Guide to Understanding Ecommerce Punchout

Ecommerce Punchout

As a medium to large sized company, you’ll need to use a punchout to improve the efficiency of your business. What is a punchout though? Which system should you choose? What are the benefits?

Many companies have questions about how to set up and ecommerce punchout system and which system will work for them. If you’re feeling a little unsure, take a look to see which system will work for you.

What is Ecommerce Punchout?

Have you ever clicked on something on a webpage and it opens up a link to where you can buy what you clicked on? This a little bit like ecommerce punchout.

You leave your application to go to the supplier’s online catalog, where you find the items you’re looking for and add them to your shopping cart. At the same time, your application will maintain the connection with the original website to gather data and submit the order.

The term “punchout” refers to the electronic communication that goes on between your company’s internal procurement system and its suppliers.

You access the supplier catalogs to purchase products without a problem, and still within your company’s internal infrastructure. Purchasing is made easier for customers using the procurement system.

What is a Procurement System?

These are systems which are meant to streamline the buying process, from adding things to your shopping cart to the management of purchasing policies, spending controls, and inventory levels.

Broadly, you can have three types of procurement systems: standard, which is a resource planning system, add-on e-procurement, to extend the capabilities of your ERP system, and cloud-based e-procurement, which makes sourcing new items easier for buyers.

So, a Punchout is…

Basically, the punchout then puts your online store inside of your customer’s e-procurement system. The customer is able to access and shop on your online store without leaving their ERP system.

Once you have punchout integration, the user will be able to log into their e-procurement system to find you as the vendor they want to place an order with. They’ll be able to have the full shopping experience on your website, adding things to their cart and looking around. It’s just like online shopping, except that the buyer won’t check out, but will click to transfer everything to their e-procurement system. They then place a purchase order like usual.

Common Types of Punchout

There are a few common types of punchout that you can have installed. The first, which is not technically a punchout, is the catalog interchange format files. CIFs upload product data into an e-procurement system, although the data is static, so adding to it or altering it to it is manual work.

There’s also cXML and OCI punchout, which are standard options that are widely used. If you’re looking for another option, there’s Level 2 punchout as well. Level 2 will combine your ecommerce site with a catalog file, which means that your buyers can access your punchout website either by finding your company as a vendor or searching for items directly before “punching out.”

Benefits of Ecommerce Punchout

When thinking about why you might want to switch to an ecommerce punchout system, you should know that there are some legitimate benefits. Not only does it make it easier for buyers, but it reduces your operational costs as well. There’s no manual PO entry, and no worries about customers getting the wrong information.

Customers will be able to purchase right away while interfacing with other company systems. Ultimately, this improves their user experience when it comes to searching, browsing, and accessing product information. All negotiated contracts will be followed, while management can control purchasing budgets more efficiently. In the end, this leads to more sales.

Starting with Punchout

Now that you know that you want to add a punchout system, you might not know where to get started. Firstly, find out if you’ll really benefit from punchout. Check to see if your current customers are using these types of systems and if they’ll want to try them with your business.

Of course, you’ll need to have the right technology to support your potential punchout system too. Your current ecommerce system needs to have the technology to back your platform, but beyond the technology, talk to your sales team.

Explain to them what e-procurement is and encourage them to add it to their usual dialogue.

Conclusion

You have a lot to think about when running your business. Your clients’ buying shouldn’t be one of them. By using an ecommerce punchout system, you’re able to make the user experience that much easier for your buyers, encouraging more business and reducing your costs as well. Pick out the system you’d like for your business and see if it will work for your future goals.

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