As a professional who has helped over 1,000 companies, during my career, to implement EDI with Dynamics as their back office, I often get asked “What method of EDI communication is best for MY company?” Since there are only two main methods of communications, an EDI Value added network (VAN) provider or Direct EDI, my response is typically the same. 20 years ago VAN’s were the only choice; however, most major trading partners support direct communications. Fortunately, the decision for most companies can be straightforward and should be based entirely on business requirements, such as volume of documents, IT support and services being provided by your EDI provider.
Differentiating Direct EDI vs VAN Based EDI
Direct EDI, such as File Transfer Protocol (FTP) or standards such as AS2, establishes a secure line between two business partners. With minimal software and an internet connection, companies can now connect to their trading partner base with no per document fees. Certain industries or partners may require or highly suggest this form of communication such as Wal-Mart, Lowes, Cardinal Health, etc. because it is closer to real time communications, and avoids costly per document fees for both parties.
An EDI VAN is a secure outsourced network where EDI documents can be exchanged between business partners. Your company is provided with a ‘mailbox’ from which EDI documents are sent and received, similar to traditional paper based mail (snail mail). The “value added” part of the mailbox are often services like mail notifications, inspect, authentication, and validating the message. Messages are tracked and recorded for auditing purposes, as well as other services available through VANs, such as backup and recovery, mapping, compliance and more.