Tight IT budgets make it tough for managers to stay at the cutting edge of technology, but in one area they may not have to bother. For now at least, electronic data interchange (EDI), the old system for exchanging business documents electronically, is at least as useful as its likely successor and cheaper as well. Over the next five years, businesses would do well to optimize their old systems while also preparing themselves for the new ones.

EDI, the workhorse of electronic commerce for more than 20 years, lets businesses exchange purchase orders, invoices, shipping information, and other commercial documents over private electronic networks or, increasingly, the Internet. In 2001 more than $2 trillion in business transactions passed through EDI networks, and as many as 55 percent of all large and midsize companies in North America used them.

For several years, the Extensible Markup Language (XML) has been pitched as a more flexible and less expensive successor to EDI. XML was originally designed to make it possible for HTML World Wide Web pages to include additional information. Its development gave rise to the idea that the technology could enable trading partners to transfer and manipulate more complex data than...