Austerity measures by heads of purchasing at large organisations is putting pressure on suppliers to support Punchout
Many of the largest buying organisations across the UK and Europe are demanding their key suppliers implement “Punchout” technology in their B2B ecommerce solutions.
…. so what does this mean?
Well in the quest to achieve maximum supply chain efficiency savings, companies in the private sector (typically large global and FTSE 250 scale companies) or public organisations (including local authorities, government bodies, universities, hospitals, etc..) typically with large purchasing budgets are increasingly turning to e-procurement through solutions such as Ariba, SAP, Oracle, SciQuest, etc… to purchase electronically from their supplier base with improved analysis and tighter financial controls on expenditure.
- What’s a Punchout Catalogue?
- It’s a special type of B2B ecommerce where the customer’s e-procurement or finance system (e.g. Ariba, SAP, Oracle, SciQuest, etc..) can automatically log in to their specific product catalogue using a punchout protocol (e.g. cXML,. OCI), build a basket of items but instead of checking out in the normal way the items are transferred back into the customer’s system to build a purchase order without any rekeying of data. The customer can then approve the purchase order internally through their normal process and then send an electronic order back to their supplier.
Punchout – a supplier opportunity or threat?
Organisations awarding suppliers new contracts are therefore increasingly specifying Punchout as a mandatory requirement to help reduce their associated costs of purchasing. A supplier supporting purchasing through punchout is typically viewed as being 15% cheaper than a competitor who does not.
For many suppliers, this technological change in procurement is forcing them to either invest in a new B2B ecommerce solution or purchase a stand-alone Punchout solution, those suppliers put off by the cost are ultimately depriving themselves of the most lucrative customers. For others who’ve been quicker to adapt and integrate with these new purchasing technologies, they have actually transformed this development into a distinct competitive advantage, in many cases helping them to retain or win new lucrative deals with large customers, beating suppliers who’ve been slower to engage.
Key benefits of embracing Punchout
- Win new tenders with bigger organisations – buying organisations look with favour on companies who can collaborate with their purchasing technology. If you’re a supplier with this capability then it immediately lifts your bid to a winning advantage.
- Retain contracts for longer periods –suppliers who are able to tightly integrate with their customers purchasing technology can cement their relationships so they become longer lasting relationships– it is true that Punchout makes suppliers sticky.
- Obtain presence on the purchasing systems of your buyers – it’s a no brainer that the key benefit of achieving a permanent presence on the buyers purchasing screens (especially if the buying organisation is adhering to a strict approved supplier only process where “maverick” spending with non-approved suppliers is prohibited) can hugely assist suppliers in selling more.
- Streamline the selling/buying process to everyone’s benefit – e-procurement can save the buying organisation upwards of 15% in attributed purchasing costs and the costs for suppliers who successfully achieve punchout are of course reduced to their benefit also. Punchout can indeed be a win, win scenario.
Over 15 years of Punchout experience
Netalogue have over 15 years of Punchout experience connecting suppliers across a diverse range of industry sectors to major well-known global buying organisations. We recognise each buyer’s e-procurement system is setup differently and these variations can often make the Punchout connection process for suppliers difficult. Netalogue handle this to make the process smooth and provide Punchout catalogue solutions of all sizes and complexity with administration options available for your team ranging from a simple spreadsheet or dashboard to real-time integration with your own ERP and financial systems.
To Find Out More
If your company requires a Punchout catalogue solution please contact us at firstname.lastname@example.org or call +44 1639 816130. The typical Punchout specification process is usually completed within a few phone calls and emails. This will establish which purchasing system the buying company is operating, such as Ariba, SAP, Oracle, Sci-Quest, Science Warehouse, Unity, etc.. It will also establish what products or services you need to represent and how you would like to maintain them. We can setup links to standard spreadsheets like Microsoft Excel or integrate the solution with your current systems. From there, we will build your Punchout solution, accommodating tight deadlines if necessary.