Imagine your procurement team had the ability to not just requisition goods and services, but connect to the entire supplier catalog and browse pre-approved goods at the best pricing and terms available, all without leaving your eProcurement system. A PunchOut catalogue makes this dream a reality—a shopping experience that can provide process improvement and better spend management for your entire organization.
PunchOut integration combines ecommerce with procurement to create a single system buying organizations can use to streamline the purchasing process.
The Purpose of PunchOut Catalogs
A PunchOut catalog (also called a Punch Out catalogue/catalog, PunchOut catalog, PunchOut supplier catalogue/catalog, or PunchOut website) is a business-to-business (b2b) eProcurement application that allows supplier catalogues to integrate with a buyer’s own procurement application or enterprise resource planning (ERP) solution. The “PunchOut” in question is the purchaser’s departure from the buyer’s own eProcurement application to access data directly fed from the supplier’s product catalogs.
Approved purchasers from the buying organization can access hosted catalogs as part of the purchasing process, placing items in a shopping cart and checking out as they would when using an eCommerce solution to shop from home.
But instead of the supplier handling the sale and invoicing the items purchased, the entire transaction is handled by the buyer’s purchasing system. This improves efficiency and allows for greater flexibility and savings as compared to older models relying on static electronic or paper catalogs.
While only a small part of a larger procurement strategy, eCommerce tools such as PunchOut catalogs drive the incremental improvements in cost savings and efficiency that can make a substantial difference to productivity, competitive advantage, and profitability.
How PunchOut Catalogs Work
Using traditional, paper-based manual procurement, items from a given supplier’s catalog don’t enter a buyer’s purchasing system until after a buyer consults a static paper or digital catalog. They then specify the items to be added to a purchase requisition, and the resultant purchase order is sent to the supplier for fulfillment.
More modern procurement systems allow buyers to import a vendor catalogs directly into the buyer’s own procurement application, but left updates to supplier data, file format conversions, and data integrity expenses in the hands, and on the budgets, of the procurement department.
Modern catalog import solutions use a format invented in mid-1990s known as catalog interchange format or CIF. Files in this format electronically transmit supplier catalog data to buyers in a comma separated variable (CSV) layout specifying:
- File header
- Line item data
- File trailer
This format allows for easy and intuitive creation of hierarchical relationships (e.g., size, color, material for a given item) while keeping file size and data management costs to a minimum. It also eliminates the need for the tedious entry of product information and reduces or eliminates the need to convert received catalog files.
However, the simplicity of CIF catalogs also limits their versatility in data-driven, real-time eProcurement systems. CIF cannot directly support advanced item configurations, and its static nature limits its utility to items that don’t require frequent updates.
PunchOut Catalogs address these limitations through the use of two other languages:
- Commerce Extensible Markup Language, or cXML
- Open Catalog Interface, or OCI, commonly used by System Applications and Products (SAP) and Oracle-based systems.
PunchOut catalogs (which, again, are often called PunchOut websites when their interface is distinct from the buyer’s eProcurement interface) are built on cXML and OCI. These languages are dynamic and support advanced configuration and full b2b eCommerce functionality for buyers in addition to the automatic data transmission of CIF catalogs.
Consider this example: Company A is buying goods from Company B via a CXML PunchOut solution. A typical transaction would look something like this:
- A buyer at Company A accesses the master supplier catalog through their eProcurement application.
- The buyer searches for a specific item, fulfilled by Company B.
- Company B uses a PunchOut site that automatically integrates with the buyer’s purchasing software. The user is automatically logged into the eCommerce site.
- The buyer from Company A locates the desired item, configures it as desired (including quantity, materials, size, and accessories) and adds it to their cart for checkout.
- At checkout, the user is sent back to the procurement system, which creates and populates a pending purchase order and routes it for approval, beginning the procure-to-pay process.
Benefits of PunchOut Catalogs
Automation and artificial intelligence means PunchOut integrations reduce roundtrip processing time and reduce errors for electronic purchase orders, generating savings and efficiency improvements. Using cXML and OCI tech ensures vendor catalogs are always up to date, including real-time, accurate pricing and availability data. Rogue spend is curtailed by sandboxed, pre-approved catalog offerings that ensure spend is not only visible, but optimized for the best price, terms, and discounts or incentives.
PunchOut catalogs also add value by freeing procurement staff from tedious low-value tasks like data entry to focus on more important strategic ones.
In addition, these systems create stronger and more strategic supplier relationships, as the free flow of information and improved efficiency can build to other shared initiatives and a stronger negotiation position for pricing, terms, and service.
Plug Into Greater Productivity with PunchOuts
While only a small part of a larger procurement strategy, eCommerce tools such as PunchOut catalogs drive the incremental improvements in cost savings and efficiency that can make a substantial difference to productivity, competitive advantage, and profitability. Consider making a PunchOut integration part of your procurement system, and ring up savings and process improvements with every purchase.