EDI Direct

EDI Direct Connect Method

EDI direct connecting to trading partners means bypassing the third-party VAN and exchanging data directly with the trading partner. In the recent years there has been a lot of drive in the industry to switch from VANs to direct connect. There are many reasons why the volume of direct connections has been growing and here are some of them:

  • Wal-Mart: Wal-Mart has always been a pioneer and a leader in EDI industry initiatives. They have always mandated that their domestic suppliers connect to Wal-Mart directly bypassing the VAN. Before, companies had to connect to Wal-Mart directly using a phone modem, and most EDI communication software adapters came with a built-in dial-up-to-Wal-Mart script. With EDI over the Internet protocols (AS1, AS2, AS3), being standardized and certified, Wal-Mart made the push for their suppliers to get off the modem and use AS2. After Wal-Mart’s initiative a lot of other hub size companies started supporting AS2.
  • EDI Over The Internet Made Easy: Companies like NuBridges (previously isoft), Inovis (previously IPNET), Cyclone, and others have made really solid, reliable, and user-friendly Internet EDI communications software to make it easy for companies to manage their own communications and transmit data directly.
  • EDI Service Providers: EDI service providers make EDI useful for most small to medium size businesses via Web-Based or PC Desktop EDI software. Over the years these service providers have become very sophisticated and have gained the ability to support, automate and integrate EDI business transactions. Since most EDI service bureaus are not VANs they had to find a way to cut VAN costs as well. These service providers urged the large size retail hubs to connect to them directly and by-pass the VAN without charging the retailers. This was a win-win situation for the retailer, the service provider and the small to medium size supplier. The retailer and the EDI service provider are no longer paying VAN fees. The retailer’s initiative to get vendors to switch to a direct connect method became much easier, in some cases hundreds of their suppliers became direct connect trading partners in a very short period of time. The supplier benefited by paying the EDI service providers less expensive EDI transaction charges because the EDI Service provider no longer had to eat the VAN costs.

To learn more about EDI and become a certified  EDI Professional please visit our course schedule page.

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