Punchouts are helpful in various industries. Yet, their operation isn't always clear, especially for those outside IT. While their benefits are often discussed, knowing how they work is crucial for decision-makers considering a new punchout system.
The fundamental idea of punchout catalog technology is straightforward. Essentially, punchouts use different languages to improve purchasing processes. The two main languages are cXml and OCI.
Here's a brief overview of each and how they enhance punchout catalog technology.
How Punchouts Came to Be
Punchouts emerged as a solution to inefficiencies in the procurement process. In the 90s, companies transitioning from manual to electronic procurement realized that computer-generated purchase orders didn't significantly speed up the process. The early electronic orders still depended on manual catalogs, requiring procurement clerks to sift through paper catalogs and contact supplier sales departments for stock checks. Punchouts were developed to create a more efficient procurement system, integrating electronic data interchange to streamline the process.
What are Punchouts?
Punchouts are integrations between a vendor's catalog and a buyer's E-procurement system. They allow buyers to browse the vendor's electronic catalog, choose products, and send a 'wish list' for approval and purchase order processing. This ensures that items are in stock, avoiding backorders due to delayed E-procurement approvals. The buyer's experience with punchouts mimics browsing a supplier's website, complete with product descriptions, images, and pricing, including negotiated rates. Punchouts utilize CXML messages and extrinsic elements to enhance communication between the procurement application and the vendor's system. This leads to streamlined invoice documents and accurate punchout order messages, leveraging the benefits of CXML in procurement processes.
Okay, that sounds good, but what exactly is CXML?
What CXML is?
CXML, derived from XML (Extensible Markup Language), is designed for handling various data types, especially commercial transactions. XML is readable by both machines and humans, facilitating application integration. CXML, or Commercial XML, focuses on commercial transactions, like cataloging data and purchase orders. It's used for electronic documents in procurement but not for storing items like email addresses.
How CXML Helps with Punchouts
CXML facilitates integration between systems. It uses cookies to track user sessions during the punchout process. When buyers finish selecting items, a CXML document is generated. This integration requires initial setup documents and may involve configuring CXML parameters to ensure compatibility. Modern E-procurement systems can handle various CXML versions, aiding checkout and purchase order document creation.
Different CXML Document Types
In procurement, every product in a vendor's catalog is associated with a CXML product description. This description includes detailed information like product specifications, pricing, and availability. By using CXML, vendors ensure that the information is structured in a way that's easily interpretable by the buyer's E-procurement system. This standardized format simplifies the process of comparing products and making informed purchasing decisions.
The Role of CXML
Purchase Orders and CXML
When a customer decides to place an order, their system generates a CXML purchase order document. This document is a formal communication that includes crucial details such as item quantities, agreed prices, and unique identifiers for each product. The use of CXML in this stage streamlines the communication of business documents, minimizing errors and speeding up the procurement cycle.
CXML Punchout and Buyer Activity Tracking
The CXML punchout process is particularly beneficial for tracking buyer activity during the procurement process. When a buyer navigates through an E-commerce hub using a CXML punchout, their actions, such as item selections and quantity changes, are recorded. This data is crucial for understanding purchasing patterns and can be used to tailor the procurement experience in future interactions.
Providing Specific Information with CXML
CXML also plays a vital role in communicating specific information necessary for the completion of a transaction. For instance, during the checkout process, the buyer’s system sends a CXML order injection containing the buyer's shipping address and email address. This ensures that all relevant details are transmitted accurately and securely, reducing the likelihood of errors in the supply chain.
Enhancing E-Procurement with CXML Capabilities
CXML capabilities extend beyond just order processing; they include handling error messages and configuring default values in the E-procurement system. This ensures a seamless and efficient procurement experience, minimizing downtime due to application integration issues or CXML errors.
What’s the OCI Language?
OCI, or Open Catalog Interface, is a key component in procurement systems, particularly in facilitating efficient external procurement processes. It differs from cXml and is common in SAP systems but can be adapted for non-SAP systems to ensure compatibility, and enhance customer integrations. OCI allows the buyer's procurement system to access the supplier's catalog directly, a crucial step in buyers' procurement strategies.
The protocol sends a list of cart items, resembling a shopping list, back to the buyer's system. This list includes catalog line items, item configuration, item level, and item quantity, which are essential for maintaining accurate customer records. Buyers then place a punchout order or order request using Electronic Data Interchange (EDI), a format less user-friendly than XML as it's designed for machine readability and requires translation by specific software, posing challenges in the customer save action.
Benefits of Punchouts
- Improved tracking and management of spending
- A quicker and simpler way to handle B2B transactions
- PunchOut catalogs help control spending by preventing unauthorized orders
- Purchase orders created through the procurement system automatically follow the proper approval process
- Using cXML PunchOut can help suppliers stand out and attract potential customers by offering a setup that gives you leverage against competitors.
Final Thoughts
PunchOut catalogs are becoming more popular for B2B commerce, and now we can understand why, It simplifies the purchase process, making buyer and suppliers more satisfied. By integrating commerce CXML with PunchOut, businesses benefit from improved spend management, faster transactions, and greater control over purchasing decisions. This integration not only simplifies procurement but also ensures that orders follow the correct approval processes, minimizing errors and unauthorized spending.
