EDI X12 the Interface of the Future
Tuesday, April 10, 2012, 8:00 AM
EDI is perhaps making a rather forward attempt, be it at a crawl, toward mainstream use. For the present time, EDI fails to be commonplace in mass, however the government has started to utilize EDI to some degree. Alongside quasi-governmental agencies, the government at large has begun to implement and meet particular EDI X12 standards, spearheading this new frontier.
Further, a push to compel those that wish to do business with government agencies to embrace EDI X12 standards has been made. Exempli grata, Freddie Mac and the NMA will no longer accept mortgage backed securities unless they are submitted with proper EDI X12 formatting beginning September of 2012. The wide reach and intertwined nature of Federal contracts means that by regulating the nature of business governmental agencies will accept, businesses will have to make adjustments if they wish to remain competitive and function alongside governmental agencies.
While currently a mere 10% of the mortgage banking sector meets EDI X12 standards, the percentage will undoubtedly grow at a rapid place. Still, the effect on a more grassroots level will be nominal for some time. X12 has not yet even finished the guideline implementation phase so there is still substantial ground to cover.
Yet another stumbling block to EDI X12 is that it lacks clear industry support. There is a large resistance, that has been addressed by the assertion universal protocol will be more economically sound for all involved. For Profit corporations tend to not yield easily to such banter and universal agreement is a difficult route to insist upon.
It remains true that an immense amount of resources and time are expended in the attempt to resolve compatibility issues, enabling a unmarred connection with clients systems. However, the success of such projects does nothing to compel a move toward a “better” solution. Furthermore, for those who have not reached compatibility, ushering in a universal system will level the playing field in a way that those with compatible interfaces currently do not have to contend with. In the spirit of capitalism a great deal of the industry is understandable resistant.
The standout character of EDI X12 is that traditionally the approach taken was one of translation. This greatly simplified the process, allowing diverse language on an individual level while maintaining a universal language for interface. With the current nature of the beast, standards are, for the most part, voluntary. Voluntary standards enable flexibility of utilization where X12 will be most advantageous to the user.
Rather vocal opponents of EDI X12 standards main gripe is that vendors themselves should have a controlling voice in all adaptation and development standards, rather than being inclined to submit to outside developmental choices. Arguably at various levels of contact such as insurance claims, credit reporting et cetera there are unique aspects and troubleshooting issues that are varied from those of mortgage lenders; as such X12 is inadequate.
Yet in the end most agree that there must be a universal interface. Overall it can not be denied that X12 is a usable and proficient system. Those conforming to the “new wave” assert that EDI X12 is the only viable option.