PunchOut Catalog: Everything You Need to Know

ControlHub
January 25, 2023

In procurement, there are a lot of moving parts. This is unsurprising when you consider that the average company has to buy a lot of products and services every month just to survive. Not only that, but the more a company buys, the more important it becomes for them to maximize their value for money. Combine these considerations with the risks of unauthorized or unplanned spending, and you have a lot of reasons to be careful.

Fortunately, modern procurement software and other regulated parts of the purchasing process make it a lot easier to remain compliant with both corporate policies and any applicable regulations. Not only can you manage every step of your supply chain to maximize success and value, but you can also make sure that every supplier is approved.

With that said, manually purchasing every item you need from an approved vendor list is still a lot of paperwork. Simplifying the purchasing process is an important reason why punchout catalogs have become so popular. Let’s take a look at this valuable procurement tool and how it can benefit a hardware-intensive startup or other manufacturers.

What Is a PunchOut Catalog?

A punchout catalog is a piece of code that allows buyers to select products from a supplier catalog, then proceed with the procurement process for each item without leaving their procurement software. In other words, punchouts let the two computer systems interface with minimal human involvement.

Another way of answering what is a punchout catalog is an extremely convenient way to find out what each vendor has to offer and then instantly select the most suitable product. One reason for this is that procurement software that uses punchouts can immediately discover which vendors carry a particular product. This search is performed when the software user runs a search and the procurement software itself.

Because of the interface between systems, punchout catalogs are a very modern concept. It used to be that procurement officers would have to flip through paper catalogs to find a supplier’s product offerings. However, paper catalogs are very fickle because they only reflect the point in time when they were printed. If a vendor stops selling something, they might get inquiries about that product for longer than that catalog is current.

Instead of this point-in-time presentation of a supplier’s product line, a punchout catalog is dynamic. In fact, the most important feature of a punchout catalog is that it lets you basically browse the supplier’s e-commerce website or online ordering system without leaving the confines of procurement software. Instead, you can see what suppliers have to offer, then follow through with a purchase order for what you need.

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Punchouts provide unique access to e-commerce sites

One of the most important aspects of punchout catalogs is that they provide a realistic look at a supplier’s product catalog. When you view a punchout page, you get to see all the same pictures and text that you would when you visit the vendor’s website. The big reason for that is that punchouts effectively provide a picture of the supplier websites from inside the buyer’s e-procurement system. Additionally, you can see at a glance how much inventory a vendor has.

Practically speaking, using a punchout catalog means that you can quickly and easily determine which supplier has enough of something for you to order. You will also see what discounts if any, you have under the procurement contract. So, if you get a 20% discount on plate glass, then you will see the final price right there in the punchout, just like if a B2C e-commerce company was having a sale and displaying the discount on each product page.

→ Click here if you want to know about PunchOut Catalog Examples

PunchOut Meaning

When most of us hear the term punch out, we immediately think of a time clock. This is especially true for people who have a blue-collar background or whose employer used an old-fashioned time clock. That’s because original timekeeping electronics used a paper card that was punched or stamped with the time.

That isn’t the punchout meaning we are talking about. Rather, the term largely refers to the ways in which the buyer’s e-procurement system and the vendor’s products catalog interact. Specifically, the way in which a buyers agent will view the seller’s website from within the procurement software.

When a buyer searches for a particular product or service, the procurement software will give that employee a listing of the products available and who is selling them. To review those items, the employee will “punch out” of the software screen. Then, a separate window will pop up within the procurement system itself. This window is referred to as the punchout catalog, and it looks exactly like the supplier’s website. About the only exception is that the screen will display any special prices or offers.

Another punchout meaning is that when you’re done browsing your supplier’s website, you can “punch out” of it and return to the main section of your procurement software. From here, you can do several things, such as initiate the P2P process for items you have chosen or view another vendor catalog.

It’s easy to see why employees from the younger generations would especially enjoy working with punchout catalogs. For many of the younger set, online shopping is the preferred method of getting goods and services that they need every day. However, punchout catalogs are compliant with business procurement best practices. For this reason, the use of this procurement tool is typically beneficial for all sides.

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What Is PunchOut e-Procurement System?

As we mentioned in the last section, a punchout is essentially a copy of a supplier’s website embedded with a client e-procurement system. The punchout is customized for each client in that it will automatically display any discounts or other perks to which they are entitled. This way, each customer gets a customized experience.

However, in many ways, it’s easier to understand what an e-procurement system is by contrasting it with other procurement methods and tools. Let’s take a look at some of the alternatives.

Punchouts are not paper product catalogs

These have often-obsolete pricing information. It used to be that catalogs, whether paper-based no or in the form of electronic files, were relatively rarely updated. For example, a B2B outdoor gear company might publish one catalog for warm weather and another one for cold weather. While this type of product rarely has asking pricing changes in the middle of the season, there might be sales. In this case, the initial catalog would not list that sale price.

Another problem with fixed product catalogs is that they generally don’t reflect whether or not a product is in stock. Therefore, if a company has supply chain issues, it could create a real headache for them and their customers. Specifically, the sales department would likely shield a lot of calls about products that were temporarily unavailable, and buyers might get frustrated or annoyed because they cannot obtain the goods and services they need.

Punchouts are not Catalog Interchange Format (CIF) files

However, these are the precursors to punchout catalogs. A Catalog Interchange Format, or CIF, was developed by Ariba in the 1990s, and it was the first serious attempt at digitizing product catalogs. Before this stage, about all a B2B company could do for computer information exchanges was an Excel spreadsheet. Needless to say, this was not very efficient.

On the other hand, a CIF was much easier to search, much like the modern database. Nonetheless, a CIF has many of the same problems as a paper catalog, especially because it is not updated very often. While a company doesn’t need to completely reformat and edit a CIF like you would a catalog, all changes must still be made manually. Checking stock or pricing still requires a call to the sales department.

Punchouts are a bridge between a supplier and its customers.

While it’s easy to simply transfer files between companies, as you would with email or a document transfer protocol, punchouts are organic. That’s because customers are browsing your website from within their e-procurement system, then sending you a purchase order for whatever they need to buy.

However, punchouts are not exclusive links. Most buyers will have a punchout integration with many different companies, often including your competitors. Furthermore, they will browse your website using a punchout and not leave a trace. That’s because your website will not place a cookie or other tracker on their web browser because they are accessing your website from a back door.

In other words, punchouts are similar to old-style catalogs in that you don’t know that a customer is browsing. You only find out if they place an order or if they contact sales for assistance.

Punchouts work like catalogs, but they are updated in real-time.

Because a punchout catalog is essentially an integration that gives customers real-time access to your catalog, it is updated at the same time as your website. So, when your web administrator changes the pricing for a particular item on the website, those changes are immediately reflected in punchout customers. The difference is that any contractual terms that you have with the customer remain intact. 

Likewise, if a product is added or removed, your customers will see that change reflected immediately. So, while you might still get a few calls to sales asking what you might have available as a replacement, the calls looking for an item you no longer offer should be drastically reduced. And from the customer’s standpoint, it’s much easier to manage supply chains when you don’t have to chase down products and services constantly.

Punchouts can be an integral part of customers e-procurement systems.

There’s a reason why we refer to punchout integrations rather than just punchout catalogs. That’s because, unlike your e-commerce site, the punchout does not process an order. Instead, contact information for what your customer wants to buy is exported from your website into the client’s procurement system. Then, they will issue a purchase order for all approved items, and you will process the order as normal.

Additionally, punchouts allow for compliance issues to be dealt with more easily. For example, to receive punchout privileges from a buyer, you will have already passed the supplier vetting process. And, when you get an actual order from the punchout, the order will automatically meet the corporate purchasing policy. That’s because the customer’s e-procurement system will have already approved the purchase before you’re even aware that the customer wants to buy something.

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Benefits of Punchout Procurement

Now that we understand what a punchout is, let’s look at how it can be beneficial. Some of these benefits are exclusive to suppliers, while others primarily help buyers. On the other hand, there are some punchout catalog benefits that are equally beneficial for both parties.

They help reduce errors

A major benefit for buyers and sellers alike is that punchout catalogs help to reduce purchasing errors drastically. By far, the biggest reason for this is that most steps of the P2P cycle happen by computer. This point is easier to explain in terms of what can happen quickly customer orders something without using a punchout.

There are two basic alternatives to punchouts within an e-procurement system. First, the procurement officer can use a paper catalog or CIF for product selection. In this case, the employee will fill out a purchase requisition, then send it through the computer system for approvals and PO issuance.

