Internet EDI vs. VAN EDI
Internet EDI vs. VAN EDIEarly on, VANs served as an "electronic post office" for buyers and suppliers who needed to exchange data. For example, Company A could send an electronic purchase order to the VAN and Company B could go to the VAN to pick it up. If company B claimed it did not receive the P.O., the VAN would serve as a 3rd party intermediary and would validate whether the P.O. had been picked up or not. That is the type of "value-add" these networks provided.
Despite the benefits, VAN EDI had limited adoption because it was cost-prohibitive for most companies to deploy. Before Internet EDI became available, approximately 80% of the suppliers in any given supply chain were transacting with their customers manually via fax, telephone and snail mail because they could not afford the significant investment required for VAN EDI. This resulted in inefficiencies throughout the supply chain including: lost or mis-keyed P.O.s, late invoices, out-of-stocks, etc.
With the advent of secure Internet EDI, a better and more affordable solution, companies of every size are now able to transact electronically with their trading partners. And former VAN services such as "message disposition notifications" are built right into the software products.
EDI transactions cost less than 10% of the cost of paper transactions.
To understand the cost savings afforded by Internet EDI vs. VANs, try our Value Calculator.
Here is a quick summary of Internet EDI Benefits: