In some ways, making products is easy, and selling items is hard. Not only do you need to convince people to buy them, but you also must ensure your pricing is accurate, that you keep track of inventory, and that order fulfillment is timely. All these functions require software that can allow you to multitask and drive customer experience.
Part of the challenge that most businesses face in selling their products is the huge amount of data that it consumes. Often, ordering is kept in one location while stock data is kept elsewhere, and the tools you need to ship items out to customers could be in a third. This is especially true if you have older software products or your business has outgrown its current solutions.
In this article, we will look at the software side of product sales. And although your business may sell some items to consumers, we will focus our attention on B2B product sales. By the end of our discussion, you will see that the better integrated her software is, the less error-prone your process will be, and the last back office work your staff will have to do. At the end of the day, the right software solution, properly applied, can save you a lot of money. As an added bonus, the customer experience will be much better, which can also increase your sales.
B2B eCommerce Integration: How It Works and Why You Need It
As we mentioned above, our focus right now is on B2B sales. Businesses behave a lot differently from consumers because they buy a lot of goods and services. In addition, there’s a lot more due diligence to ensure that what they buy is the right item. However, what’s more important here is their expectations in terms of contract management, fulfillment of their order, and payment terms.
In order to meet B2B customer expectations, it’s important to have your data in one place. That’s not to say that everything has to be in one computer program because that might make your process too cumbersome. However, communication is important in software, just as it is between members of your human team. With that in mind, let’s talk about B2B e-commerce integration.
What is a B2B eCommerce Integration?
A B2B e-commerce integration is a process whereby your e-commerce software is interfaced with other parts of your sales infrastructure. In particular, your B2B e-commerce solution should be able to communicate with your inventory, sales, marketing, and accounting software. This way, your staff does not need to manually keep track of every item in your warehouse. Likewise, they don’t need to worry about which payment methods are used or about sending out a bill manually. And in addition, sales and marketing get the information they need to plan.
Of course, this data integration should also include warehouse fulfillment. In other words, ideally, you want the B2B customer to place an online order and then have that order set directly to the warehouse. This reduces the level of delays and enhances customer experience. Remember, for a business customer, having predictability for fulfillment is an important part of their overall supply chain management.
Why should you do B2B eCommerce Integration?
The biggest reason that you should do B2B e-commerce integration is that you can process more orders more quickly and have your employees spend a lot less time doing paperwork. The biggest challenges that companies face include keeping track of every aspect of a customer’s order.
Think about this for a minute — when somebody places an order, whether it’s as a business or consumer, they must select the item including all options, the number of items, continue to do this for each item they want, and then go to shipping and payments. When they reach their carts, they must select or enter a shipping address, a billing address and designate a payment method.
If the company decides to pay with a purchasing card or a corporate credit card, then the transaction information goes to your processor and their bank for payment approval. Your accounting department will need a copy of the transaction so they can reconcile accounts later. For a purchase order, it gets a bit more complicated. The transaction will need to be reported to accounts receivable so they can bill your customer and log the payments.
Likewise, transaction information will have to go to your warehouse for fulfillment, including the purchase of shipping services to your customers’ delivery location. The items must also be taken out of your warehouse inventory, so it doesn’t get sold twice. And finally, sales and marketing need information about what customers are buying, who is buying them, and what quantities. This information helps you enhance your sales and marketing efforts to increase revenue further. You can even adjust pricing based on what customers are willing to pay or upon the demand of your item.
Keep in mind that without data integration, your staff will have to do much of this work manually. Manual work can range from transferring data from one system to another using flash drives, all the way to manually keying information from one place to another. Not only does this slow you down, but it costs a lot of money.
Benefits of B2B eCommerce Integration
For companies that do B2B sales, there can be a lot more benefits to integration than simply saving money and time. Not that these aren’t important, but they only scratch the surface of how you can maximize your B2B e-commerce platform through integration.
Here are some other benefits of having all your software programs talk to each other:
- Better inventory tracking. Although your e-commerce software can’t do all of your inventory management, it can help you track what has been sold. Then, along with your system for acting inventory, your e-commerce software will know just how much you have to sell at any one time. This way, you can avoid missing out on sales because the customer thinks you’re out of something when you aren’t.
- Increased data accuracy. When your data is being gathered in real-time and then sent to the other relevant programs automatically, there’s less potential for human error. This is true even if you need to manually transfer the data, so long as you can transfer it in bulk and without manually handling the individual data points.