The second option is for a purchasing officer to browse your website, then manually copy the product numbers and other important information, then repeat the steps we mentioned above. For both of these alternative approaches, there are several things that can go wrong. One of the largest issues is clerical errors. Especially for high-tech manufacturing, it’s very easy to make substantial ordering mistakes. In addition, almost anyone can order the wrong quantity by adding or subtracting a zero, or switching two numbers.

On the other hand, with a punchout the information is automatically exported from your website into the buyer’s e-procurement system. While it’s still possible to order the wrong quantity, there is very little opportunity overall for errors. In addition, most of those errors will be caught during the purchase approval process.

There’s a lot more accountability

One of the great things about e- procurement software generally that passes through to punchouts is that purchase requests are logged per user. That means that procurement managers and corporate bean counters can quickly find out who ordered what and how much. So, if an employee improperly spends your company’s money, it will be very easy for management to find out and address the issue.

They are convenient and boost productivity

Not having to flip back and forth between a catalog page and procurement forms is very convenient. In fact, a quality punchout integration will fill out most of the forms automatically. In some cases, you’ll have to designate a budget or a department for the potential purchase, but that’s about it.

Similarly, not having to leave one program to browse a website or make phone calls saves a lot of time. Rather than wasting time on hold or sending back-and-forth emails, employees can simply make their selections and wait for the approval process to play out. And, if the punchout shows that a critical item is out of stock, another supplier may be able to quickly fill in the gaps.

Improved compliance

Likewise, punchout catalogs help with compliance because they encourage employees to buy from pre-approved suppliers. While there will occasionally be situations where no current supplier has the item in stock, or where it can’t be delivered in time, the vast majority of purchases can easily be made with punchouts.

As part of the vendor approval process, procurement and compliance departments will make sure that the potential vendor is acceptable from a regulatory standpoint. Especially during times of political turmoil or trade wars, regulatory compliance can be difficult. On the other hand, if employees know that they can order from a given supplier without problems, then there’s less of a temptation to deviate from corporate policy.

Access to enterprise clients

Increasingly, enterprise clients and other large-dollar purchasers insist on using a punchout. Convenience and regulatory compliance are, understandably, major factors. In addition, the typical purchasing officer does not want to deal with a lot of paper catalogs or website accounts. Instead, they like to have everything in one place.

Additionally, as the saying goes, “if you don’t, someone else will.” In other words, if your company is relatively unique in the industry, yet it doesn’t have punchout catalog support, this is an opportunity for the competition to steal customers. Therefore, you should always aim to provide customer value with punchouts and other e-procurement tools.

Better customer experience

This one’s a benefit for both buyers and sellers. In a nutshell, using a punchout catalog isn’t much different from shopping directly on a vendor’s website. That’s because customers do use the website, it’s just done a little differently. Punchouts are actual copies of the website with customer-specific modifications and a method of ordering.

For younger procurement employees who are used to shopping online for almost everything, this familiar feeling is quite enticing. They can see, at a glance, what the company has to offer and get a good picture of it. Likewise, they are much less likely to need a call to the sales department because customers will see the same product information as browser-based website users.

Of course, being able to verify that needed items are in stock is also very convenient. While nobody likes to lose a sale, if a supplier has something on backorder that won’t show up for months, it’s better that the customer know this upfront when something doesn’t arrive on time.

Increased revenue

From a seller perspective, punchout catalogs help boost revenue. There are a few ways in which this happens. For one thing, the customers who demand punchout access tend to be larger businesses that place larger orders. For another, there are more opportunities to sell additional goods and services to punchout customers.

Let’s look at the second point hypothetically. Especially when there are supply-chain disruptions or when an item is especially popular, out-of-stock stock situations are relatively common. If a customer usually buys something from one of your competitors, but that supplier is unable to deliver on time, they’ll have to look for alternatives. Because the procurement system will show multiple punchout vendors for the same item, having a punchout integration with that customer gives you an opportunity to make the sale.

Similarly, punchouts can help you upsell and cross-sell. For upselling, a client can look at a particular product category and decide that a more expensive or more profitable product is better for their situation. Likewise, you can cross-sell products because punchouts encourage browsing. A buyer can easily visit your punchout looking for a particular product and leave with that product plus something else that they needed. Best of all, you don’t need a sales professional to achieve those results.

