EDI Communication Requires Protocols. Learn How They Work and a Summary of File Transfer Protocols and AS2
What are EDI protocols
EDI protocols are the software that allows two computers to communicate.
For computers to exchange data electronically, they must use the same protocol. Protocols function in a variety of ways and are used for internal communications within a company as well as B2B communications.
You can think of protocols as languages. For two or more computers to communicate successfully, they must be using the same protocol.
Levels of data security and encryption, necessary hardware and software, and level of availability to receive transmissions are all dictated by EDI protocols.
Many companies use different protocols, meaning that trading partners often need to be able to support more than one protocol. Deciding to outsource EDI services is a suitable option for many companies. Outsourcing removes the complexities and expenses associated with having an in-house EDI service.
Also, EDI service providers stay current on updating EDI software and technologies.
Your trading partners will have different EDI requirements. See them here:
Below are the four most common EDI protocols:
FTP with VPN
File Transfer Protocol (FTP) functions on a client/server system meaning that one trading partner functions as the FTP client and the other as the FTP server. The client connects to the server through a username and password authentication.
Although FTP is no longer secure enough on its own for B2B transmissions, many companies still use FTP for in-house transmissions. However, coupling FTP with VPN (Virtual Private Network) is a standard solution for businesses that want to continue using FTP for EDI B2B transmissions. VPN enables the server to verify that the sent transmission is truly from the client.
SFTP and FTPS
Secure File Transfer Protocol (SFTP) and File Transfer Protocol Secure (FTPS) function in a similar fashion as FTP. However, both SFTP and FTPS have security layers that encrypt EDI data during transmission and then decrypt the EDI data upon arrival.
Being created by different companies is the main difference between SFTP and FTPS. Developed by the Internet Engineering Task Force (IETF), SFTP’s encryption is different from FTPS, which was created by the Internet browser Netscape.
Many companies that utilize File Transfer Protocols outsource their EDI service to a Value-added Network. A VAN will ensure authenticity (non-repudiation) and assist in message management–two major issues often found associated with FTP protocols.
Applicability Standard 2 (AS2) was developed in 2002 solving some of the limitations found in FTP protocols. The IETF created the widely used AS2 protocol as well.
AS2 uses encryption keys verifying the senders of EDI transmissions providing non-repudiation and high-level security for the transmissions. Also, AS2 utilizes Message Disposition Notification, which notifies both sides of successful, decrypted transmissions.
AS2 requires trading partners to be up and running on the internet at all times. AS2 Utilizes the Transmission Control Protocol/Internet Protocol. TCP/IP is the communication language of the internet. Thus, a receiving trading partner must be on the internet at the time of transmissions.
The 24/7 availability of AS2 has made AS2 the only acceptable protocol by major retailers such as Walmart, Bed Bath and Beyond, and Target.
Because AS2 is always operating and because AS2 is more complicated than other EDI protocols, many companies outsource this EDI service as well.