- Easier financial statement preparation. Although you’ll still need to check your data for errors and omissions, having it automatically reported means that you would find everything in one place. Then, you can get an accurate picture of your revenue from inventory sales much more quickly.
- Better strategic planning. Because your numbers are better, it’ll be easier for you to analyze your sales figures and make plans for the future. For example, if you’re always running out of something long before the new stock is ready, then there’s a good chance you should be making more of them. Likewise, if you have an unprofitable item because it doesn’t sell, you might need to consider discontinuation.
- Improved tax preparation. Again, having everything in one place make your life a lot easier. You can quickly look at how much money your company took in and then combine it with cost information to calculate profits. Having a top-notch procurement software solution will help you with the second part.
- Make better use of your employees’ time. Especially in an environment where we have a labor shortage, it’s important to maximize the efficiency and effectiveness of the employees you have. Part of this involves making sure that they don’t do repetitive, redundant work that’s unnecessary. Automated data integration helps you achieve this goal.
In other words, your business will be run much more efficiently with data integration in place. In addition, you’ll have fewer worries about reporting and other covenants violations because it will be much harder for your financial team to make mistakes.
Challenges of B2B eCommerce Integration
Of course, like anything else in business, there are challenges to B2B e-commerce integrations. One of the biggest problems that B2B companies face is that computer systems tend to be more complex. In addition, these companies are more likely to use custom software and other proprietary items that are far different from the off-the-shelf B2C e-commerce solutions.
For example, B2C ordering is much simpler because there’s usually no option for purchase orders. Additionally, depending on the B2C business, other features like tax exemptions may be more limited. In other words, B2C ordering systems typically have less information stored in them that must be tracked.
Another concern is software compatibility. Software vendors can’t always make their solutions compatible with every system. This can sometimes be true even if every piece of software your company uses is an off-the-shelf SaaS or installed product.
Similarly, you and your team must decide which programs to integrate. For instance, it might make sense for your sales software to prepare shipping labels automatically. On the other hand, you might find that the shipping issue is too complicated for an automatic process. This can be especially cumbersome when there are significant supply-chain issues that impact the availability and price of shipping services.
Key Takeaways
Integrating your B2B e-commerce platform with other software at your company typically saves your firm a lot of time and money. In addition, you can enjoy more accurate reporting and better planning because there is less opportunity for data loss and reporting delays. You can even use this valuable data to integrate more dynamic and profitable pricing.
Unfortunately, integrating your company systems isn’t always trouble-free. Sometimes, you’ll find that the IT department needs to patch together an integration system or that you’ll need to change some of your software to make everything work better. However, the benefits of a high-quality integration are well worth the trouble for most companies.
Methods of B2B eCommerce Integration
It’s one thing to talk about the importance of integration and another to implement it. The first step toward implementing data integration is understanding your various options. Some of these options are simpler than others. In some cases, you can upload files from one piece of software to another, while others might require some coding to implement. With that in mind, let’s look at the different options and how they work.
Real-time (API)
Your first option is to integrate information in real-time. Typically, you would use an Application Programming Interface, or API for short. Many modern e-commerce solutions have some form of API already built in. For that matter, API integrations are a common feature of business software. ControlHub, for example, has API support for QuickBooks. This lets users know immediately when something was purchased, when the bill is due, and what the payment was for.
Using an API allows for effortless synchronization of data. For instance, when your customer buys something on your website, an API would tell your fulfillment provider, your accounting software, and your inventory management system. This would ensure that the warehouse knows an item has been sold and where to ship it, your accounting software to expect a payment from the bank, and your inventory on how many unsold units it has left.
Likewise, an API is one of the best safeguards against human error. While there’s still opportunity for trouble, such as when a customer cancels an order through your customer service line, the potential for error is minimized. Therefore, while an API isn’t always the best choice and is occasionally incompatible with certain software, it’s an increasingly popular method of integration.
Scheduled (SFTP or API)
Not all data needs to be synced simultaneously. And in some cases, batch processing is better than real-time processing. For example, merchants often need to do a process called “batching,” which sends credit card transactions to the processor so that the merchant can get paid. While it’s possible to batch transactions once a day or even once a week if your e-commerce site is busy, there’s a chance you’ll do it more often. Either way, the idea is that you’re not sending that information to your processor simultaneously.
