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EDI VANs
What is a VAN?
?
Electronic Data Interchange (EDI)
Definition
Inter-corporate exchange
of business transactions,
electronically, in standard
structured formats.
An EDI Van is:
A Value Added Network
A Business that provides network based electronic
messaging solutions and services to customers
Global delivery options
24 X 7 customer care
connectivity options network mailbox
wide area network expertise
secure reliability
A VAN Definition
A Network that facilitates the
connectivity and message flow of
globally dispersed computers and
applications that run on a variety
of computer hardware and
software platforms
“Electronic Commerce Solutions Providers”
PRE VAN - The Customer Problem
Manufacturers Retailers
The Van Solution
Financial Distributors Suppliers Freight
Institutions Carriers
Manufacturers
Retailers
Financial
Distributors Suppliers
Institutions Freight
Carriers
Access and Delivery Options
Electronic Remote
Telex Fax Hard Copy Wireless Voice
Mailbox Printer
F A X
Sa fa ri
FAX
Delivery AT&T
Options Messaging
Service
Access
Options
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M E M O R Y S A F E G U A R D / A U T O P O W E R O F F
Handheld PCs Terminals LANs Minis Hosts
Host Connectivity
TCP/IP
UNIX
System V FTP, X.400
Telnet
MTA Envelope HTTP/S X.400 (PO) (P2)
SMTP/S
Windows, MS-DOS, INTERNET
Macintosh PC
(Async)
TCP/IP
FTP, Telnet
Various HTTP/S SMTP/S
2780, Other
Computers
3780, Network
3770
P LU 6.2
A
D
Odette File Transfer
Various
Computers
Wireless Comm.
EDI 3780
X.400 Interconnects
Interconnects
SNADS, PROFS, DAD
Other
Other
Various X.400
EDI
IBM Hosts ADMDs
VANs
Value Added Services
• Electronic Mail
• Fax
• Telex
• Hosting services
• Customer Care
• Business Consulting
• Implementation Services
• Translation and Compliance Services
• Software
• Customized and Proprietary Applications
Why Use a VAN
• Cost Pressures
– Simplify Processes
– Increased Productivity
– One to Many/ Many to One
– Low Capital Investment
• Competitive Pressures
– Meet Customer Demand
– Reduced Time to Market
– Support Unique Business Process
Why Use A Van
• Respond to Complex Requirements
– Legal/Regulatory
– business structure
– global demand
• Open Markets and Opportunities
• Focus on core business competencies
• Leverage technology cost efficiently
International Deployment
RUSSIA
U.K.
CANADA
EUROPEAN RSC GERMANY
BELGIUM
FRANCE HUNGARY JAPAN
UNITED STATES ITALY
AMERICAS RSC
KOREA
BERMUDA
ISRAEL IRAN
MEXICO TAIWAN
EGYPT PACIFIC RSC
DOM. REP HONG KONG
VENEZUELA PHILIPPINES
THAILAND
COLOMBIA KENYA
BRAZIL
PERU
PARAGUAY
AUSTRALIA
URUGUAY
Node Center
CHILE
Regional Sales
ARGENTINA
Office/Strategic Alliance
Reseller/VAR
How do VANs Price Services
• Network Usage
– Character based pricing
– Transaction based pricing
• Connect Time
• Toll Free Access
• Gateway Surcharges
• Application Surcharges
• Contract Fees
• Any way they want
Issues Facing VANs
• Pricing Pressure from new technologies
• Telecommunication options
• LAN
• End user Expertise
• Flexible software tools
• VABs and Trade Associations
• Internet
Strategic Benefits of EDI
Report Card
Improved Efficient
Customer Supplier
Satisfaction Management
Customer/ Competitive
Supplier Advantage
Bonding
Tactical Benefits of EDI
Accuracy of Information
- Error rates reduced 25-50% after implementing EDI*
Cost Savings
- $3.00 up to $7.00 per document savings*
Lower Inventories
Increased Productivity
Flexible Personnel Redeployment
*Source: The EDI Group, Ltd.
EDI Application
Freight Transportation Shipment Status
Benefits
• Reduced costs
• Improved customer service
• Efficient inventory management
EDI Application
Retailer - Manufacturer Quick Response Information Flow
Retailer Manufacturer
Retailer H.Q.
Application Application
Host System Host System
Sales Data
(SKU Level)
Point of Sale
Benefits
• Increased revenue
• Reduced costs
• Improved “in stock” position
• Customer satisfaction
EDI Application
Efficient Consumer Response (ECR) in the Grocery Industry
Timely, accurate, paperless information flow
Retail Consumer
Supplier Distributor
Store Household
Suppliers
Smooth, continual product flow matched to consumption Customers
Bank Distributors
Warehouses
Benefits
• Increased revenue Manufacturers
• Reduced costs
• Reduced supply chain inventory
• Maximize customer satisfaction Motor Carriers Rail Carriers
Freight Forwarders
EDI ApplicationSM
FreeForm Conversion Service Suppliers
Large Utility Authority
F A X
FAX
F A X
FAX
F A X
FAX
EDI
Free-Form
Conversion F A X
ICS** Service
FAX
GS**
ST**
BG**
LS*
NI*
IT9*
Email
Benefits Paper
• Cost savings
• Eliminate paper contracts
• Ensure minority supplier participation
EDI Application
Employee Benefits Enrollment
Insurance Carriers
John Smith:
Host Add Dependent
The Travelers
VAN
Empire Blue
Benefits Cross & Blue
Information Shield
John Smith:
Add Dependent
James Smythe: Prudential
Change from...
Benefits
• Reduced costs
• Accurate, timely information
Source: The Workgroup for EDI, Washington, D.C. Network World, August 10, 1992
EDI Application
Healthcare Claim Process
Employee Enrollment and Maintenance (834)
Employers Premium Billing and Payment Payors
Explanation of Benefits
Patients Payment
Self-Payment
Eligibility
Data Eligibility Data
(270/271)
Claims Submission (837)
Providers
Payment and Remittance Advice (835)
Benefits
• Cost savings
• Accurate, timely information
Source: J.J. Moynihan and Associates, ANSI
EDI Application
Petroleum Industry - Invoicing
Petroleum Company
Distributor
UK
810
INVOICE
820
REMIT ADVICE
BANK
Benefits
• Speed
• Accuracy
• Improved cash flow
VANs and the Internet
• Perception versus reality
• Business Needs
–security
–audit trails
–ease of use
–quality of service
•service and support staff
•reliability
• Choice of Technology, TCP/IP vs SNA, X400
Business Customers Demand
• Accountability and Liability
– who owns the road
– on demand bandwidth
– “where is my message”
– private messaging
• Connectivity to & from the Internet,
without Exposure to the Internet
VAN Internet Offering
• World Wide Web Hosting
• Network Management Services
• Home Page Design
• Security/ Trusted Third Party
• Legacy Intergration with IP
• Transaction Services
• Virtual ISP/Voice Services
• EDI
