What is a PunchOut Catalog?

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Reading Time: 6 minutes

VARStreet offers PunchOut-ready stores to grow your B2B ecommerce business.

A PunchOut catalog or simply PunchOut is a protocol that establishes a direct connection between the supplier’s website and the customer’s procurement system. B2B customers such as large business enterprises often depend on procurement systems (purchasing software) like Ariba, Oracle, SAP and SciQuest to manage their buying process. The protocol enables these customers to ‘punch out’ from their procurement application to directly reach the supplier’s catalog. Thus via PunchOut, the supplier’s catalog that is located at a remote site is easily accessible from the customer’s procurement interface.
PunchOut catalog enables suppliers to provide an Amazon-like shopping experience for its B2B customers. It allows customers to access their supplier’s site through a simple one-click interface. As a supplier, you have complete control over how you want to display your products to the supplier. Your B2B customers choose products from content-rich, pre-approved PunchOut catalog, without worrying about non-compliant and maverick spend.

 

  • Typical PunchOut Flow

typical punchout flow

A PunchOut catalog is also sometimes referred to as level 1 PunchOut catalog. Following are the steps involved when a B2B customer purchases products from the supplier’s site via PunchOut.

    • Customer logs into the company’s procurement system.
    • The customer searches and clicks on the PunchOut link to start the PunchOut session from within the procurement system.
    • The customer enters the supplier’s site and gets direct access to his contract catalog.
    • The customer selects and adds items to the shopping cart.
    • The customer logs out of the PunchOut session and the cart instead of checking out returns to the procurement system. The checkout flow in PunchOut is different from the globally familiar B2C checkout process to complete purchases.
    • The cart in the procurement application is then routed through normal requisition and approval process.
    • Upon receiving approval, a purchase order (PO) is created and electronically sent to the supplier.

 

  • CIF Catalog

Before the advent of PunchOut, suppliers were using CIF catalog to interact with their customers. CIF stands for catalog interchange format and was developed by Ariba in 1996. It is an electronic file format that was widely used by suppliers to transfer product-related information to their customers.

Prior to CIF development, customers had to convert file from one format to another in order to access and store information from suppliers. With CIF becoming standard electronic file format for communication, it became easier for customers to import information from supplier. However, CIF catalog has several limitations, some of which are given below:

    • A lot of manual work is required to import information into procurement system via CIF catalog.
    • Making small changes such as adding a new product in CIF catalog is a time consuming activity. For instance, suppliers have to re-publish the entire catalog and then submit it for every new item. Suppliers who have a small catalog and do not change their catalog content frequently may use CIF catalog.
    • CIF catalog has a line-data format, which cannot be used to represent product configuration. However, suppliers selling only simple products can use CIF catalog.
    • CIF catalog is a static product, which means real time communication between supplier’s site and customer’s procurement application is next to possible.
  • PunchOut Catalog

In order to overcome the disadvantages associated with CIF catalog, it is necessary to embrace cXML PunchOut catalog. PunchOut uses cXML to exchange information between the buyer’s procurement system and the supplier’s web-based catalog. Both cXML (commerce eXtensible markup language) and PunchOut have been developed by cxml.org industry consortium in 1999. cXML is a standard language used to transfer business documents between different systems. cXML is based on XML and uses XML schemas to electronically share structured data. XML PunchOut is also being used to integrate supplier site with procurement systems.