Of course, batching credit cards is just one example. There might be other data sets that should be forwarded to the next application, or to a data processor, in groups. Programs can perform this bulk data transfer using an API. However, you can also do it through a different process called “Secure File Transfer Protocol,” also referred to as SFTP. Essentially, this is a form of file encryption that makes it safe to transfer information over the Internet. Therefore, if you have information that needs to be kept more secure, it might be smart to choose SFTP instead of an API.
With that said, if you need to send information in batches, you can still use an API. You should select the process based on the data type, the recipient, and any other factor that could be relevant.
Manual (CSV file upload)
Finally, you can use a CSV file to transfer information from one application to another. This is arguably the oldest form of integration because all you really needed to do was use a portable data storage device. And while the original data storage devices didn’t hold a lot of data, they were still effective for small tasks like moving a small number of files from one computer to the next in the pre-Internet era.
Now, of course, the manual transfer process is different. Certainly, there are situations where you will use a USB thumb drive or maybe an external hard drive to transfer data from one computer to another. You have a computer that doesn’t use the Internet and that runs a particular application.
More commonly, however, the CSV file will get moved from one place to another using the cloud. In this case, the file transfer would be manual and on demand. The trouble, of course, is that if your employee forgets to make the transfer and the destination application will be missing an important data set.
Key Takeaways
As with many other things in technology, there’s more than one way to accomplish integrations between one computer application and another. All methods have their advantages and disadvantages, and some are more difficult to use than others. You can almost always use a CSV to transfer data, but in many situations, this is a very clumsy method. On the other hand, using an API or SFTP is often more efficient. No matter what integration method you choose, however, it’s still far more efficient than the old-fashioned manual method of keying or copying information from one aspect of your business into another.
Common Integrations and Examples
With all that said about integration types, where can business owners use this technology? Strictly speaking, you can use different data transfer methods for a wide variety of information systems. However, there are some integrations that are very common, especially in an e-commerce solution. Many of these also work well with old-fashioned procurement systems, modern software like ControlHub, and other business units. Let’s look at a few of these.
ERP Integration
Firstly, most companies will integrate their B2B e-commerce solution with their ERP software. Briefly, the acronym ERP stands for Enterprise Resource Management. This class of software includes procurement, accounting, supply chain, compliance, and risk management. In other words, your ERP software keeps your company working and out of trouble.
Naturally, integrations between ERP software items both save employees a lot of time and help your company minimize risk. For example, procurement has a lot of compliance concerns, from honoring international sanctions to avoiding conflicts of interest and fraud.
Likewise, your supply chain solution must know if there are any fulfillment challenges, such as a large ship stuck in the Suez Canal. Then, that software needs to tell other parts of your operations not to depend on the shipment arriving. This way, they can adjust to account for the shortage.
Luckily, with high-quality new SaaS software, the integration options are already built-in. On the other hand, for legacy systems that your business still uses, you may need to build an integration pathway or use the manual method.
CRM Integration
Another common integration between e-commerce software and other business applications is with a CRM. This is unsurprising when you consider that B2B sales are very relationship based. Even with B2C brands, building and maintaining customer relationships helps to boost sales over time. When a company’s CRM and order management software are integrated, it gives the sales and marketing departments an opportunity to continue nurturing the relationship.
Besides the nurturing of existing relationships, a B2B e-commerce solution can help sales and marketing with customer outreach. For instance, if a customer buys things from your company frequently, you might see if they’re interested in giving a testimonial. This can help you reach new customers with your brand message and, hopefully, turn them into customers.
PIM integration
Keeping a close eye on what sells and whom it sells to is valuable for companies in so many ways. Not only does a company get a list of customers, but it also can see what each customer buys. Ideally, an e-commerce brand should know what demographic its customers come from.
For a B2B brand, this would mean knowing something about a decision-maker but also understanding what industry each business belongs to. This helps the sales and marketing departments tailor their sales pitches to maximize revenue. On the same note, understanding the consumer base also helps with pricing.
Likewise, is often good to get your brand’s sales and marketing assets in one place. This can be something as simple as a logo or other components for social media marketing. As with inventory and other related e-commerce tasks, there are a lot of benefits to having everything in one place.
