Page 271 - Electronic Commerce

Chapter 5

Instead of connecting directly to each of its trading partners, a company might decide to
use the services of a value-added network. As you learned in Chapter 1, a value-added
network (VAN) is a company that provides communications equipment, software, and skills
needed to receive, store, and forward electronic messages that contain EDI transaction sets. To
use the services of a VAN, a company must install EDI translator software that is compatible
with the VAN. Often, the VAN supplies this software as part of its operating agreement.
To send an EDI transaction set to a trading partner, the VAN customer connects to the
246
VAN using a dedicated telecommunications line and then forwards the EDI-formatted
message to the VAN. The VAN logs the message and delivers it to the trading partner’s
mailbox on the VAN computer. The trading partner then dials in to the VAN and retrieves its
EDI-formatted messages from that mailbox. This approach is called indirect connection EDI
because the trading partners pass messages through the VAN instead of connecting their
computers directly to each other. Figure 5-8 illustrates indirect connection EDI using a VAN.

Warehouse Bank Motor freight carrier
Air freight carrier

Retailer
Spare parts Learning
manufacturer
Cengage

Distributor Finished goods 2015
Wholesaler manufacturer ©
FIGURE 5-8 Indirect connection EDI through a VAN
Companies that provide VAN services include CovalentWorks, OpenText, Kleinschmidt,
and Promethean Software Services. Advantages of using a VAN are as follows:
1. Users need to support only the VAN’s one communications protocol instead
of many possible protocols used by trading partners.
2. The VAN can provide translation between different transaction sets used by
trading partners (for example, the VAN can translate an ASC X12 set into a
UN/EDIFACT set).
3. The VAN can perform automatic compliance checking to ensure that the
transaction set is in the specified EDI format.
4. The VAN records message activity in an audit log. This VAN audit log
becomes an independent record of transactions; this record can be helpful in
resolving disputes between trading partners.

Copyright 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.