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What is a Value Added Network?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 15 September 2016
  • Copyright Protected:
    2003-2016
    Conjecture Corporation
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Also known as a VAN, a value added network is a type of private provider that is engaged by a company to manage the process of electronic data interchange or EDI for the business. In many cases, the network will also serve as the means of managing a number of different network services, including online commerce solutions. Sometimes referred to as turnkey communications, a value added network allows even small businesses to make use of services like secure email transmissions, file encryption and even different forms of management reporting between different points within a company structure or with a business partner.

The concept of a value added network has been around for decades. Prior to the advent of the Internet for general business used, larger corporations tended to use these types of networks to manage efficient and secure transmission of data within a company infrastructure or with a select group of clients or vendors. While the range of services provided by these types of networks were more specialized in decades passed, the ability to use the Internet for many of these functions prompted service providers to re-examine the range of offerings presented to potential clients. In the process, smaller companies found that the cost of utilizing a value added network was decreasing, making it easier to enjoy access to different service options that allowed them to compete with larger companies in ways that were not possible before the widespread use of the Internet became common.

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Today, a value added network is likely to provide a number of services that are considered part of the electronic data interchange process. This includes what is known as EDI translation, a strategy that makes it possible to protect data between two points using encryption that renders the information of little to no use without access to the encryption keys. Secure email is another common service offered by an value added network, making it easier to use this medium to transmit documents and share information of a confidential nature without worries of interception by unauthorized parties. Reporting tools are also often provided as part of the network services, an offering that can make the day to day management process for just about any company easier to perform.

Costs associated with a given value added network is often based on the range of services required by the customer. Providers typically offer different service packages designed for companies of different sizes and types, with some degree of customization included in the basic charges. Many providers also offer a range of services outside the scope of each individual contract offering, making it possible for clients who may need a given service on a sporadic basis to purchase it on an as-needed basis, rather than purchasing a costlier package that includes the service in the basic bundle.

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