To achieve these goals, many small companies deploy a PIM integration. There are two types of PIM. One of them only stores customer information, including the details of each transaction, such as what type and color of each product they bought. The second one includes a company’s sales and marketing assets. Either way, the right integration solution can really enhance a company’s sales and marketing efforts.
Shipping Integration
When you start out with an e-commerce platform for the first time, this is one of the first integrations you will probably do, along with accounting and payment integrations. Simply, integration between your shipping system and order-taking software will allow your fulfillment staff to get orders out the door faster. You can even keep track of the costs for shipping, allowing you to adjust pricing for those services quickly.
Punchout Integration
One of the newest tools in E-procurement and B2B e-commerce is called punchout catalogs. Of course, it’s easy to ask, “what’s a punchout catalog?” Simply put, punchout catalogs are a great way to make everyone’s life easier in procurement. It is a new tool that is beneficial to both suppliers and buyers alike.
Punchout catalog, defined.
Think about a punchout catalog as a mixture of your procurement software and the Sears catalog. It is a way for procurement staff to see what is on your website, from your website, without leaving their procurement software. For example, is your potential buyer needs to get 10 drones for the next photography project, they can find out how many you have almost instantly.
How does that work? Plan a potential buyer searches for drones, or whatever also looking for, their procurement software will give a list of suppliers who manufacture or sell drones. These suppliers have already been approved by procurement, meaning that they have a relationship with you, or at least that procurement is okay with employees spending the company’s money at that shop.
Once a procurement professional selects from the supplier list, punchout access to the supplier’s website begins. Then, the buyer will immediately see which drones you make, which ones are in stock, and how much they cost. The buyer will also be able to view the same product page as any other buyer would — essentially, they fuel your entire website from within their procurement system. Usually, this integration type is seamless.
After the member of staff chooses the drone that fits their company’s requirements for the right price, they will add it to the card on your website. However, they won’t check out directly from the website. Instead, they’ll check out from their procurement software. In this case, checking out takes the form of requesting approval for the purchase of their supervisors if necessary. If not necessary, they’ll have an automated approval in the system. Your buyer’s procurement software, once it has approval for the purchase, will send you an automated purchase order. Then, you will process the order as you would with any other procure to pay context.
Advantages of a punchout catalog for suppliers
If you aren’t sure that punchout catalogs are beneficial, read on. Both when it comes to buying products for your company and selling them to B2B customers, punchout catalogs are the latest and greatest tool to boost your company’s profitability.
For suppliers, punchout catalogs are some of the best ways to drive sales without additional marketing support. That’s because you will supply catalog access to a business after they register for it with your company. In other words, a company will only have access to your punchout catalog if you are already an approved vendor, meaning that you’ve already gotten their attention.
To that end, here are the other advantages to using punchout catalogs as a supplier:
- Ease of ordering enhances customer loyalty. In other words, a buyer doesn’t have to chase down items like purchase price information before they make a purchase, so they’re more likely to buy your product.
- You don’t have to manually update pricing information, availability, or your product line with customers. Instead, they will see the new information in their system as soon as you change it on your website.
- Invoicing is much easier. That’s because when a buyer makes an order through their procurement software and a punchout catalog, the purchase order is automatically generated. Then, you just need to issue an invoice like you would with any other P2P transaction.
- Upselling and cross-selling are enhanced. For example, a customer might find that you have an adequate drone and a drone with enhanced features. Both are suitable for the company and inside their budget, so they might buy the more expensive item. Without a punchout catalog, they probably would’ve bought a cheaper drone by default.
- If you’re running a promotion, regular customers can benefit. That’s because was full access to your website comes the opportunity to use discount codes or other limited-time offers. As a result, your customers will not only save money but have a good feeling about getting a better deal.
As you can see, there are a lot of benefits to using punchout catalog integrations as a supplier. Not only will you serve your customers better, but you’ll probably make more money.
Advantages of a punchout catalog for customers
Of course, punchout catalogs aren’t only beneficial for suppliers. They’re also a great tool for purchasers.
Let’s look at this point in more detail:
- Purchasing managers and procurement personnel can save a lot of time. Flipping through one online catalog after another to find the best price takes a lot of time. In addition, the paperwork takes a lot longer when there isn’t a punchout catalog and integration with a company’s P2P system.
