What is a B2B/EDI VAN?

On any given day, businesses exchange all types of data and documents with other businesses: a purchase order that creates an agreement for a sale, an invoice as a record and request for payment, and the list goes on.

Considering the sensitive and critical nature of these B2B communications, this information exchange needs to take place in a reliable, secure environment. It can take the form of point-to-point EDI flows, or it might look like a B2B/EDI VAN. Both are widely used, and both fulfil those purposes for different use cases.

The meaning of a B2B/EDI VAN

A B2B/EDI value-added network (VAN) is a private network that enables businesses to securely exchange data and documents with their business partners.

In traditional point-to-point EDI connections, some level of onboarding and configuration are required for each individual partner. Many companies need that level of agility for their different relationships.

But in some cases, when partners are already pre-connected to an integration network, it makes sense to re-use this connectivity.

With a value-added network, these businesses can send communications to and from a central virtual mailbox that is hosted by the B2B/EDI VAN provider, with encryption leveraged to support safe data transfers. They are all doing business and communicating in a closed, common network.

EDI flows — and in turn EDI VANs — remain the norm for many enterprises. VANs have existed for a long time, and some organizations require their vendors to exchange business data and documents via particular proprietary VANs.

Think, for example, of a major grocer with hundreds of partners, which may require its suppliers to only use a specific VAN for EDI communication.

That said, cloud-based APIs are gaining traction for B2B communications, and forward-thinking organizations seek to integrate APIs into their existing processes to bridge between legacy systems and new SaaS systems without impacting operations.

With more connection options, businesses have more agility to meet new industry protocols and formats as well as support innovation and new integrations.

The result, however, is that businesses may find themselves in a situation where they must deal with various – and often disjointed – processes: point-to-point EDI, multiple VANs, various API vendors…

The value a VAN delivers in a B2B environment

1. Peace of mind with regards to data security

One study on supply chain cyber risk management found that 98% of firms surveyed have been negatively impacted by a cybersecurity breach that occurred in their supply chain. Respondents cited pain points like meeting regulatory requirements and working with suppliers to improve their security.

And a McKinsey report notes that supply chain disruptions cost the average organization 42% of one year’s profits over the course of a decade. Considering the negative impact this can have on business-partner relationships, it’s critical for organizations to mitigate the risk of cybersecurity threats.

A modern B2B/EDI value-added network is equipped with advanced security measures like data encryption, password protection, and digital signature verification. These extra layers of protection help keep the assets of your business and your partners secure.

2. Faster partner onboarding

With point-to-point EDI connections, a customer and supplier must negotiate and agree upon communication protocols before exchanging data. This process can be time-consuming and complex as they exchange credentials, set up connectivity, then test the connection. And there are many contexts where this may be precisely the level of customization that is needed.

But an EDI VAN allows trading partners to each keep their preferred communication protocols (AS2, AS4, SFTP, RosettaNet RNIF, etc.) for exchanging electronic documents, meaning partnerships become as simple as plugging in an address.

And because VANs provide pre-established connections to a large number of trading partners, a newcomer can easily connect with existing partners upon joining the network.

3. Maximized efficiency in B2B communications

The switch from paper-based business transactions to EDI is deeply rooted in the goal to boost productivity and, consequently, enable scalability. With a modern VAN as the go-between to facilitate business transactions, organizations have access to advanced automation capabilities that further improve business productivity.

With agreed-upon standards in place, a B2B/EDI VAN acts as a protocol mediation layer that lets businesses “talk” to one another more effectively. For example, if one trading partner is using SFTP to send EDI documents and another is using AS2, the VAN can convert the documents from SFTP to AS2 (or vice versa) so that they can be transmitted over the desired protocol.

Alongside this standardization, a value-added network also boasts features like automated notification of successful data/document delivery, which helps keep businesses informed about transaction statuses without added manual effort.

It’s also worth noting that today’s B2B/EDI VANs are highly reliable, offering connectivity that stretches across a large network. Fewer delays in completing business transactions translates into fewer costs and better partnerships.

4. Improved quality of the business data shared

To be labeled a success, an EDI transaction needs to preserve the integrity of the data shared. Because a B2B/EDI VAN works as an intermediary, receiving electronic documents in one communication protocol and then converting them into the desired protocol for the recipient, the potential for errors is reduced.

One of the other benefits of a B2B/EDI VAN is that it generally includes checks and balances to automatically flag errors tied to incoming and outgoing transactions — and signal adjustments that need to be made.

While eliminating manual error checks saves you time and costs, this automation also improves the accuracy of data delivered, and in doing so fosters better business-partner relationships.

Why consider a B2B/EDI VAN

EDI has been a backbone of supply chain management for many years. You can see its use in the delivery schedules that manufacturers send to distributors and retailers, the shipping notices distributors and retailers send to suppliers and customers, and the custom declarations a third-party logistics provider sends on behalf of customers.

In business operations where EDI communications play such a critical role, a B2B/EDI VAN is a worthwhile investment — and in some cases, larger organizations (“hubs”) may even mandate its use by their smaller suppliers and partners (“spokes”).

By providing a private, secure environment to safely, quickly, and successfully transmit data and documents, a B2B/EDI VAN ultimately supports better business outcomes.

The Axway difference

In an ideal world, managing EDI networks is a flexible, efficient process that enables consolidation and delivers peace of mind. It’s these goals that served as a catalyst for introducing Axway Business Network, which offers modern API-driven VAN capabilities, to the Axway B2B Integration Platform.

With a single point of management for point-to-point EDI, API, e-invoicing, and multiple VAN integration via Axway Business Network, businesses not only save costs with the Axway B2B Integration Platform but also boost operational efficiency.

Access to best-in-class VAN capabilities — a list that includes self-service, API configuration, and a visibility portal — and interconnection to hundreds of worldwide VANs further supports productivity.

At the same time, a single VAN certificate removes the step of having to take care of firewall changes or perform technical connection tests on individual partners.

Axway’s B2B platform provides the best of both worlds, giving you the flexibility to choose either point-to-point or VAN connection for a particular partner onboarding, and we can offer business expertise on when it’s better to use VAN or not.

Axway is proud to help our customers enable unique, consistent B2B integration experiences — all while helping them lower costs and remain fully compliant.