One of the fastest growing B2B sales channels is eProcurement, which leverages ecommerce stores integrated with a buyer’s eProcurement system via punchout catalogs.
In 2021, eProcurement accounted for 8.5% of all US digital commerce sales and 7.1% of total B2B sales.
eProcurement platforms can automate many procurement processes that would once have involved manual processing, from selecting goods through order approval, creating purchase orders and invoicing.
Businesses have adopted eProcurement platforms like SAP Ariba, Oracle's PeopleSoft and Jaggaer because they offer accountability, control and insight into purchasing processes. With an eProcurement solution, they can rationalize and streamline procurement, discovering cost efficiencies that reduce procurement spending.
Punchout catalogs have grown in popularity primarily because of their ability to integrate supplier ecommerce stores with buyer eProcurement platforms seamlessly. They allow buyers to shop on supplier ecommerce stores from within their eProcurement platforms, with purchase order and invoice data automatically exchanged between buyer and seller.
Procurement is a strategic function for modern businesses — disruptions to the supply chain impact revenue, profit and even the company's viability.
The procurement process itself is often expensive and inefficient. Businesses adopt eProcurement to take control of spending but face challenges when integrating suppliers with their chosen platform.
Punchout catalogs can alleviate these challenges, empowering B2B sellers to integrate their products with their buyer's back-end platforms. They allow buyers to access supplier catalogs from their eProcurement platform, automatically synchronizing requisition and purchase order data between eProcurement and B2B ecommerce solutions.
Punchout catalogs make it easier for buyers to search, browse, compare and buy products from supplier ecommerce stores without leaving the controlled environment of their eProcurement, spend management or enterprise resource planning (ERP) application.
Punchout catalogs work via an integration between an eProcurement platform and an ecommerce application, allowing order data to flow seamlessly over the Internet between buyer and seller.
Integration of buyer and seller platforms can be challenging because of the number of potential platform combinations. There are dozens of eProcurement, spend management and ERP platforms.
The communication protocols and APIs used by these platforms are often incompatible. Common protocols and formats include cXML Punchout, XML, OCI, EDI, iDOC, CSV and email.
Punchout catalog integration depends on software that “translates” between each platform. There are two approaches to integration:
1. Custom Integrations.
2. Cloud gateways.
For custom integrations, a seller and a buyer cooperate to build and host software that lets ecommerce and eProcurement platforms talk to each other. A typical custom integration takes several months to coordinate, code, test and deploy.
The alternative to custom integrations is a managed cloud gateway that mediates communication between platforms. The gateway is in the cloud and built, managed and hosted by a third-party integration provider. The provider ensures that the gateway can ingest data from various ecommerce and eProcurement platforms, mediating communication between otherwise incompatible systems.
A managed punchout gateway makes it easier and cheaper for suppliers and buyers to provide punchout catalog facilities for any ecommerce application and eProcurement platform.
A punchout website is an instance of a seller’s ecommerce site that is available and manageable from within the buyer’s eProcurement platform. They are ecommerce sites hosted and managed by the seller but accessed via the buyer’s platform.
Punchout catalogs rely on the integration of the buyer and seller platform.
In the case of a managed cloud integration gateway, the gateway handles data interchange for authentication, purchase orders, invoices and more.
A punchout website allows buyers to manage procurement within their eProcurement platform without having to import and host seller catalogs — the catalog is hosted and managed on the sell-side and affords all of the benefits of a personalized ecommerce store.
From the perspective of the buyer, the punchout process looks like this.
1. The buyer searches for a suitable pre-approved supplier in their eProcurement platform.
2. They choose a supplier and are immediately forwarded to the supplier’s ecommerce store.
3. Authentication is handled automatically, and the buyer is logged in to their account on the ecommerce store.
4. The buyer chooses products for their cart as usual. The seller retains control of the ecommerce catalog and can present a custom product selection and personalized discounts to the buyer.
5. When the buyer is finished, instead of checking out, they punchout — meaning that order data is automatically transferred to the eProcurement platform for approval.
6. When the order is approved, a purchase order is created in the supplier’s ecommerce store.
In the past, the buyer may have used a catalog hosted on their infrastructure, but this approach had numerous drawbacks. The hosted catalogs were often out-of-date and provided a less user-friendly experience than an ecommerce store.
Punchout catalogs have become popular because they integrate supplier eProcurement and buyer ecommerce platforms without compromising the user experience.
Punchout catalogs allow B2B suppliers to integrate their catalog with buyer back-end platforms with minimal labor and expense.
Unlike manual catalog imports, punchout catalogs are always up-to-date and transfer data between platforms without the errors that often plague manual transaction processing.
When a buyer uses a punchout catalog, they are essentially visiting the supplier’s ecommerce store, and any changes made are instantly reflected in the interface used by the buyer.
The buyer benefits from real-time product availability, pricing, discount and availability data without the maintenance burden of importing and hosting a catalog.
eProcurement helps businesses manage spending by consolidating procurement data and processes.