- It’s easy to see whether or not they’re getting the best deal possible. One reason for this is that the punchout catalog displays current prices and discount codes in real-time. Therefore, if pricing diverges widely between a negotiated rate and the online catalog price, the client will know it’s time to talk about that contract. Likewise, they’ll know if they’re getting the right deal.
- Improved compliance, costing, and financial controls. That’s because punchout catalogs help to curb rogue spending, identify problems in the system, and ensure that accounting knows exactly what was spent on the company’s dime.
- Find alternative suppliers more quickly. If the first supplier, who usually has a certain item in stock, has a backordered item or discontinued something, the punchout catalog system can help them find an alternative source more quickly. And because all suppliers with punchout access our approved by management, they can get the approvals finished and the supplies on the way sooner.
Key takeaways
Here’s the thing — integrations are good for business, whether you’re the customer or the supplier. The right e-commerce integrations can help a company find the right supplies at the right prices, learn about their customer’s spending habits, reduce staff workloads for otherwise highly manual tasks such as accounting, to a better job at marketing and sales, and plan for the future more efficiently. In other words, in our modern context, integrations are critical for any e-commerce brand, including the B2B sector.
Must-have supplier integrations for hardware-centric, procurement-heavy startups and mid-size companies.
McMaster-Carr
Who’s McMaster?
McMaster-Carr is one of the leading sources of industrial parts, offering an impressive selection of products ranging from the mundane and small to the complex and large. From single components to custom-made systems, they have the parts and pieces you need for any application.
The quality and reliability of their products is unmatched, making McMaster-Carr one of the top three sources for industrial parts and pieces.
What’s Punchout?
Integrating a Punchout Catalog into a company's existing procurement system offers many advantages. It saves time and money by streamlining the purchasing process, and it helps ensure accuracy by automatically adding purchase orders to the system.
This can lead to improved customer service, as customers can shop, select, and purchase products with confidence that their orders will be quickly and accurately processed.
Additionally, since the Punchout Catalog is integrated with the company's existing system, there is no need for manual data entry, meaning data accuracy is improved throughout the entire purchasing process.
How to integrate your company’s Procurement Process with McMaster-Carr?
By using ControlHub, the most intuitive purchasing software for hardware companies, these companies can automatically access Mc-Master PunchOut to streamline their purchasing processes.
With McMaster PunchOut, hardware companies can:
- Access a wide range of hardware products from McMaster-Carr
- Get real-time pricing and availability
- Place orders directly from their ControlHub account
→ Click here to see how the McMaster and ControlHub integration work
Digi-Key
Who’s DigiKey?
Digi-Key is the go-to global distributor for board-level components, semiconductors, passives, interconnects, electromechanical, power, batteries, and sensors. With a massive selection of over 1 million products from more than 2,300 suppliers, customers have access to a variety of options. The company also offers competitive prices and fast delivery, making them a great value for customers from all around the world.
Digi-Key's exceptional customer service and global reach in over 170 countries have made them the go-to distributor for engineers from companies of any size. Not only do customers have access to their extensive selection of products, but they also get fast delivery, competitive prices, and excellent customer service. Digi-Key is the perfect solution for all your needs.
How to integrate your company’s Procurement Process with Digi-Key?
ControlHub is the perfect choice for hardware businesses that are looking to streamline their purchasing process. Its user-friendly platform and range of features give companies the ability to save both time and money.
Companies can search for products quickly and create orders in one click, track and manage orders, and much more. This allows businesses to have greater control over spending, enabling them to reduce costs and become more organized.
ControlHub offers even more benefits beyond those related to time and cost. It provides companies with the ability to analyze their purchasing data and uncover trends, which can be used to make more informed decisions. This helps businesses to better understand their spending and make sure they are getting the best value for their money.
Furthermore, ControlHub allows companies to quickly and easily access product information and compare prices across suppliers, ensuring they are getting the best possible deal.
With DigiKey PunchOut, hardware companies can:
- Access a wide range of hardware products from Digi-Key
- Get real-time pricing and availability
- Place orders directly from their ControlHub account
→ Click here to see how the Digi-Key and ControlHub integration work
Mouser
Who’s Mouser?
Mouser Electronics has established itself as a global leader in the design, manufacturing and delivery of electronic components, semiconductors and related products. Their vast selection of components enables them to serve a wide range of industries such as automotive, aerospace and consumer electronics.
To ensure they are providing the highest quality components at the most competitive prices, Mouser has developed a global network of trusted suppliers and partners. Furthermore, their team of highly-skilled engineers provide incomparable technical expertise and design support.
