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Body of Knowledge (BoK)
VANS/Portals
In B2B (business-to-business) commerce, a value-added network (VAN) is a third-party service provider that helps facilitate electronic data interchange (EDI) transactions between trading partners. A VAN acts as a middleman, providing a secure and reliable communication channel between businesses that need to exchange electronic documents such as purchase orders, invoices, and other business-related data.
VANs can provide a range of services, including message translation, data mapping, data transformation, message routing, message tracking, and security and compliance services. By using a VAN, businesses can simplify their EDI processes, reduce costs, and improve the efficiency and accuracy of their trading partner communications.
What is a VAN?
You could view a VAN as being an electronic post office. Like how you can drop a letter in the outbound mail-slot at your local post office, and the postal service determines where the letter should go and tracks its delivery, a VAN does a similar function with your electronic documents.
A company deposits outgoing documents into their “outbound mailbox”. The VAN looks at the sender and the receiver in the data you deposit. It determines where to route the data based upon the TP Relationship (sender / receiver IDs) and routes the data to either the receiver’s mailbox, if on the same VAN, or through a “3rd party interconnect” to the receiver’s VAN.
Why are VANs still used today?
Most EDI traffic is still exchanged thru a VAN. Why?
I believe it comes down to a matter of cost and efficiency. Direct Connections, like AS2, are generally expensive to purchase and difficult to setup and maintain. For small and medium sized organizations, VANs provide a simple and cost-effective solution to connecting with trading partners. Most VANs support multiple connectivity protocols, including FTP, AS2, AS3, etc., making it easy to exchange data with the VAN. The VAN makes the unique requirements of connecting with your trading partner invisible to you.
Virtually all VANs use a form of volume-based pricing. The majority charge on the volume of data going thru your account, usually measured in Kilo Characters (KCs). A few charges on the document traffic.
Most VANs support a tiered pricing mode. As you hit a certain tier, the per KC charge for incremental volume or incremental documents drops. Essentially, the VAN usage actually gets incrementally cheaper the more volume you have.
VANs have also begun offering what is often referred to as “Managed Services”. Within the industry, it is called “inline translation”, because it happens internal to the VAN infrastructure, inline as data moves between mailboxes.
For more information, download the whitepaper:
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