Punchout and ECommerce – Innovation for Procurement

ECommerce websites have taken the world by storm. Procurement teams have become used to visiting B2B providers’ eCommerce listings and setting up their purchase orders. Unfortunately, eCommerce websites have not significantly evolved since the early days of their use in B2B acquisitions. The result is that while purchasing takes place quickly, it may take far longer to get the order approved and filled by the supplier. This lag in time between order completion and fulfillment can negatively affect a company’s ability to perform its duties.

While some procurement teams have found a workaround for this, the onus lies with the supplier to have things in place that help them to make life easy for their consumers. Innovations in the world of procurement have led to standardized methods of transmitting electronic documents. These can significantly speed up the process, but by themselves, they still rely heavily on human interaction. As we all know, the human element in most processing systems is where most of the errors arise. The ideal situation would be to implement a solution that focuses on providing a simple interface with a buyer’s network and automatically seeks the relevant approvals for the purchase order generation.

Introducing the Punchout Catalog

Ariba initially designed the Punchout system in 1997. As SAP Ariba informs us, a punchout catalog is a product listing that resides on the supplier’s website but makes its products viewable to buyers within their own procurement software. Punchout catalogs allow B2B suppliers to have more flexibility in their product listings while ensuring that buyers don’t have to jump through too many hoops to make a purchase. With the right punchout platform, a company can leverage even more powerful tools that make use of automatic transfer of electronic information.

Updating of Records in cXML

The most recent iterations of punchout catalogs make use of an interchange format called cXML. Both buyers and suppliers may have distinctly different back ends for their eCommerce and procurement systems. Finding a way to ensure that those systems can interact and exchange information is critical for B2B marketers. The more buyers that they can serve with their punchout catalog system, the more likely it is for those consumers to stick around. cXML evolved as a means of creating a standard for communicating procurement information across a wide range of software. Today, most procurement software can read cXML format files.

Thanks to the acceptance of cXML as a standard, punchout catalogs managed to gain a leg up on traditional eCommerce platforms. Punchout catalogs can now send purchase orders directly to the procurement software and seek approvals by transferring the data in cXML format. The same procurement software can then update the supplier when the purchase order is approved, speeding up the time lag between PO approval and order delivery. Thanks to the electronic nature of the exchange, there’s no need to worry about human error causing issues in the process.

Why B2B Suppliers Should Consider Punchout Catalogs

At its heart, the punchout catalog is a way for B2B suppliers to increase the efficiency of their services. Businesses can edit their catalog listings to expand or limit the supply of items to individual customers. They can even be linked with existing accounts within an eCommerce website, enabling buyers to use the same account details they have been using over time to complete their purchases. In addition to increased performance, punchout catalogs also offer superior support for users. Businesses that provide punchout catalogs can help users directly if they’re having problems with their purchase. The flexibility of the system means that the buyer doesn’t even have to log out of the system.

Furthermore, punchout catalogs can generate significant savings for a small business. Punchout catalogs count as a Software-as-a-Service eProcurement platform. The company’s only concern is about updating its listings to match changes in product offerings and prices. The entire system is operated by a third-party provider, ensuring complete security and ease of use to both the supplier and the buyer. What this means is that businesses can leverage a powerful SaaS eProcurement solution without a significant investment in capital or time to implement IT infrastructure.

Combining Procurement with ECommerce

Procurement departments are aware of how important they are to how a company runs. Any significant impact on a business’s supply chains could have severe repercussions on how efficiently a company performs. Traditional procurement methodologies display several inefficiencies and controllable expenses. Punchout catalogs exist as a means of combining procurement with eCommerce in a seamless way. Through the use of transfer protocols, the supplier can rest assured that the purchaser’s back end can deal with the information it’s sending to them and vice-versa.

It is important to remember that punchout catalogs aren’t a replacement for eCommerce platforms, but rather a way to make them more efficient to use. Regular consumers can still visit a company’s eCommerce front-end to purchase products directly. However, B2B customers who aim to procure large volumes of product and require the documentation to go through the right channels may have a hard time getting this done promptly through an eCommerce front-end. The solution is the implementation of a punchout catalog to make it easier for those buyers to get the products they need with the requisite approvals. The Spanish Journal of Marketing informs us that perceived ease of use is a significant factor in retaining a customer. In this sense, punchout catalogs help B2B suppliers keep their customer base satisfied with efficient processes.

Procurement in the Twenty-First Century

Punchout catalogs, despite their usefulness, haven’t seen the kind of popularity in B2B suppliers that one would expect. One of the significant reasons for the low adoption rate lies with how many B2B suppliers think that their eCommerce platforms are sufficient to deal with their clients. However, punchout catalogs offer a superior benefit over typical eCommerce routes – ease of use. The two-way communication involved in punchout catalogs, along with how easy it is to initiate purchases from the safety of a company’s procurement suite, makes it an attractive way for businesses to acquire items. Smaller B2B marketers especially can benefit immensely from implementing punchout catalogs as part of their eCommerce solution. Making it easier for buyers to complete their purchase translates into satisfied customers and potential repeat business.