The 1980s saw Value-Added Networks (VANs) emerge as a powerful B2B supply chain communication tool. Because– constant mergers and monopolies aside–the telecommunications market was extremely heterogeneous, and infrastructures varied from industry-to-industry, location-to-location, VANs served as intermediaries who offered “user defined networks:” connectivity between management, suppliers and other key players in the chain that needed to be in the communication loop. This prefigured the current use of email and the Internet as the IT infrastructure of most businesses. VANs offered store-and-forward mailboxes that provided protocol conversion and secure delivery of standardized structured data. The use of structured data, as opposed to unstructured text like that in today’s email, resulted in a co-development with EDI sets.
Most VANs were costly, priced outside of the reach of most businesses that still relied on a multitude of (highly inefficient and human error prone) paper-recording and communication technologies. An interesting twist to this is that, though larger highly-capitalized firms were able to invest in the VAN infrastructure and often exorbitant transaction costs for maintaining their EDIs, they often had to continue to maintain paper-based data processes in order to work with smaller companies who were unable to move their data systems over from paper. This duplication of systems undermined the function if not the allure of VANs.
Then came the Internet. Accessible standards like ebXML saw Web services network (WSN) take on much of the duties that EDI users would look to VANs to perform. Future prospects for VANs, it seemed, were incredibly bleak.
But, alas, Internet B2B transaction never did quite defeat the eternal boogeymen of dependability and security, as the B2B system involves inter-firm communication between the secure firewalls that tame the internet, often on completely different IT infrastructure. This is how VANs defended market share: by focusing on specific vertical industries that put a premium on security. By expanding the services they offer and further developing Transaction Delivery Networks (TDN) that provide secure end-to-end management of electronic communications, VANs have been made market gains in healthcare, retail and manufacturing and other high security, often data-centralized industries. Thus, rather than connecting firms with the great big world, VANs focused on their market corner, intra-firm communication, and stayed in the game.
WE THINK IT”S TIME FOR A CHANGE. FIRE YOUR VAN TODAY.