EDI implementation involves setting up electronic data interchange systems to automate data exchange, improve accuracy, and facilitate communication.

Tag Archive for: EDI implementation

How does EDI2XML work ?

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How does EDI2XML work?

In simple terms, EDI2XML is a converter from EDI X12 format to XML format. The result XML format file is based on a pre-defined schema (xsd); we call it our “EDI2XML format”. Here is a very simple graphical description of the EDI2XML engine “in action”.

EDI Platform

Read: What is EDI ?

EDI2XML can work in two directions by changing a little switch when executing the command:

  • Convert incoming EDI X12 files to XML format
  • Convert outgoing XML format files to EDI format
For incoming EDI files, after a raw X12 EDI file is received using communication software and the EDI2XML engine is triggered, the following actions are executed one after the other:
– EDI2XML will verify the structure of the received file to make sure it is a valid raw EDI X12 format file
– If the raw EDI X12 file is valid in terms of structure, it will run another path to eliminate any information not considered part of EDI; for example, some headings and footers sent through the EDI VAN are automatically cleaned as it does not relate to any business information exchanged with the EDI partner
– The engine is smart enough to split a batch of incoming EDI files inside the same physical file, by envelop (ISA) and by ISA id, as a preparation for the conversion to XML, regardless of its EDI standard and revision
– Once all of the above is completed, the engine would generate for each one of the EDI files an equivalent XML formatted file.
The EDI2XML engine works a little differently when converting raw X12 files from an XML format. Once the engine is triggered with the option to convert XML to EDI X12 format, it will do the following actions:
– For each XML file found, EDI2XML will validate its structure and find out if it is well formed, to make sure it is compliant with edi2xml format and schema
– For each valid XML file, the engine will convert from XML to X12 raw EDI format
*It is important to note that the XML file should comply with a pre-defined xsd (or schema). All necessary information related to EDI versions and standards are sent within the XML file. For incoming and outgoing edi2xml formatted files, only files from the “ licensed” partners are being processed. Any EDI or XML file sent from/to an unlicensed partner will NOT be processed at all.

Read: How is EDI2XML licensed ?

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What is a VAN?

EDI Communication and VANs

What is a VAN ?

A Value Added Network (VAN) is considered the “post office” where business partners can collect and sort EDI documents coming through. As of today, a considerable amount of EDI transactions are still going through VANs, however this number is always in constant decline considering the popularity of the internet, its reduced cost as well as the level of security someone can implement with internet communication protocols. Most of the “major players” in the retail industry, have switched to a point-to-point communication of EDI files and transactions using one or many of the following secured communication protocols for a point-to-point EDI exchange:

FTP (not secured – plain text)

sFTP

Https

AS2

AS3

telnet

“bisync modem” to communicate through a value added network (VAN). This is the oldest method of secured communication.

VAN vs Direct EDI Communication

Communication Method Description Security Cost Usage Today
VAN 3rd-party network that stores, routes and manages EDI messages High (managed by provider) High Declining, but still used in government, healthcare, and legacy systems
FTP Basic file transfer (unencrypted) ❌ Not secure Low Not recommended
sFTP Encrypted file transfer ✅ Secure Low Common
HTTPS Secure web communication ✅ Secure Low Popular
AS2 Real-time encrypted transmission over internet ✅ Very secure Low Industry standard
AS3 File-based (FTP-style) but secure and standards-based ✅ Secure Low Less common
Bisync modem / Telnet Legacy dial-up communication methods Obsolete High Rare (legacy systems only)

Should You Still Use a VAN?

While VANs still serve a purpose — especially in industries like healthcare and government where legacy infrastructure and compliance are key — most businesses now prefer AS2, HTTPS, or sFTP for faster, cheaper, and more flexible data exchange.

If you’re evaluating EDI communication options, consider the following:

  • How many partners still require a VAN?

  • Do you need full audit trails, data backup, and message tracking?

  • Is your team equipped to manage point-to-point protocols like AS2?

At EDI2XML, we support both VAN-based and direct communication, offering our clients flexibility depending on their partners’ requirements and their internal capabilities.

Key Takeaways

  • A VAN is a secure intermediary for EDI document exchange but is declining in use.

  • Direct communication methods like AS2 and HTTPS are now preferred for cost, speed, and control.

  • Businesses often adopt a hybrid model to accommodate different trading partners.

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