How to integrate your company’s Procurement Process with Mouser?
ControlHub is the ultimate purchasing solution for hardware companies. It offers an intuitive interface, single sign-on, and direct access to the Mouser PunchOut Catalog.
Automated order synchronization, powerful management capabilities and detailed analytics enable businesses to make better decisions and gain deeper insights into their purchasing and inventory operations.
This results in the optimization of procedures and an increase in efficiency. ControlHub also simplifies the purchasing process by providing a central system to create, monitor, and modify purchase orders with real-time updates on order and delivery completion. It additionally streamlines administrative tasks such as the reconciliation and tracking of supplier invoices.
ControlHub is the best choice for hardware companies looking to streamline their purchasing process and gain greater insight into their operations. With its intuitive interface, single sign-on, automated order synchronization and powerful management capabilities, it provides the ultimate purchasing solution for hardware businesses.
With Mouser PunchOut, hardware companies can:
- Access a wide range of hardware products from Mouser
- Get real-time pricing and availability
- Place orders directly from their ControlHub account
→ Click here to see how the Mouser and ControlHub integration work
Amazon
By integrating your company's procurement process with Amazon PunchOut via ControlHub, you can unlock significant time, resource, and monetary savings.
The convenience of accessing the Amazon PunchOut catalog is just the beginning; ControlHub as your purchase requisition software also allows you to request, approve and track purchase orders in real time, making more informed purchasing decisions. Moreover, the platform eliminates manual data entry and tracking, so you can prioritize speed and accuracy simultaneously.
With ControlHub's streamlined procurement process, you can enjoy the benefits of cost-effective resources. You can also take advantage of advanced analytics which can help you assess the cost-effectiveness of different items.
How to integrate your company’s Procurement Process with Amazon?
By using ControlHub, the most intuitive purchasing software for hardware companies, these companies can automatically access Amazon PunchOut Catalog to streamline their purchasing processes.
With Amazon PunchOut, hardware companies can:
- Access a wide range of hardware products from Amazon
- Get real-time pricing and availability
- Place orders directly from their ControlHub account
→ Click here to see how the Amazon and ControlHub integration work
Punchout Support Protocols
Punchouts are great, but how do they work? Isn’t that a lot of data going from one computer to another?
Well, yes. It’s a lot of data. And in addition, data comes in many different formats across operating systems, companies, and even business units. In addition, sometimes a company’s catalog will be primarily in another language.
That’s where support protocols come in. They act as a sort of translator and automatic mailbox between two companies computer systems. There are several protocols that companies can choose from, each of which accomplishes the task of facilities income communication between companies and their suppliers.
Let’s look at the major protocols.
EDI
The largest and oldest data transfer protocol for computers is called the EDI. That stands for electronic data interchange. It was developed in the 1960s when computers were still in their infancy and rather expensive. The idea was to be able to move information from one computer to another in a play that made it easier for both computers to understand. Nowadays, the EDI has again become a staple of inter-business communication.
What is EDI?
EDI, at least as it’s applied between computers, is a way to minimize the use of postal mail, fax, and email to exchange documents. At the same time, it serves to minimize the potential for human error that’s inherent in older methods of ordering, invoicing, and payment. However, in order for this to work, have to be certain parameters.
First, the EDI protocol only works with business documents. There are set allowable document types, such as purchase orders, invoices, and shipping notifications. So, if you want to buy something cool for your personal hobby, you can’t use an EDI protocol between your personal computer and your favorite hobby catalog. One reason for this is that standardized EDI documents do not accommodate the immediate payment that you would get with a B2C sale.
Second, the EDI system is very precise. Although there are several EDI document standards, exchange over EDI networks requires that both the sender and recipient of a document are using the same protocol. In other words, both parties must agree on which EDI protocol to use.
On the other hand, businesses don’t necessarily have to do the document conversion themselves. There are commercial EDI translators that businesses can leverage to stand documents in whichever protocol is agreed on by the recipient. This way, businesses aren’t locked into using one protocol or another. Instead, the translation service makes sure that they’re always in compliance.
