An EDI VAN is a secure network where EDI documents can be exchanged between business partners.
EDI documents are sent and received in a specified format which has services such as mail notifications, authentication and validation of the message. These networks provide full tracking and recording for auditing purposes, together with backup and recovery, mapping and compliance.
Each partner specifies the exact format they require for documents to be exchanged and provides the business data rules that must be followed. This is usually based on industry, and the organization’s specific requirements.
Direct EDI in the form of File Transfer Protocol (FTP), SFTP and FTPS allows business partners to connect directly as well as via service providers.
This is a more economical way to transact business compared to using a VAN, as companies can connect to trading partners without incurring costly per document fees.
This form of communication is often requested by some companies as it is a faster way to communicate and the transaction is seen as closer to real time.
This, coupled with less costs involved, makes EDI via SFTP or FTPS one of the most commonly used methods of carrying out EDI transactions.