​Consolidating VAN suppliers

Some companies trade and interact through EDI very successfully without ever going near a VAN (Value Added Network) provider. Others depend on multiple service providers. Can either of these approaches really be appropriate and sustainable?

Take the ‘DIY’ EDI users. These are often larger companies that were early adopters of EDI; indeed, they may have helped to develop the EDI field. They have knowledge and experience and they can manage their EDI so that it is finely tuned to their particular requirements. But, for many, a problem is looming.

Take, for example, a scenario where a manufacturer manages its global connectivity itself, very successfully, but its core team of half a dozen highly skilled people is beginning to hit retirement age. If the younger generation are only EDI users and not developers, how will these companies cope with inevitable change in the future?

Managed EDI

A VAN is essentially ‘managed EDI’. It started as a way of removing the burden and complexity of managing hundreds or even thousands of individual connections from companies. Does it make sense to take the risk of going it alone? Outsourcing areas where the company does not have, or is unlikely to retain, a core competence makes absolute sense.

What, then, to make of companies who have a raft of different VAN providers? Often these are legacy issues: individual corporate divisions, such as manufacturing and finance, may have gone down very different paths in days when VANs were highly specialised around one function or industry. Additional VANs may have been acquired through corporate mergers and the idea of integrating everything onto a single platform just seems too immense a task.

Actually, it isn’t. A competent VAN provider can transfer all your existing links, protocols and formats without any discernible disruption to service – and the benefits are great!

Why pay two or three sets of fees for very similar services? We rarely, nowadays, have to have multiple mobile phone accounts to access particular services or apps. The argument for not putting all your eggs in one basket may have had validity in the days when some VANs were distinctly speculative, but waves of consolidation have effectively weeded out the weaker players. Instead, firms should be thinking of gaining economies of scale on pricing; of lowering internal costs because there are fewer contracts to monitor and manage; of having just one contact point if a problem arises (and not having the confusion of which particular vendor may be the cause of the problem) and of redirecting staff to more gainful activities.

Whether you proudly run your own EDI, or are submerged in a morass of competing contracts, we suggest building a long-term relationship with a single VAN provider. Not just any provider, of course, but one that can offer clarity of pricing as much as base cost, high levels of technical support and genuine experience, not just in your industry, but in the various functions of your business that use EDI.

Performance and reliability

A VAN provider should be willing to be upfront about performance and reliability issues – sadly, too many hide behind the technological mystique. There is indeed a lot of arcane knowledge involved, but that shouldn’t prevent a competent VAN provider from giving its customers true and understandable reports on service, cost, volumes and reliability.

Remember that your new VAN provider – who may or may not be one of your existing suppliers – does almost all the work, leaving your company only to decide on a solution that is cheaper, more reliable, more future-proof, less risky and less trouble to manage. Data Interchange has been in the EDI space since its beginning and we believe we offer these features.

Why not talk to us? For further information and to discover how our EDI solutions can optimise your business processes, contact us at info@datainterchange.com.