the capabilities of EDI rather than displace or replace it

Welcome to the Think Tank with Frank Kenney

With decades of analyst and integration industry experience, Frank Kenney is fountain of knowledge on all things tech. Now, he aims to share that awareness with you. Come back every other Thursday for your biweekly dose of thought leadership in this blog from one of technology’s most insightful thinkers and gain perspective on a variety of topics ranging from what’s happening in integration today to what’s on the horizon, poised to disrupt the integration space going forward.

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I thought I’d share with you a few lines from my script called, “The three things Frank Kenney must say on any stage — anywhere, every time…”

  1. “It’s so great to be back. The last time I was here I didn’t get the opportunity to look around. You know the story — airplane to a car, to hotel, to stage, to a car, to the airport.”
  2. “It’s so refreshing that <<<insert host company name>>> invited me here and that’s a reflection on their commitment to <<<insert topic>>>.”
  3. “Contrary to popular belief, EDI is not going away. In fact, you’re going to invest more in it!”

Suffice to say, when I go speak in front of my son’s PTA group, each line punctuates an uncomfortable silence as parents glance to their neighbors in shared confusion wondering if they are somehow the ones who ended up in the wrong room. But the messages still are key! Especially number three — EDI is here to stay. Now back to my imaginary conversation…

“Did you just say that EDI’s not going away?”

“Yes. Indeed, I did.”

“But, what about <<<insert disruptive technology according to Gartner’s annual hype cycle>>>?”

I admit that new <<<technologies>>> will influence the market, and to a certain, extent augment EDI processes, but it won’t fully replace EDI.

“APIs?”

“Through extensibility, they’ll make EDI better.”

“Cloud integration?”

“Regardless of where you integrate you will still want to use EDI to represent purchase orders and invoices.”

“iPaaS?”

“EDI and more importantly ecosystem and B2B integration technologies will still be a core functionality of these platforms particularly because they help address more than 25% of all common integration use cases.”

“Blockchain?”

“Well, umm, let’s see.”

The blockchain is a highly distributed ledger that can’t be changed without all of the participants in a given network agreeing on the change. More importantly, blockchains power the rapidly growing cryptocurrency technologies and offerings. But blockchains replacing EDI? Highly unlikely.

It’s hard to understand how blockchain technologies will augment an EDI process unless you are aware of all of the microflows and processes that underpin an EDI process. You have to understand all of the things that can go and do go wrong in every day EDI transactions. Take for example, common issues such as nonrepudiation, missed invoices and purchase orders, as well as disputes over any part of the EDI transaction. Potentially, these can be rectified instantaneously due to the nature of how blockchain ledgers work and are governed. This in turn reduces risk, and anytime you have the ability to reduce risk, you can become more creative in your choices of who to do business with and how to find companies to participate in your ecosystem.

Blockchains extend your ecosystem. Blockchains enable the social aspect of your ecosystem. Blockchains create an environment where business partners never have to formally engage to agree on the rules of engagement, service levels, and practices regarding non-repudiation and error resolution. So, in this light, blockchain is a game changer. But it’s not just for EDI; blockchain is a game changer for your ecosystem — making them faster, bigger, and more dynamic.

As I’ve stated before in this blog, ecosystem enablement is the bigger, more lucrative goal for any organization. While some modern integration platforms are embracing blockchain technology, it is mostly as an approach of providing access to additional sales channels in the way that companies see e-commerce platforms.

However, there’s more at play than just the ability to add new channels. Blockchains provide the opportunity to change how we assess risk amongst potential business partners. This makes all the difference when it comes to building ecosystems. Much in the same way HTTPS allowed us to reassess the risk of procuring online financial services such as bank accounts, mortgages and investment portfolios, the blockchain is a game changer because it will enable us to think about opportunities that enrich business processes that we don’t yet fathom today.

And that is the crux of it. Whether your organization is actively exploring disruptive technologies experimentally, in an earnest pursuit to promote efficiency gains, improve operations, or make it easier to conduct business digitally, the increasingly hyped blockchain is a trend worthy of some interest. But, I’ll say it again, “EDI isn’t going away.” If anything, as in APIs, blockchain will likely eventually augment or extend the capabilities of EDI rather than displace or replace this entrenched, reliable, efficient, and standardized mainstay of ecosystem integration.

And by the way, I still haven’t found a more productive way to exchange a purchase order than EDI.

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About Frank Kenney

A former Gartner analyst and current market evangelist and strategy director, Frank Kenney is widely credited as the creator of the term managed file transfer (MFT), and was the first to write about and discuss its modern architecture, platform, and use cases. Previously, Frank served more than 10 years as a research director at Gartner, where he defined the MFT, B2B gateway, SOA governance, and cloud service brokerage (CSB) markets.

Before joining Cleo, Frank held leadership roles in product marketing, aligning vision and strategy with integration products, services, and messaging. As an independent IT consultant, Frank helped technology providers create, validate, and implement a variety of business strategies.

Frank holds a degree in music technology from the Center for the Media Arts, holds degrees and certifications in digital multimedia and instructional technologies, and studied English and computer science at the University of Tampa.