No matter what industry you’re in, there’s little question that punchouts are beneficial. However, what’s less clear is how punchouts work. For people who are not IT professionals, the discussion around punchouts is usually limited to their benefits and the practical aspects of their use. However, if you are part of the decision-making process for a new punchout system, is important to understand the basics of how this technology works.
Fortunately, while the coding and testing may be a specialist-only job, the basic principles of punchout catalog technology are easy to understand. In a nutshell, there are multiple languages that can be used for punchouts. Let’s take a look at the two primary ones — cXml and OCI. Let’s look at each of these briefly in the context of how they work to transform your purchasing through punchout catalog technology.
The overall goal of punchouts
Before we dive into computer languages, it’s important to understand what a punchout catalog is and how it works. Back in the 90s, when companies started transitioning between a manual procurement system and the modern E-procurement system, they quickly realized that issuing a purchase order produced by a computer didn’t really save much time. Instead, the hybrid system that developed to that point simply handled the ordering and accounting tasks with simple computer-based programs.
Unfortunately, those early electronic purchase orders were still based on manual catalogs. This method that a procurement clerk would still have to search through a paper catalog to locate necessary supplies. And if the need was urgent, they’d still have to call their supplier’s sales department to check stock. Before long, it became clear that a more efficient procurement system was in order.
The more efficient system that evolved was punchouts.
What are punchouts?
Simply put, punchouts are a type of integration between a seller’s inventory or product descriptions and the buyer’s E-procurement system. Using a punchout, buyers can browse a seller’s catalog, select the products they wish to buy, and then send a sort of wish list through the approval and purchase order process. In the meantime, they are confident that a supplier has each item in stock. If the order is placed, then will only get a backorder if it took the E-procurement system too long to get everything approved.
The other important thing to note is that the buyer experience in a punchout is very similar to a buyer browsing the supplier’s website. In other words, they will see the same pictures of a product, descriptions, and pricing information. On that last item, your buyer will see the negotiated prices as applicable.
Systems integration options for punchouts
Now that we understand what punchouts are and how they work let’s look at the behind-the-scenes technology. Simply, they use computer languages that are widely used. Because it’s hard to have everyone agree on a language for procurement software, most E-procurement systems can support both technologies on some level. Then, when the buyer is ready to submit an approved order, documents will be sent through the ordering system using electronic data interchange or EDI.
CXml punchout technology
To understand cXML, you need to understand what XML is. The term XML refers to Extensible Markup Language. This is a file storage system that lets computers work with random pieces of information. In this case, we would define random as something that is hard to categorize in another way, such as a stack of bills. In other words, items like ordering information are perfect for XML.
Another benefit of XML is that it’s both machine and human-readable. Many earlier programming languages were almost impossible for people to read unless they were specially trained in that language. However, with an XML file, you can send it from computers to humans and back again without the data being misinterpreted. Also, you can “markup” parts of the data without changing anything else or rendering it unreadable. For that reason, it is popular for several types of program integration.
Likewise, cXml is a file storage system. Here, the C stands for “commercial.” Strictly speaking, it’s a subset of XML that only deals with commercial transactions. For example, the cXml standard includes cataloging data, a cXml purchase order protocol, pricing information, invoicing, and more. However, you won’t see employee emails being stored this way. Only the commercial document itself would use cXml.
How does the cXml standard help with punchouts?
It helps by facilitating the integration between both computer systems. Specifically, a cXml punchout uses a type of cookie to track buyer behavior. Then, a different CXML document is generated when the buyer indicates they are finished choosing products from a particular catalog. Once the purchase is approved, the buyer’s procurement platform generates a cXml purchase order, and to the fulfillment process begins.
Initially, this type of integration involves a setup request from the buyer to the seller. Then, your computers will ensure that cxmls standards are compatible. If not, the buyer may need to make some configuration changes. Fortunately, there aren’t many different cxmls standards, and a modern E-procurement system can handle all of them.
Is there more than one cXml document type?
Yes. While the cXml punchout process begins with this protocol, the protocol is also used throughout the procurement process. For instance, all of the supplier’s catalog items have a cXml description which is forwarded to the buyer’s procurement system for processing. Likewise, a cXml purchase order will be issued by the customer’s computer system.
As you can see, the cXml punchout method works to give each commerce partner the information needed to process a transaction. It does so by tracking buyers on the seller’s website, and by providing customer-specific information. Then, cXml sends information back to the supplier when the ordering time arrives.
What is the OCI document language for punchouts?
The term OCI stands for Open Catalog Interface. This is a rival protocol to cXml, and you primarily see it in SAP systems. You can also use an OCI-based patch in non--SAP systems to make the different computer systems work together.
Unlike customer tracking in cXml, the easiest way to think about OCI is that the supplier lets the purchaser’s procurement system view their catalog directly on the server. Then, the OCI protocol will send a sort of shopping list back to the buyer’s systems. From here, the buyer can send a purchase order to the seller using an Electronic Data Interchange (EDI) protocol.
The use of Electronic Data Interchange rather than XML for inter-company communication itself shows a major difference between the systems. As a general rule, EDI is not very easy to read if you are not a machine. That’s because there are a lot of extra codes and markups added to the text. And, EDI documents are not meant to be read by people but instead should be translated by a different computer program.
cXml and OCI create an effective punchout system
Like so many things in technology, there’s more than one way to accomplish a task. Whether it’s proprietary systems or a mixture of universal ones, competition leads to variety. Unfortunately, there can often be compatibility issues along the way. Just think about how well Windows and Mac PCs get along. A lot of the software is very different between the two, and there are often file formats that are incompatible.
However, as with Mac and Windows, there are ways for vendors and buyers’ systems to communicate, even if they use procurement and catalog software, that doesn’t always get along. For one thing, the industry-wide communication standards help make everyone’s life easier. For another, it’s often possible to add a software patch or other integration tool to “translate” between the different computer languages.
Either way, both cXml and OCI create punchout systems that most people can use. And if you use ControlHub for procurement, you will find that using both punchout types is seamless, even if the user experience is slightly different.
Ready to try the next generation of procurement software? You can save time and money with ControlHub, and also improve your supply chain management. Call us today.
