Information is one among your corporation’s most beneficial commodities, however presents a singular sequence of challenges. Far too typically, we gather and retailer much more knowledge than we will realistically use or successfully handle. That is often known 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 easy methods to combine your a number of knowledge sources right into a coherent and helpful entire 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 present, and every affords a sequence of advantages and disadvantages relying in your wants.
For instance, API integration tends to be greatest for up-to-the-minute, particular, and discrete knowledge pulls, whereas flat file switch excels at batch-transferring better portions of information. To grasp which knowledge integration works greatest on your group, although, you’ll want to know the numerous nuances separating the 2.
What’s Flat File Integration?
A flat file is a single file, often in a CSV or TXT format, that aggregates and consolidates a database or knowledge set. For those who’ve ever poked round your ERP’s system information, you may need discovered TXT or CSV information that, when opened, seemed 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.
Once 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 the whole 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 must 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 information right into a flat file, you’ll often use one among 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 completed whereas offline however isn’t at all times as safe as some protocols require.
When digital safety necessities dictate, you too can use Safe FTP, or SFTP. SFTP acts alongside the identical pathways as a typical FTP however leverages encryption to guard the information whereas transferring. SFTP is normal when there’s private or delicate data in danger, whether or not HIPAA, monetary accounts, or shopper/buyer knowledge.
What’s API Integration?
To grasp how API integration works, we have to know what an API is and the way it operates. API stands for Utility 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 via a cloud-based knowledge hyperlink.
Utilizing the banking instance once more, while you join private financial institution accounts at present, you’ll typically be requested to make use of a service like Plaid to authenticate possession somewhat than legacy strategies of manually inputting account and routing numbers after which ready for take a look at deposits to undergo for validation. In these instances, Plaid and related purposes use APIs to instantly join together with your banking establishment and validate possession with little ready.
How Does API Integration Work?
Once you use API integration, you create a direct digital hyperlink to share particular knowledge somewhat 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” features. 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 rapid knowledge transferability with out the shopper needing coding expertise. API integration is the precise mechanism and infrastructure driving the switch behind the scenes.
For those who’re a sufficiently massive group in search of 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 best 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 commonest use case classes:
FTP vs. API: Information Complexity
Flat information will probably be enough in case you’re managing a handful of primary transactions or person logs. However as quickly as you begin juggling authentication necessities, safety wants past SFTP encryption, and usually extra advanced knowledge necessities, API is your greatest wager. 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 person. Flat information, although, are simply readable and editable with normal file readers like Excel and slightly 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 trade. Winner: APIs
Flat File vs. API: Usability
For those who’re merely utilizing API via a well-developed person interface, it’s so simple as most app or software program interactions. If it’s a must to peek under the hood, although, count on to stroll away bewildered until you could have deep expertise in programming and coding. Whereas FTP knowledge trade has a steeper studying curve, the tech is sufficiently primary sufficient to let anybody execute the actions with slightly coaching. Winner: Tie
SFTP vs. API: Ecosystem Integration
APIs are capable of tie numerous platforms and software program companies collectively – offered they provide API integration. On the flip aspect, flat file knowledge trade via 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 hundreds occurring concurrently – however the third-party API leveraged would possibly cap utilization at a sure variety of API interactions (known as API calls) day by day or would possibly cost per name. This could show prohibitive in case you count on to trade massive portions of information day by day. Flat information can deal with pretty massive volumes of information, with switch pace dictated by {hardware} capabilities greater than another issue. Winner: Tie
API vs. FTP: Latency
Since flat information mixture present knowledge, they’re uploaded or processed in batches alongside a recurring or iterative schedule. APIs function in (close to) real-time, with price ceilings in case your finances can’t help fixed API calls. API integration may even supply real-time messaging support – if that’s one thing your advertising technique helps. On this case, it will depend on whether or not you worth price 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 mixture, errors often must be manually investigated and glued. APIs often have automated error identification and notification via the person interface. Winner: APIs
SFTP vs. API: Safety
When used correctly, SFTP is safe sufficient for many makes use of. However, general, API affords better entry to broad-threat safety instruments like authorization and authentication necessities. Winner: API
When to Combine by way of API and When to Use Flat-File
Despite the fact that 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?” will depend on your particular wants. For instance, one accounting crew growing knowledge integration for automated accounts payable techniques would possibly prioritize money movement administration and diligent cost processes – on this case, they’d seemingly be effective batching invoices via flat file FTP on a recurring foundation someplace inside a net-30 window. Then again, if the crew’s vendors invoice via a various sequence of software program platforms, connecting their accounting software program system to distributors via API integration is probably going greatest.
Listed below are some further issues to juggle when figuring out whether or not file-based integration is best than API integration for your corporation:
How is the Information Used?
For those who’re posting transactions, particularly a big amount of them, regularly with out the necessity for fixed and rapid knowledge trade, then flat file integration is the most suitable choice. That is notably true in case your knowledge trade necessities are solely back-office mechanisms and never customer-facing. Financial institution prospects don’t care how the transactions put up by way of flat file add, however they’d care in the event that they needed to work together with a CSV file each time they needed 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 mess of {hardware} stacks and platforms, then each options might help mixture 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 pace is inherently restricted by {hardware}. And, although you may execute FTP offline domestically, this isn’t an possibility for distant switch. APIs, however, are cloud-based and higher suited to widespread knowledge trade throughout a number of geographic places.
How Deep is Your Information Set?
For those who’re attempting to juggle huge knowledge portions that span a number of choices, like a full vary of AP automation inputs, then a flat file is often 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 better person enter to supply the same amount of information that’s exchanged in a single session by way of a flat file.
Conclusion
Bear 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 instances work greatest with every methodology drives your decision-making – so working with knowledge professionals to information your strategic knowledge objectives is often a secure wager.
