Information is considered one of your online business’s most dear commodities, however presents a singular collection of challenges. Far too typically, we gather and retailer way more knowledge than we will realistically use or successfully handle. That is normally referred to as stovepiping and describes when a knowledge silo operates independently of the entire ecosystem or is in any other case segregated.
To that finish, understanding the best way to combine your a number of knowledge sources right into a coherent and helpful complete is step one to bettering operational effectivity and utilizing that knowledge to its full utility. Flat file integration and API integration are the first technique of doing so for companies at this time, and every presents a collection of advantages and disadvantages relying in your wants.
For instance, API integration tends to be finest for up-to-the-minute, particular, and discrete knowledge pulls, whereas flat file switch excels at batch-transferring larger portions of information. To know which knowledge integration works finest to your group, although, you’ll want to grasp the numerous nuances separating the 2.
What’s Flat File Integration?
A flat file is a single file, normally in a CSV or TXT format, that aggregates and consolidates a database or knowledge set. When you’ve ever poked round your ERP’s system information, you might need discovered TXT or CSV information that, when opened, gave the impression to be strings or traces of characters and textual content with a handful of recognizable key phrases associated to their perform, like shopper account names, interspersed.
If you use flat-file integration, your supply knowledge – like migrating accounts payable data out of your AP automation software program – into your ERP takes that singular file and uploads your complete choice as a batch. For instance, a financial institution would possibly generate a flat file within the morning, consisting of in a single day EFT transfers, and add them to their cost processing platform for execution.
This instance highlights a key distinction when utilizing flat file integration – whereas the method doesn’t should be guide, it’s by no means executed in actual time. As a substitute, at recurring or iterative factors, knowledge will probably be aggregated, standardized right into a flat-file format, after which uploaded to the relevant database or software for storage, use, or execution.
How Does Flat File Integration Work?
After consolidating the info right into a flat file, you’ll normally use considered one of two add strategies relying in your digital safety posture. The primary, file switch protocol (FTP) is a direct knowledge hyperlink between two databases whereby you join the 2, add the file to the receiving server, then obtain it from the identical server to be used. FTP will be achieved whereas offline however isn’t at all times as safe as some protocols require.
When digital safety necessities dictate, you may also use Safe FTP, or SFTP. SFTP acts alongside the identical pathways as a normal FTP however leverages encryption to guard the info whereas transferring. SFTP is customary when there’s private or delicate data in danger, whether or not HIPAA, monetary accounts, or shopper/buyer knowledge.
What’s API Integration?
To know how API integration works, we have to know what an API is and the way it operates. API stands for Software Programming Interface. An API is form of like a digitally touchable substrate upon which a platform or software program operates. APIs let two disparate, in any other case unconnected platforms talk in near-real time by means of a cloud-based knowledge hyperlink.
Utilizing the banking instance once more, whenever you join private financial institution accounts at this time, you’ll typically be requested to make use of a service like Plaid to authenticate possession reasonably than legacy strategies of manually inputting account and routing numbers after which ready for check deposits to undergo for validation. In these circumstances, Plaid and comparable purposes use APIs to immediately join along with your banking establishment and validate possession with little ready.
How Does API Integration Work?
If you use API integration, you create a right away digital hyperlink to share particular knowledge reasonably than create a batch of information for bulk switch as we did in file-based integration. As SaaS instruments dominate the digital ecosystem, APIs are more and more relied upon to run the digital “again workplace” capabilities. For instance, a typical eCommerce retailer would possibly use APIs to attach a myriad of cost strategies, together with bank cards and crypto, to their Stripe account, then use APIs once more to switch transaction data into accounting software program like QuickBooks.
Notice that, on this case, the end-user won’t even remember they’re leveraging API integrations. More and more, these customer-facing purposes simply supply quick knowledge transferability with out the shopper needing coding expertise. API integration is the precise mechanism and infrastructure driving the switch behind the scenes.
When you’re a sufficiently massive group on the lookout for AP-supported API integration platforms, although, you seemingly perceive how API integrations work conceptually and their advantages in comparison with file-based integration.
What’s the Distinction Between Flat File Integration and API?
