Communication and understanding between business partners is a crucial part of commerce. Today’s technologies have made it easier than ever to be on the same page as your trading partners when making transactions and organizing business details. Using a VAN or Value Added Network for EDI, or Electronic Data Interchange, is one of the ways companies can help their business partners understand crucial details and information, so that deals can happen without any information-related setbacks.
The main purpose of a VAN is to allow companies to exchange messages in a format that they can understand and that is compatible with their systems. This means translating one company’s messages into the format another company uses to process information and vice versa. VANs make this process very quick and automated. In addition to this, many VANs also provide other benefits, such as security and encryption, data backup and recovery, checking for errors, and network performance optimization.
You might be wondering what the difference is between using a VAN and using other EDI methods. VANs are private networks, and companies outsource management of their correspondence and EDI operations to them. In contrast, direct EDI involves establishing a direct connection between two companies. Direct EDI is generally much more difficult to manage, because it requires you to make sure your EDI protocols are compatible with all of your business partners. VANs cost more than direct EDI, but they may be a worthwhile investment, especially now that many companies are exclusively using VANs for EDI.