When it comes to Electronic Data Interchange (EDI), choosing the right connection method is crucial for efficiency, reliability and security. While many businesses still use Secure File Transfer Protocol (SFTP/FTP) for exchanging EDI messages, this method has several significant drawbacks that make it a suboptimal choice compared to modern alternatives.
Low Reliability
FTP-based file transfers are inherently less reliable than direct API connections or standardized EDI transport methods like AS2. Since FTP does not provide built-in acknowledgments, businesses have no way of verifying if a document was received successfully unless they set up additional monitoring mechanisms. This lack of guaranteed delivery increases the risk of missing or duplicated transactions.
Poor Document Traceability
One of the most critical requirements in EDI is the ability to track the entire document lifecycle – from creation and transmission to receipt and processing. FTP does not inherently provide real-time status updates, making it difficult to troubleshoot delays or confirm whether a document has been processed by the recipient’s system.
Lack of Error Handling
Modern EDI transfer methods, such as REST API or AS2, allow for immediate error detection and correction. In contrast, FTP connections operate in a more passive manner – once a file is sent, there is no direct feedback mechanism. If an error occurs, businesses often find out too late, leading to operational disruptions and financial losses.
Security Risks
Even with the “secure” version (SFTP), FTP remains an outdated technology with known security limitations. It lacks end-to-end encryption and authentication mechanisms that modern protocols like AS2 offer. This makes FTP more vulnerable to cyber threats, data breaches, and unauthorized access, putting sensitive business transactions at risk.
Scalability and Maintenance Challenges
FTP is not designed to scale efficiently for large businesses handling high volumes of transactions. As data exchange needs grow, FTP can become a bottleneck, requiring manual intervention and additional infrastructure upgrades to maintain performance.
Additionally, ongoing maintenance and management of FTP servers require dedicated resources and technical expertise. Companies must monitor server health, manage file storage, implement backup procedures, and troubleshoot transfer failures – all of which increase operational costs. In contrast, modern EDI solutions offer automated, cloud-based services that scale effortlessly with business needs.
Interoperability Issues
Unlike standard EDI solutions, FTP requires custom configurations to work with different partners and ERP systems. There is no uniform way of implementing FTP across businesses, leading to compatibility issues and increased maintenance efforts.
Limited Monitoring and Automation
Unlike API-based integrations that offer real-time visibility, FTP lacks centralized monitoring capabilities. If a file transfer fails, businesses often need manual intervention to detect and resolve the issue. Additionally, FTP does not support automated validation of document formats, increasing the risk of processing errors.
What’s the Better Alternative?
For businesses seeking a more reliable, scalable, and secure EDI connection, standardized EDI channels such as:
- Telema REST API – Best for real-time, secure, and automated document exchange
- Telema Gateway – A robust alternative to the REST API, offering high reliability and security, though without real-time status tracking
- AS2 – Widely used for secure EDI transactions, especially in Europe
These options provide better error handling, enhanced security, and greater scalability, ensuring seamless EDI operations with lower maintenance costs. While Telema Gateway does not support real-time status tracking, it remains a strong and efficient choice for businesses seeking a high-performance EDI solution.
Conclusion
FTP may seem like a low-cost and easy-to-implement solution, but its lack of reliability, security risks, and high maintenance costs make it inefficient. For companies already using an EDI operator, maintaining an additional FTP channel adds complexity, increases costs, and dilutes focus. Instead of managing multiple systems, businesses should consolidate into a single, standardized EDI channel – like REST API or AS2 – for better reliability, security, and scalability.
If your company still relies on FTP, it’s time to transition to a modern, cost-effective EDI solution and focus on business growth, not IT maintenance.
Contact us to change your FTP channel to a more reliable solution.