Some of the benefits of PunchOut catalog over CIF catalog include:

    • It allows the supplier to communicate directly and securely with the customer’s procurement application.
    • PunchOut website being a dynamic product supports real time transfer of data between systems. Hence PunchOut customers have real time access to product pricing and availability. Any changes in supplier catalog content are available to the customer in real time.
    • Products that require configuration can be included in PunchOut catalog. Suppliers can show product custom options which will enable customers to buy what they need. PunchOut catalogs are highly recommended when you are selling complex products.
    • PunchOut catalog can be updated whenever required. It is ideal for suppliers who have a large catalog and need to change their catalog content as often as possible.
    • Unlike CIF catalog, the supplier doesn’t have to create catalog content file for each customer. The supplier has to create just one master catalog and then connect to any procurement system with each customer having his own unique contract products and pricing. Thus, with PunchOut catalog, suppliers can use a single catalog across multiple platforms.
    • PunchOut catalog offers single sign-on feature, which enable the customer to use one set of login-credentials to access multiple sites. So once the customer has logged into the procurement system, there is no need to re-enter login credentials to start the PunchOut session. With a single click on PunchOut, the customer is automatically logged into the PunchOut site.
  • OCI PunchOut Catalog

SAP SRM, a supplier relationship management application uses OCI (open catalog interface) format, instead of cXML to accurately exchange information between the supplier catalog and procurement application. SAP SRM enables a business organization to better manage transactions with its suppliers.

OCI is a typical SAP standard format used for exchanging information between SAP systems. OCI  PunchOut ensures that the customer’s purchasing system is accurately integrated with the supplier’s webstore. While Ariba and other procurement systems typically use cXML for communication purpose, OCI is solely adopted by SAP procurement applications.

  • Level 2 PunchOut

Level 2 PunchOut

Although level 1 PunchOut simplifies purchasing process, things can complicate when the B2B customer is connected to multiple suppliers via PunchOut. In such a scenario, the customer has to browse through different PunchOut catalogs to locate the right product. To address this issue, level 2 PunchOut catalog was introduced.

Level 2 PunchOut mechanism makes it easier for customers to search and order products from multiple suppliers. With level 2 PunchOut, customers can use their procurement system’s search capabilities to find products. The customer can use the search function of procurement system to directly access a product. On the other hand, level 1 PunchOut offers search functionality only from within the supplier’s web-based catalog and not within the procurement system.

In level 1 PunchOut, the customer has to start the PunchOut session in order to access a product from the supplier catalog. With level 2 PunchOut, the product is already visible in the search results of procurement system. Upon clicking the product link, a PunchOut session is initiated and the customer is directed to the product.

  • Why Suppliers should support PunchOut Catalog

    • Increase your Chances of Winning Large Customers

Increase your Chances of Winning Large Customers

Suppliers offering PunchOut capabilities have several advantages, the most important being it can help to attract bigger customers. Large corporates and government entities are increasingly preferring suppliers who provide PunchOut. In fact, many business enterprises across the world have made it mandatory for suppliers to offer PunchOut when awarding new contracts. So providing access to a PunchOut can certainly help suppliers to drive new sales and growth.

    • Retain Business and Maximize Customer Loyalty

By providing PunchOut, you make it easier for your customers to do business transactions with you. Since PunchOut is a customer-specific ecommerce site, it offers a highly personalized shopping experience. The site will only contain contract items with pre-negotiated pricing as per the agreement thereby eliminating the need to wade through non-contract items. Moreover, you allow your customers to submit orders electronically. All this simplifies and speeds up the procurement and ordering process, which can translate into stronger customer loyalty and increased revenue for your business.

    • Increased Order Accuracy

Increased Order Accuracy

When the supplier makes any changes in catalog content such as pricing updates or discontinuation of product, they are immediately reflected in the system and available for the customer. Timely content updates to the customer is one of the biggest benefits of embracing PunchOut, which ensures order accuracy. As a supplier, you don’t have to worry about customers placing orders of out-of-stock or discontinued products.

    • Boost Upsells/Cross-sells

Apart from client-specific items, suppliers can also show related items in PunchOut catalog. You can give more information about your product offerings through recommended accessories, suggested items etc. You can offer discounts and even launch customized promotions for that specific customer in PunchOut catalog. So while your customer is adding items into shopping cart, PunchOut will allow you to show additional items that might be enticing to the customer.
Want to know in-depth about Level 2 PunchOut catalog, read the following article:

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