However, without integration between a transaction's buy-side and sell-side, it is impossible to take full advantage of eProcurement. Mid-sized organizations often have to manually process thousands of transactions each year, with all the associated costs.
In addition to providing up-to-date product data, punchout catalogs streamline data interchange between platforms and automatically synchronize buy-side and sell-side platforms — freeing procurement employees to focus on generating value for their organization.
Manual order processing introduces expensive errors, including duplicate orders, mistakes in pricing, quantity, and delivery schedules, misconfigured products and more.
Punchout catalogs automate many sources of error, ensuring that accurate data is available to buyers and sellers.
As eProcurement becomes more widespread, buyers preferentially select suppliers capable of offering punchout catalogs and B2B automation.
A supplier who can quickly and reliably provide a punchout solution integration has a competitive advantage. Punchout catalogs reduce procurement costs for both supplier and buyer, which is why many suppliers offer discounts to buyers who are prepared to integrate.
Typically, the buyer leads punchout integration projects, but B2B commerce businesses can take the initiative by partnering with an integration provider and marketing their ability to provide punchout facilities.
Discounts are also possible because automation reduces processing and staffing costs for both the buyer and the seller.
Through the use of punchout catalogs, businesses have greater ability to decide how and where users are able to shop. This includes pre-selecting vendors, establishing pricing and selecting the product catalog.
By having more control over what your shoppers are accessing, you can more easily identify fraud when it arises — from payment requests to catalog misidentifications.
As eProcurement adoption grows and buyers seek to enable their suppliers to integrate, sellers can increase the likelihood of being selected by laying the groundwork for smooth integration through the following:
A B2B ecommerce business is well-placed to offer punchout catalogs via a third-party integrator, but processes must be in place to facilitate fast integration.
B2B ecommerce businesses should prepare sales and marketing staff with training and sales enablement material that equips them to negotiate with buyers.
Buyers want to see that their suppliers take integration and punchout catalogs seriously and that they can provide punchout catalogs without extensive support and onboarding.
Punchout catalogs can only be as effective as the seller’s ecommerce platform.
B2B ecommerce businesses have much to learn from their colleagues in consumer retail concerning ecommerce search, personalization, and conversion rate optimization. They should strive to ensure that their ecommerce platform offers an experience comparable to that of consumer ecommerce.
As millennials who grew up with digital retail come to dominate procurement departments, there is increasingly less tolerance for complex and frustrating procurement experiences.
Your B2B customers may be using any one of dozens of spend management and eProcurement platforms, from industry leaders like Coupa and SAP Ariba to custom platforms.
Sellers who cannot adapt to their buyer’s platforms are disadvantaged.
It is not cost-effective to create custom integrations for every buyer who might want them. However, a B2B ecommerce business can provide seamless integration between their store and any eProcurement platform via a managed gateway.
A punchout catalog and an ecommerce store are essentially identical in the modern ecommerce era.
Punchout catalogs are built on ecommerce applications such as BigCommerce. An ecommerce application is transformed into a punchout catalog with an integration layer that handles communication between the ecommerce application and an eProcurement platform.
A supplier that offers punchout catalogs as their only digital sales platform cuts themselves off from buyers who prefer ecommerce.
Many B2B buyers rely on eProcurement, but not all. Some of those who do use eProcurement may decide not to integrate their smaller suppliers.
An additional benefit of ecommerce is discovery.
According to WBR, B2B buyers are 57%-70% through their buying research before even contacting sales. An ecommerce store that lists products and can be browsed by anyone is an essential online marketing tool — without it, you won’t appear in Google search results.
For B2B suppliers, the most successful approach to digital retail is hybrid, providing both ecommerce and punchout catalogs.
B2B punchout catalogs help to overcome many challenges by allowing buyers to make purchases on the supplier's website without having to leave the procurement system. Where implementing punchout catalogs once required expensive custom integrations, today, a managed cloud gateway takes care of the heavy lifting.
With the help of BigCommerce, you can install punchout plugins onto your ecommerce website to connect with your customer's eProcurement system — crafting an integrated, streamlined shopping experience.
The answer to this question depends on what you are looking for. Most businesses that offer punchout integrations provide customizable and tailored products designed to fit your specific needs and wants.
If you are unsure of the costs, a free trial can help you decide if a punchout is ultimately worth it. For larger businesses looking to connect to thousands of eProcurement platforms and suppliers, that choice will likely be in the affirmative.
The term “punchout” was coined by SAP Ariba in 1999 because users then had to punch out their procurement application to access a supplier’s catalog, then punch in to process the order post-checkout.
Since then, the term has stuck even as the process has become more streamlined.
Any business looking to save time on workflows and ease the turnaround on electronic purchase orders should look to punchout catalogs, from B2B organizations to wholesale distributors and suppliers.
With punchout catalogs, you can control spending with a streamlined, simplified eProcurement system.