Value-Added Network (VAN)

What is a VAN?

A value-added network (VAN) is a private, hosted service that securely exchanges structured business data between organizations. VANs have traditionally supported electronic data interchange (EDI) transactions—standardized business documents such as purchase orders, invoices, and shipping notices—by acting as an intermediary that validates, formats, routes, archives, and provides audit trails for exchanged data.

How VANs work

• Companies connect to the VAN and send transactions into the network.
• The VAN validates and formats the data to agreed standards, then places it in the recipient’s mailbox within the VAN.
• The recipient retrieves the transaction from their mailbox; they may also push transactions back through the VAN.
• The system resembles email but is designed for standardized, machine-readable data rather than free-form text.

VANs commonly integrate with back-office systems (for example, ERP suites), enabling received data to flow directly into business applications without manual re-entry.

Key features and benefits

• Secure, validated exchange of standardized data.
• Centralized intermediary reduces the number of direct connections a company must manage.
• Automated formatting and validation lower errors from manual data entry.
• Audit trails, encryption, authentication, and archival for compliance and traceability.
• Visibility and workflow tools to monitor delivery status and coordinate dependent activities.
• Backup and secure web-portal access to historical transactions.
• Pricing models and service bundles that can include unlimited data options.

VANs vs. Internet-based solutions

The wide availability of the Internet and secure email made simple point-to-point data exchange cheaper and more common. VANs, however, remain valuable when:
– Industry-specific data integrity, security, or compliance requirements are strict (healthcare, retail, manufacturing).
– Companies need guaranteed delivery, standardized validation, or robust auditing.
– Integration with complex back-office systems and partner ecosystems must be tightly controlled.

Common use cases

• Large manufacturers and retailers coordinating with many suppliers for purchase orders, advance ship notices, and invoices.
• Healthcare organizations exchanging claims, eligibility, and clinical data where compliance and security are critical.
• Industry consortiums or telecom companies managing standardized transactions across many partners.

When to consider a VAN

• You exchange high volumes of standardized transactions with multiple partners.
• You require strong validation, auditing, and archival capabilities.
• Industry regulations demand secure, traceable data exchange.
• You want fewer direct integrations and a managed intermediary to simplify partner connectivity.

Key takeaways

• VANs are private networks that facilitate secure, standardized data exchange, especially for EDI.
• They reduce integration complexity by centralizing validation, routing, and archival.
• Although Internet-based methods can be cheaper for simple exchanges, VANs offer added security, compliance, and operational features that remain valuable in many industries.