How can you use blockchain for EDI?

Great article! While blockchain is revolutionary, it's actually a type of Distributed Ledger Technology (DLT). DLT is a decentralized, immutable database shared across multiple nodes. This immutable nature means that transactions can't be altered or deleted once recorded, ensuring security and transparency. The real business advantage of DLT goes beyond blockchain's smart contracts or cryptocurrencies. Imagine a supply chain where all parties use the same DLT. This would create a single, unchangeable record of all transactions, eliminating the need for complex EDI systems and simplifying processes. By focusing on DLT, we open doors for broader innovation and efficiency.

EDI is a standardized methodology of exchanging information that blockchain can store in its ledgers as one or multiple blocks and share and exchange data via its consensual processes. As the technology matured, value-added network (VAN) are being replaced by FTP, AS2. We see history repeating itself, with blockchain coming into the picture standard data. The information trading partners need is extracted out of local data sources and formatted according to EDI standards, then synched to the blockchain to make it a single source of truth Blockchain can provide?a more straightforward, all-inclusive approach in B2B information processing and is considered as a foundational block for the multi-enterprise business network.

A couple things I’ve found useful and serving to inspire confidence in Blockchain transactions and scheduling is within the Heavy Equipment Industry. Stocking distribution can interface with OEMs in coordination of purchasing and shipping of non-typical low turn Parts for Service scheduling seeking just in time inventory with reliability! Additionally, the confidence of International Banking use of Blockchain with Letters of Credit platforms greatly serves to inspire highly trusted transaction between distant parties and time of working day variables.

Using blockchain for Electronic Data Interchange (EDI) involves leveraging the distributed ledger technology to enhance the security, transparency, and efficiency of data exchange between trading partners. Identify Use Cases: Transaction Types: Determine which types of EDI transactions could benefit from blockchain integration. Common use cases include purchase orders, invoices, shipping notices, and payments. Choose a Blockchain Platform: Select a Suitable Blockchain: Choose a blockchain platform that aligns with your business requirements. Consider factors such as permissioning (public or private), consensus mechanism, scalability, and smart contract capabilities. Ethereum, Hyperledger Fabric, and Corda are popular choices.

Blockchain has a potential to replace some messaging mechanisms where instant message are needed. For an example, in cases of 3PL and 4PL where timing of message are of utmost importance. When the all the logistic parties are in same network then blockchain can be leveraged to provide instant messages which would follow forwards steps. These are such crucial when there are rush orders or deliveries are to be coordinated. In this scenario, all allowed parties are in same network this data privacy and governance becomes easy. This way we need not use API (which is non-standard) which is being promoted for real time message system.

There are multiple EDI standards in use like TRADACOMS, GS1, X12. They have been around for more than 3 decades, thus lot of legacy infrastructure exists with an enterprise. Blockchain is also being adopted as a transformational technology. Also, as there are multiple EDI standards, so there are many Blockchain architectures. Thus till the enterprise fully transform (which may take another decade), EDI has to be integrated with Blockchain technology. There are multiple approaches being adopted, the two successful ones are EEA (Enterprise Ethereum Alliance) who use permissioned Ethereum blockchain (Besu & Quorum) and Baseline uses public Ethereum network in conjunction with ZKP (Zero Knowledge Proofs). Both are open source.

Blockchain offers transformative solutions for EDI. It ensures tamper-proof security through its immutable design, reducing fraud risks. Traditional EDI incurs costs via intermediaries; blockchain enables cost-efficient peer-to-peer transactions. It also fosters standardization across protocols, promoting seamless data exchanges. With real-time recording, blockchain facilitates instantaneous transaction tracking. Smart contracts automate processes, minimizing manual intervention. Unlike the siloed nature of typical EDI, blockchain ensures a universal data flow. Its time-stamped, sequential recording simplifies auditing. Decentralization reduces vulnerabilities seen in centralized EDI.

Using blockchain for EDI, can be a big gamechanger and eleminates the gatekeepers of VAN (Value Added Networks). Here, Baseline Protocol, outshines all other strategies, which uses public Ethereum Network with Zero Knowledge Proof. The messages which can have any format, including EDI, are shared point to point via an open source infrastructure Nats.io which Ethereum is used for sequensing and checkpointing the message flow, without revealing any useful data over the public network. The enterprises can communicate directly with their counterparies, integrating their diverse ERP via baseline open protocol stack. The gatekeeps are disintermediated, while enhancing the data privacy and security. Legacy EDI can coexist, till fully replaced.

Great topic, EDI is so much needed in education-social services integration or collaboration. What type of staff background could help achieve this? Like what education and experience background is the right staff for integrating blockchain into EDI? I am very interested in that.

Blockchain's integration with EDI offers multiple benefits. Its immutable nature ensures unparalleled security, thwarting potential data tampering. By removing intermediaries like VANs, transaction costs drop. Consistent data exchange is fostered through standardization across protocols. Real-time tracking of EDI transactions is possible, with each entry instantly verifiable. Smart contracts facilitate automation, enhancing efficiency. The technology counters the problem of data silos, promoting comprehensive data sharing. Every blockchain transaction is time-stamped, simplifying audits. Its decentralized structure offers resilience against failures and breaches. This model maintains data integrity and expedites dispute resolutions.

The initial challenges one had to deal with is infrastructure and user training. You also need to apply more governance related to your data and security. If some organisations is setup to b2b and b2c then for obvious reason their blockchain network they would like to keep it isolated. But these again increases their cost, system performance which need to review time to time.

Main challenge comes from the middle managers' reluctance to learn new technology. They have settled down into their comfortzone and used to the old way of doing things. Also, there is a paradigm shift in the business and technology architecture. Even may CIOs I have met are unwilling to tredge into this unfamiliar zone, all the while acknowleding that they need to keep pace with new age technology.

User training depends on how user friendly built the infrastructure. Most important is data governance and buy-in from those who could benefit from EDI, not everyone wants that because technology is seem as scary and and additional thing for the whole agency. But EDI will be more acceptable to those who sees the benefit of it. Chaos is always come first in people's mind with any tool adoption as with any organization change.

The path of least resistance, is to create a workgroup with CIO leading and all other stakeholding departments like finance and supplychain managers in the group. They need to be assured that the current ERP will be as is from user prespective, while making the backend integration as transparent as possible. Also, the trading partners needs to be onboarded, a cross enterprise adoption community needs to be created. Using Open Protocol like Baseline Protocol reduces the friction both in term of technology adoption as well as business process changes. EDI messages also need not change, just re-routed, reducing cost of doing business.

Make the technology decision early on, keeping your trading partners in loop. A broad consensus on adoption and transformation roadmap needs to be agreed upon. Then join the blockchain community, say either EEA (Enterprise Ethereum Alliance) or Baseline. In my opinion, Baseling Protocol is much cheaper and secure to run.