What Is a PunchOut Catalog And Why Is it Important?

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PunchOut catalogs have been around for a little while, but to most businesses, they’re still mostly a mystery. Many companies consider this tech advancement as just another iteration of the eCommerce website. In essence, they’re not wrong. SAP Ariba initially developed the PunchOut catalog in 1995 as a method of streamlining the procurement process. Since that initial introduction, PunchOut has evolved into a strictly better way of implementing eCommerce for suppliers. Not only does it make the life of the supplier easier, but it also benefits buyers by automating the generation of many of the internal documents needed for procurement to take place.

Before we can appreciate how PunchOut does this, we must first take a look at what makes PunchOut unique. The primary goal of PunchOut was to be an intermediary that links seller websites to buyer procurement software. To do this, the system cut down on the delivery of products into a series of catalogs. Each catalog can be streamlined to a particular class of purchaser, allowing them access to the products they want directly, and allowing them to start the purchasing process within the comfort of their own procurement system.

How PunchOut Catalogs Work

The name PunchOut is a clue to how these systems interface with the buyer’s procurement suite. Instead of directing the buyer to a specific eCommerce website, they are instead “PunchedOut” to the seller’s catalog, where they can start performing their browsing and purchasing. Once they complete the selection of goods, they then return to their own company’s procurement software to finalize the purchase and receive approvals from the procurement heads. PunchOut catalogs also offer a supplier an edge in providing support to acquisitions, as they can interact with the system in real-time without the buyer needing to log out. This convenience can help speed up procurement and ease any issues clients may have interacting with the catalog.

A More Efficient Way of Doing Things

Already, we can see that the implementation of a PunchOut system adds value to the procurement process. This added value is the start of distancing the PunchOut system from a traditional eCommerce procurement website. Instead of a potential buyer having to sift through the products that the business offers, they can instead spend that time comparing prices of relevant products and determining the quantity they need for their company. The limitation of choice can be a boon for buyers that may have to sort through hundreds of products across dozens of industries for a single supplier.

Technology Saves the Day

PunchOut Catalogs were developed to be customer-centric. According to Impact, we exist in a world where customer experience forms a significant part of repeat business. PunchOut leverages customer experience to create a smoother interaction between supplier and buyer. How it does so is by leveraging technology to automate processes. Many businesses already utilize eProcurement suites. However, the use of these suites requires that vendors send electronic documents to update the system. While the procurement department can enter purchase orders manually, the process is tedious.

PunchOut allows a business to automate, not only the request for acquisition and development of purchase orders but even the updating of inventory software with the status of an order. This methodology streamlines how business goes about acquiring products. The use of an interchange format for documentation that is readable by both the PunchOut catalog and the buyer’s procurement system is crucial to this efficiency. The newest PunchOut systems utilize a specialized XML format known as Commerce eXtensible Markup Language (cXML).

Why Are PunchOut Catalogs Important?

A lot of business procurement departments don’t see the need for instituting PunchOut as part of their eCommerce website. They see it as a redundancy. Buyers can quickly go to the site, find their products, and check out. The issue here is that this mindset doesn’t encompass a customer-centric model that PunchOut aims to implement. The benefits that PunchOut offers to a buyer are numerous and include:

  • More Efficient Tracking of Purchases: Because the purchasing system routs through the company’s ERP, there’s no need to worry about purchases being made “off the books,” and all spending can be tracked and accounted for.
  • Higher Levels of Security: The procurement team each have their own accounts within the company’s software suite, and the company can trace all acquisitions back to a single user. Additionally, automatic login procedures ensure that the company’s machines are the only ones that can order using the company’s login.
  • Faster Approvals: Because of the use of technology to automatically generate purchase orders and seek approvals, the time between completing the order and having documents ready to send to the supplier reduces drastically.

Getting with the Times

Technology has already impacted several areas of the field of procurement. The slow rate of adoption means that many of us within the field still remember when the procurement process took weeks between making a decision for products and finally receiving those items. Today, thanks to technology, the time-lag between order and delivery has dropped significantly.

However, in some businesses, the process for approvals and purchase order generation still needs reform. As more buyers start moving to an eProcurement methodology, suppliers need to keep up with the technology or risk losing customers. If, as a supplier, you haven’t looked into how PunchOut can improve your processes as yet, now would be the ideal time to examine how this tech advancement can benefit your business’s efficiency.

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