Weighing flat file FTP vs. API isn’t a cut-and-dry “X is healthier than Y” binary choice. As a substitute, balancing API vs. FTP is a matter of what operational wants drive your decision-making course of and the way you anticipate these wants shifting. Right here’s how they stack up in among the most typical use case classes:
FTP vs. API: Information Complexity
Flat information will probably be ample in case you’re managing a handful of fundamental transactions or consumer logs. However as quickly as you begin juggling authentication necessities, safety wants past SFTP encryption, and usually extra advanced knowledge necessities, API is your finest guess. Winner: APIs
API vs. FTP: Unassisted Readability/Editability
API interactions happen in a deeply advanced digital atmosphere, rendering what’s “below the hood” almost incomprehensible to the lay consumer. Flat information, although, are simply readable and editable with customary file readers like Excel and just a little little bit of expertise or coaching. Winner: Flat information
API vs. Flat File: Information Digestion
When utilizing flat information, every line is digitally parsed, assessed, and processed on a standalone and sequential foundation. APIs supply direct and predetermined knowledge entry change. Winner: APIs
Flat File vs. API: Usability
When you’re merely utilizing API by means of a well-developed consumer interface, it’s so simple as most app or software program interactions. If you need to peek under the hood, although, count on to stroll away bewildered until you have got deep expertise in programming and coding. Whereas FTP knowledge change has a steeper studying curve, the tech is sufficiently fundamental sufficient to let anybody execute the actions with just a little coaching. Winner: Tie
SFTP vs. API: Ecosystem Integration
APIs are capable of tie numerous platforms and software program providers collectively – offered they provide API integration. On the flip facet, flat file knowledge change by means of FTP or SFTP is near-universal between completely different platforms and {hardware}. Winner: Tie
API vs. Flat File: Scale
APIs can deal with huge knowledge masses occurring concurrently – however the third-party API leveraged would possibly cap utilization at a sure variety of API interactions (referred to as API calls) day by day or would possibly cost per name. This could show prohibitive in case you count on to change massive portions of information day by day. Flat information can deal with pretty massive volumes of information, with switch velocity dictated by {hardware} capabilities greater than another issue. Winner: Tie
API vs. FTP: Latency
Since flat information combination present knowledge, they’re uploaded or processed in batches alongside a recurring or iterative schedule. APIs function in (close to) real-time, with value ceilings in case your funds can’t assist fixed API calls. API integration may even supply real-time messaging assist – if that’s one thing your advertising technique helps. On this case, it depends upon whether or not you worth value optimization or timeliness. Winner: It Relies upon
FTP vs. API: Error Administration
Since flat file FTP and SFTP are direct linkages pushed by a single knowledge combination, errors normally should be manually investigated and stuck. APIs normally have automated error identification and notification by means of the consumer interface. Winner: APIs
SFTP vs. API: Safety
When used correctly, SFTP is safe sufficient for many makes use of. However, general, API presents larger entry to broad-threat safety instruments like authorization and authentication necessities. Winner: API
When to Combine through API and When to Use Flat-File
Though we assigned a binary winner/loser to the head-to-head API vs. FTP breakdown, the actual reply to “Is flat file or API integration higher?” depends upon your particular wants. For instance, one accounting crew creating knowledge integration for automated accounts payable methods would possibly prioritize money circulation administration and diligent cost processes – on this case, they’d seemingly be superb batching invoices by means of flat file FTP on a recurring foundation someplace inside a net-30 window. Alternatively, if the crew’s distributors bill by means of a various collection of software program platforms, connecting their accounting software program system to distributors by means of API integration is probably going finest.
Listed here are some further issues to juggle when figuring out whether or not file-based integration is healthier than API integration for your online business:
How is the Information Used?
When you’re posting transactions, particularly a big amount of them, regularly with out the necessity for fixed and quick knowledge change, then flat file integration is the best choice. That is significantly true in case your knowledge change necessities are solely back-office mechanisms and never customer-facing. Financial institution prospects don’t care how the transactions publish through flat file add, however they’d care in the event that they needed to work together with a CSV file at any time when they wished to purchase out of your eCommerce retailer. API is preferable within the latter case and another customer-facing interface with real-time necessities.
If your organization juggles a large number of {hardware} stacks and platforms, then each options might help combination and “un-stove pipe” your knowledge to attract perception and analytics. The caveat, on this case, is that your platforms should supply API integration. In the event that they don’t, then file-based integration is the only real possibility.
Likewise, if latency is a priority and also you want real-time updates, then API is a greater resolution.
How Dispersed is Your Group?
Although FTP can happen over lengthy distances, its velocity is inherently restricted by {hardware}. And, although you’ll be able to execute FTP offline regionally, this isn’t an possibility for distant switch. APIs, then again, are cloud-based and higher suited to widespread knowledge change throughout a number of geographic places.
How Deep is Your Information Set?
When you’re attempting to juggle huge knowledge portions that span a number of alternatives, like a full vary of AP automation inputs, then a flat file is normally higher as a result of the whole thing is aggregated right into a single supply. By comparability, API integration is extra granular and would take larger consumer enter to supply the same amount of information that’s exchanged in a single session through a flat file.
Conclusion
Keep in mind, evaluating flat file vs. API integration isn’t a binary choice. Virtually talking, you’ll seemingly need to leverage each all through the course of your operational initiatives. For instance, your accounting crew would possibly use flat-file integration to handle accounts payable whereas additionally utilizing API integration to synchronize your organization bank cards with accounting software program to handle expense accounts.
However figuring out the distinction between the 2 and which use circumstances work finest with every methodology drives your decision-making – so working with knowledge professionals to information your strategic knowledge objectives is normally a secure guess.