Electronic Data Interchange (EDI) is the digital exchange of structured business documents, such as purchase orders, invoices, and shipping notices, between trading partners.
At the heart of this process lies the network infrastructure that enables secure, timely, and reliable transmission of data.
The type of network used in EDI depends on multiple factors such as trading partner requirements, document volumes, integration preferences, and security needs.
Here are some networks used in EDI transmissions.
In the earliest implementations of EDI, businesses exchanged data through direct, dedicated connections. This approach is known as point-to-point.
In this model, each business establishes a unique communication line with every trading partner. This could be achieved using leased lines, dial-up modems, or dedicated private network links. While it ensured control and privacy, it quickly became inefficient as the number of partners increased. A new connection had to be created and maintained for every new trading relationship, which led to high complexity and operational overhead.
Despite being outdated in many sectors, some industries with fixed supply chains, like automotive manufacturing, still use point-to-point connections for high-volume, time-sensitive EDI transactions.
To streamline EDI exchanges, many businesses turned to third-party EDI networks called Value-Added Networks (VANs). A VAN acts as a digital post office.
VANs receive, store, and forward EDI messages between trading partners. Each business connects to the VAN through a single communication link. The VAN handles message routing, security, validation, and protocol conversions. VANs offer features like mailbox services, encryption, audit trails, and guaranteed delivery.
The benefits of VANs include:
With the rise of the internet, businesses started moving away from private networks and VANs to web-based EDI protocols. One major innovation was EDIINT (EDI over the Internet), a set of protocols that allow secure EDI transmission via standard internet infrastructure.
The most widely used EDIINT protocols are:
AS2 is by far the most popular. It uses HTTP or HTTPS to securely transmit EDI documents in real time. AS2 supports encryption, digital signatures, and Message Disposition Notifications (MDNs) to ensure non-repudiation.
AS2 is widely used by major retailers, including Walmart and Target, and is a requirement for trading with many large organizations.
VPNs provide secure point-to-point communication over the public internet by encrypting data packets between endpoints.
In the context of EDI, VPNs can be used to establish secure tunnels between the internal networks of trading partners. VPNs are typically used in conjunction with FTP, SFTP, or other transport protocols to transmit EDI files.
While VPNs are highly secure and offer more control than AS2 or VANs, they require technical expertise to set up and maintain. They're often used by large enterprises with IT departments that can manage VPN configurations, certificates, and key management.
EDI networks rely heavily on standardized file transfer protocols to move documents between systems. These include:
These protocols act as the transmission layer over which EDI documents, such as ANSI X12 or EDIFACT, are exchanged. The choice of protocol depends on the organization’s security policies, legacy systems, and compliance needs.
Modern EDI systems increasingly use web services and APIs to handle document exchange. These methods allow applications to directly communicate with one another using lightweight, real-time protocols.
APIs offer:
Common technologies used include:
APIs don’t replace traditional EDI standards, but they complement them. For example, a RESTful API might be used to extract order data from an ERP system, transform it into X12 format, and send it via AS2 to a trading partner.
Most businesses don’t rely on just one network or method. Hybrid models are now the norm.
A company might use:
Hybrid setups allow businesses to adapt to partner-specific needs while modernizing their own infrastructure over time. Middleware tools or integration hubs are often deployed to orchestrate and route EDI traffic between these different protocols and networks.
Cloud-based EDI platforms are transforming how businesses handle network infrastructure.
Instead of setting up individual connections, users can plug into a cloud EDI network and instantly connect with thousands of pre-configured trading partners. These platforms offer:
Examples include:
Cloud EDI networks reduce infrastructure costs, improve scalability, and support faster onboarding.
Though still in early adoption stages, blockchain is emerging as a potential framework for EDI data exchange.
In this model:
Blockchain EDI is especially useful in supply chains where trust, transparency, and traceability are critical, such as pharmaceuticals or food safety.
While not a replacement for existing EDI networks, blockchain adds a trust layer that could supplement or verify traditional exchanges.
Regardless of the network used, securing EDI transmissions is non-negotiable. Breaches can expose confidential contracts, pricing, or personal data.
Key security features include:
AS2 and SFTP are considered among the most secure transport options. However, the security also depends on how endpoints are configured, how credentials are managed, and whether data at rest is encrypted.
As EDI volumes grow, so does the need for network visibility and performance monitoring.
Modern EDI networks offer:
Effective network management ensures smooth trading operations, minimizes revenue loss, and supports regulatory compliance.
Industries and governments often mandate specific networking standards and protocols.
For example:
EDI providers must ensure their networks comply with these standards, and businesses must select networks that align with their industry requirements.
The choice of EDI network affects not just connectivity but also ongoing costs.
Businesses must weigh cost, performance, and partner compatibility before settling on a network strategy.
EDI networks must scale with business growth.
Networks that are too rigid or custom-built may limit future expansion. That’s why many enterprises now invest in integration platforms-as-a-service (iPaaS) or network-as-a-service (NaaS) models that allow elastic growth, support new trading partners, and easily onboard new protocols like AS4 or JSON-based exchanges.
EDI networks have evolved from basic direct connections to flexible, cloud-based platforms that support a variety of protocols, standards, and use cases. Whether it's through VANs, AS2, SFTP, or APIs, the right EDI network enables secure, fast, and reliable document exchange, helping businesses streamline their supply chains and meet trading partner requirements.
For most companies today, using a mix of network types backed by strong monitoring and integration capabilities is the most effective approach. As technologies like blockchain and AI continue to mature, we can expect EDI networks to become even more intelligent, autonomous, and adaptable.
Improve Your B2B, B2G, and B2C Ecommerce?
Integrate EDI For Efficiency, Compliance, and Scalability?
Just Curious About EDI?
Give Us A Call
202-280-7060
