What is a Value-Added Network (VAN)?
A value-added network, or VAN, is a hosted private service that offers businesses a safe means of exchanging and sending data with their counterparties. One popular method for enabling electronic data exchange (EDI) between businesses was via value-added networks. With the introduction of secure email on the Internet, VANs had to compete for customers by providing a more comprehensive range of services, including management reports, secure email, and message encryption.
A value-added network streamlines the communications process by lowering the number of partners an organization must connect with. The VAN is a middleman between corporate partners exchanging proprietary or standards-based data. To ensure that the shared data is formatted accurately and checked before it is delivered to the next party, VANs are configured with audit capabilities. Turnkey communications lines or added-value networks are other names for VANs.
How a Value-Added Network (VAN) Works
Industrial consortiums, telecommunications firms, and major corporations often use value-added networks for effective supply chain management with their suppliers. When a business delivers a transaction to a VAN, the VAN often puts it in the recipient’s inbox. This is how VANs typically work. After contacting the VAN, the recipient picks up the transaction and sends one of its own.
Except for using unstructured language instead of standardized structured data, the system is comparable to email.
In the Internet Age, VANs
The popularity of VANs has decreased due to the widespread use of the Internet, primarily because of financial concerns. Moving data over the Internet is often more economical than paying the minimum monthly costs and per-character rates included in most VAN contracts. VANs have resisted the Internet’s assault by concentrating on specific industry verticals, such as manufacturing, retail, and healthcare. VANs are a genuine value-added solution for many businesses because of their particular data integrity and security requirements.
By enabling the business to connect with fewer partners, VANs streamline the communications process.
An enterprise resource planning (ERP) suite, for example, is one kind of data that may be structured to be immediately imported into the recipient organization’s software program via the VAN. This direct communication between the two businesses speeds up trade while lowering the possibility of human mistakes arising from laborious data entry.
Additionally, visibility features that display the data delivery status and specific associated processes may be provided by VANs, enabling businesses to better coordinate dependent actions via the system instead of corresponding via phone calls and emails. Using a VAN saves money by facilitating information interchange at a lower cost than employing human data entry workers, and it is more accurate and efficient.
Like other pre-Internet technologies, VANs have had to reimagine themselves to remain relevant. These days, VANs provide services for message authentication, EDI exchange and retrieval, and transaction archiving that go above and beyond mailboxes. By providing EDI data backups automatically, flexible access to that data via secure online portals, and limitless data pricing packages, modern VANs provide value for enterprises.
Conclusion
- Value-added networks are often used to exchange electronic data between businesses.
- With fewer parties involved in contact, VANs simplify the communications process.
- VANs are crucial for supply chain management.
