AS2 EDI: What is Applicability Statement 2 or AS2 and how does it Work?

In today's digital landscape, efficient and secure data exchange is crucial for businesses to streamline their operations and enhance their supply chain management. EDI via AS2 (Applicability Statement 2) has emerged as a reliable and widely adopted protocol for secure data transmission between trading partners. This blog post aims to provide a comprehensive guide to AS2 EDI, highlighting its benefits, implementation process, and best practices.

What is AS2 Protocol?

AS2 (Applicability Statement 2) is a widely used protocol for secure and reliable data exchange between trading partners over the internet. It is commonly employed for Electronic Data Interchange (EDI) transactions between trading partners.

The AS2 protocol utilizes HTTP(S) protocol for data transmission, making it compatible with existing internet infrastructure. AS2 provides a secure and encrypted channel for transmitting EDI messages. It uses digital certificates and encryption algorithms to ensure the integrity, confidentiality, and non-repudiation of the exchanged data.

What Is EDI (Electronic Data Interchange)?

EDI stands for Electronic Data Interchange. It is a standardized format and process for exchanging business documents electronically between different organizations. EDI enables the computer-to-computer exchange of structured data, such as purchase orders, invoices, shipping notices, and other business documents, without the need for human intervention. The goal of EDI is to facilitate seamless and automated data exchange between different organizations. EDI uses standardized formats, such as ANSI X12, EDIFACT, and XML, to represent business documents. These formats define the structure and data elements required for each type of document.

EDI is widely used across various industries, including retail, manufacturing, healthcare, logistics, finance, and more. It enables efficient and streamlined supply chain management, improves order-to-cash cycles, and enhances overall business collaboration.

What is AS2 for EDI?

AS2 (Applicability Statement 2) is a widely used protocol specifically designed for secure and reliable data exchange in the context of Electronic Data Interchange (EDI). AS2 provides a secure and encrypted channel for transmitting EDI messages. It uses digital certificates and encryption algorithms to ensure the integrity, confidentiality, and non-repudiation of the exchanged data. AS2 also supports various authentication methods, including the use of digital signatures to verify the authenticity of the sender and the integrity of the message.

To establish an AS2 connection, both the sender and receiver need to agree on the AS2 parameters, such as encryption algorithms, digital certificates, and communication settings. Once the connection is established, EDI messages can be exchanged between the trading partners using the AS2 protocol.

Here are some of the key features of AS2 for EDI:

• Digital signatures: AS2 uses digital signatures to verify the identity of the sender and to ensure that the message has not been tampered with.
• Encryption: AS2 uses encryption to protect the confidentiality of the message.
• MDNs: AS2 uses MDNs (message delivery notifications) to provide confirmation that a message has been delivered successfully.
• Receipts: AS2 uses receipts to provide proof of delivery.

If you are considering using AS2 for EDI, there are a few things you need to keep in mind:

• EDI standards: : There are a number of EDI standards that businesses need to follow in order to exchange EDI documents using AS2.
• AS2 software: : Businesses need to have AS2 software that is compatible with the AS2 standards that their trading partners use.
• AS2 infrastructure: : Businesses need to have the necessary AS2 infrastructure in place, such as a network connection and a secure server.

Why AS2 EDI?

Companies are changing to AS2 EDI because of three main reasons—confidentiality, authentication, and non-repudiation. AS2 EDI communication can save companies significant money in network costs, add flexibility to the EDI data, and increase control over how that data is reported.

How does AS2 work?

AS2 (Applicability Statement 2) works by providing a secure and reliable method for transmitting data over the internet between trading partners. AS2 works by wrapping EDI messages in a secure envelope. The envelope contains the following information:

• The sender's and recipient's AS2 identifiers
• The message's content
• A digital signature from the sender
• Encryption of the message

The following are the steps involved in how AS2 works:

• The sender creates an EDI message.
• The sender wraps the EDI message in an AS2 envelope.
• The sender encrypts the AS2 envelope.
• The sender sends the AS2 envelope to the recipient.
• The recipient decrypts the AS2 envelope.
• The recipient verifies the digital signature.

The recipient then sends an MDN (message delivery notification) back to the sender to confirm that the message has been received successfully.

What are AS2 Certificates?

AS2 certificates are an integral part of the AS2 protocol. They play a crucial role in ensuring the security and authenticity of the data being exchanged between trading partners. AS2 certificates are typically issued by a certificate authority (CA). However, they can also be self-signed. Self-signed certificates are not as secure as CA-issued certificates, but they can be used for testing or for small businesses that do not need the highest level of security.

What are the benefits of AS2?

• Security: AS2 provides robust security features to protect sensitive data during transmission. It utilizes encryption, digital signatures, and MDNs (Message Disposition Notifications) to ensure data confidentiality, integrity, and authentication.. This helps to ensure that data is not intercepted or tampered with during transmission.
• Cost-effective: AS2 is a peer-to-peer protocol, which means that it does not require the use of a Value Added Network (VAN). This can save businesses money on file transfer fees.
• Flexibility: AS2 can be used to transfer a wide variety of file formats, including EDI, XML, and PDF. This makes it a versatile protocol that can be used for a variety of purposes.
• Reliability: AS2 is a reliable protocol that is designed to ensure that data is delivered successfully. If a message is not delivered, the sender will be notified.
• Compliance: AS2 is compliant with a number of industry standards, including HIPAA, PCI DSS, and SOX. This makes it a good choice for businesses that need to comply with these regulations.
• Scalability: AS2 can be scaled to meet the needs of businesses of all sizes. This makes it a good choice for businesses that are growing or that need to be able to handle large volumes of data.
• Support: There are a number of AS2 software solutions available, so businesses can find a solution that meets their needs. These solutions also provide support to help businesses get started with AS2 and troubleshoot any problems that they may encounter.

Overall, AS2 EDI offers organizations a secure, reliable, and standardized approach to B2B data exchange. It strengthens data security, streamlines business processes, fosters collaboration, reduces costs, and ensures compliance with industry-specific and regulatory requirements. These benefits make AS2 EDI a preferred choice for organizations seeking efficient and secure communication with their trading partners.

To learn more about how Infocon Systems can take care of your EDI needs for your business, please don’t hesitate to give us a call at +1 888-339-0722 or email sales@infoconn.com. We’d love to hear from you.