What Are EDI Service Providers?
EDI Service Providers
EDI has long been considered the official business language. Without it, efficient communication between organizations would be impossible. EDI replaces cumbersome and error-prone paper processes to enable automated data exchange between trading partners. Companies can use it to send a wide range of documents including purchase orders, invoices, shipping notices and commission sales reports.
Unlike the Internet, which is a global network that anyone can use, EDI networks are privately maintained and controlled by VAN service providers who have contractual agreements with trading partners to provide connectivity over private connections. EDI is a series of protocols and standards for communicating electronic data that must be agreed upon by trading partners. This ensures that all parties can interpret the document and that each party is able to execute required actions in response to the received document.
There are many EDI standards, some of which are universal and others specific to industries or regions. Some common EDI standards include ANSI X12, EDIFACT and Tradacoms. In addition to edi van service providers formats, a full-featured EDI solution must support a wide variety of B2B communication standards such as web services, XML and JSON files for connecting to a wide array of trading partner systems. EDI solutions must also be fully integrated with business systems, such as accounting and shipping services, ERPs and 3PLs to automate and integrate all aspects of supply chain management.
The best EDI service providers understand the complexity of managing multiple EDI systems. They can help reduce operational costs, eliminate compliance violations and improve customer satisfaction with a centralized, robust B2B network that supports multiple trading partners. They can assimilate EDI and the data it transmits into internal business systems, such as an ERP or WMS, to eliminate manual input of EDI documents and speed up processes.
What Are EDI Service Providers?
In contrast, if a company deploys an EDI system with each of its trading partners through a separate VAN service provider, it may find itself with a tangled, muddled EDI ecosystem. Each VAN provider requires a contract to manage, resources to manage and maintain, and multiple connections to keep up. Managing all of these different systems can be complex and time consuming. Moreover, if a VAN service provider is ever acquired by another firm, a company could lose access to its data and connection to all of its trading partners.
Choosing the right EDI service provider can make all the difference in onboarding new business partners, eliminating costly errors and improving productivity. An experienced EDI service provider will yield significant cost savings, speed up onboarding for business partners and deliver real-time EDI visibility to elevate strategic decision-making.
The EDI VAN or Value-Added Network (VAN) is a private network provider that is hired by a company to enable reliable EDI communication connectivity with their trading community. It essentially functions like an electronic mail server, receiving EDI documents in different formats from trading partners and then translating those into the correct format for the receiver, thus eliminating the need to manually send and receive each document in its original form.