From a less technical standpoint, the EDI system is a major timesaver. It’s also a relatively easy way to boost record accuracy, speed up transactions, and reduce the potential for miscommunication. In other words, when your team doesn’t need to do everything by fax or email, or even old-fashioned postal mail, commerce can move at a faster rate. If your supplier of an item, it means that you may receive what you’ve purchased sooner. For sellers, the EDI standards help them get paid sooner and more accurately. And, of course, the financial teams on both sides get much better records to work with.
How does EDI work?
Clearly, using the EDI process speeds up transactions for both trading partners. However, it’s easy to ask how it works. In a nutshell, EDI works by putting all documents between the same two trading partners into the same protocol. Each protocol has a standard purchase order, standard order form, a standard invoice, and more.
Furthermore, these standard forms are machine-readable. This means that the staff do not need to manually review every detail and easier business. Instead, a standardized purchase order will automatically trigger the fulfillment and invoicing process at the other trading partner. Likewise, a standardized invoice will initiate the payment process in the buyer’s system.
Although accounting will leave you all transactions to make sure that they were compliant, this doesn’t get in the way of commerce. Rather, this review becomes part of the standard financial controls.
Let’s think about this another way. When trading partners use an EDI standard, the document undergoes the same steps on each side. First, there is an internal document format, which is what the bean counters keep track of. Then, this standard document is sentenced to an EDI translation service, with the exception of very large corporations that may have a translator in-house.
Once the document has been translated, the standardized document is sent over the Internet to the other trading partner’s computer system. The EDI document is translated by another service and resurfaces in a format that is compatible with the recipient’s computer system. Best of all, most of this happens within an hour or two rather than the days to weeks of older methods.
cXML
cXML is another way that you can run punchout catalogs. Specifically, cXML is a state of protocol that lets incompatible systems talk to each other. However, in this case, there’s more flexibility because you can use it to transmit more document types. For our purposes, the biggest thing that cXML does is transmit catalog and purchase information between two company systems. However, unlike the EDI protocol, you can use it without leaving your procurement software. And for suppliers, the information shows up where it needs to, both for fulfillment and for invoicing.
OCI
Finally, let’s look at the OCI protocol, also known as the Open Catalog Interface. This is a standardized format for punchout catalogs that allow each company’s e-procurement system to automatically search it. However, OCI goes a bit further in that you can see the actual webpage where each product is displayed, read the descriptions, see the prices, and add it to your cart. From there, you get the same functionalities that we talked about with punchout catalogs earlier.
In a nutshell, there are three basic ways to run a punchout catalog functionality — EDI, cXML, and OCI. Each of these is more or less flexible depending on how you want to structure your website and facilitate communication with your customers.
How to automate procure-to-pay with Punch Out or EDI
By now, you’ve probably noticed one important point – EDI and punchout catalogs are great ways to automate your procure-to-pay process. However, they don’t necessarily have to work together. If your vendor uses punchout catalogs, then you could program your procurement system to pay them with a purchasing card. However, you could also use the traditional purchase orders using an EDI protocol.
If you choose the EDI method of automation, it will work with you you have a punchout catalog for that vendor or not. All you need is for the other trading partner to agree on a protocol. On the other hand, the use of a purchasing card usually requires easier a traditional e-commerce context, a brick-and-mortar store, or a non-EDI catalog system.
Fortunately, with modern procurement software like ControlHub, you can choose any of these protocols to purchase goods and services. It’s just a matter of what your supplier. Either way, not only to automate the process and save a lot of time and energy, but you’ll have everything in one place. This way, compliance and budget tracking couldn’t be easier.
Key takeaways
there are several ways to create and manage punchout catalogs. Some of them will easily take all forms of payment, while others primarily focus on purchase orders. However, no matter which option you choose, the overall P2P process will go much faster and experience a lot less human error. For a company that buys a lot of products and services, this can be a real timesaver with significant cost savings.
Final thoughts
As an executive purchasing manager, it can be easy to get overwhelmed with all of these options. In addition, you have a lot of work policing the P2P process. And, if your company is ready to sell to other businesses, you need to think about whether or not a punchout catalog or other automation tools are important to you.
In other words, each of the B2B e-commerce integration options is important for you both as a company that buys at a company that sells. Either you implement it yourself, or you will run into a supplier that prefers to use a different protocol.
Fortunately, no matter what you choose, ControlHub has you covered. Our advanced P2P system can handle all the different buying options, from purchasing cards at a brick-and-mortar POS all the way to punchout catalogs. Contact us today for a demo.