Customized pricing

As the saying goes, one size doesn’t necessarily fit all. Certainly, this is true with products, but it also applies to pricing and other sales terms. Especially with enterprise clients, there is often a contract negotiation between a buyer and a potential supplier. These negotiations often result in special pricing that isn’t available to the public. Sometimes, the special charms are a business discount extended to most corporate clients. They can also be unique to the customer. Either way, punchout catalogs will display any negotiated rates.

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How Does a Punchout Catalog Work?

In order for two computer systems to work together, there needs to be a protocol that sends data between them. And while the Internet has made standard transactional communications easy, punchout catalogs work somewhat differently. One of the reasons for this, of course, is that the punchout needs to send item information back to the buyer’s computer rather than simply sending a receipt like it would for normal purchases. Here are the basics.

Set up

First, the two computer systems need to form a link. The process begins when a vendor gives the buyer a punchout access code. This information is added to the procurement system, and it will allow the two computers to communicate properly.

Employee access

When a purchasing officer needs to order something, the first step is to log into their e-procurement system. Then, they will search for whatever items they need in the procurement database, and the program will give them a list of approved suppliers.

Next, the employee will select a supplier from the list, and click on the link. In response, the procurement software will send a Punchout Set up Request, or PSR. In most modern systems, this request will be sent in XML format.

In response to the PSR, the supplier’s computer will connect with the buyer’s computer and the employee will immediately have access to a special segment of their website.

Product selection

Once an employee gets access to their company’s punchout section, they will select the products that they need. Sometimes this will be just one item, and sometimes it will be several. As the employee finds the necessary items, he will add them to the shopping cart like he would for a traditional e-commerce transaction, which includes the quantity needed and any other relevant options.

P2P process initiation

After everything is in the shopping cart, the employee will “punch out” of the catalog. At this point, the seller’s computer system will send the details of everything in that shopping cart back to the buyer’s e-procurement program.

From this point on, the P2P process will proceed as normal. In other words, the desired items will be placed on a requisition form, which will then receive approvals. When all approvals are finished, the E-procurement software will automatically send the vendor a purchase order for the goods.

Order fulfillment and payment

Typically, the ordering and fulfillment process will happen using the same methods as any orders that originate from other sources. However, unlike with traditional e-commerce, the vendor will need to send an invoice to the buyer for payment. In other words, although the “shopping” happens on the seller’s website, no purchasing or credit cards are used.

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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 providers of industrial parts and equipment, offering a wide range of items from screws, pipes, and power tools to playground accessories.

With an extensive selection to choose from, McMaster-Carr is your go-to source for all your industrial needs. From the small and seemingly insignificant, to the large and essential, you can count on McMaster-Carr to have it in stock.

No matter what type of industrial parts or equipment you need, McMaster-Carr has what you are looking for. Whether it's a single screw, a power tool, or a full playground set, McMaster-Carr has the right product for you. 

With their unbeatable selection and competitive prices, McMaster-Carr is the perfect choice for any industrial project. So, if you're in the market for industrial parts and equipment, look no further than McMaster-Carr.

What’s Punchout?

The integration of a Punchout Catalog into a company's existing procurement system offers numerous advantages. Streamlining the purchasing process, it saves time and money for the company, as well as for their customers. 

Automatically adding purchase orders to the system helps ensure accuracy, so customers can shop and purchase products with full confidence that their orders will be quickly and accurately processed. 

Furthermore, the integration eliminates the need for manual data entry, which improves data accuracy across the entire purchasing process. 

These advantages make integrating a Punchout Catalog into an existing procurement system a powerful way to improve customer service and minimize costs.

How to integrate your company’s Procurement Process with McMaster-Carr?

ControlHub, an intuitive purchasing software, offers hardware companies an efficient way to streamline their purchasing processes. 

By using ControlHub, companies can easily access Mc-Master PunchOut, a leading electronic procurement solution. This saves companies time and money by automating the purchasing process and eliminating manual tasks. 

ControlHub also offers comprehensive analytics and reporting capabilities, allowing companies to gain insight into their purchasing trends and make informed decisions about their operations. 

With its user-friendly interface and powerful tools, ControlHub provides hardware companies with the tools they need to simplify their purchasing process and get the most out of their resources.

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 ideal choice for engineers from companies of any size due to their worldwide distribution and customer service. Not only can customers access their wide selection of more than 1 million products from over 2,300 suppliers, but they can also benefit from the company's competitive prices and quick delivery. 

This global distributor offers products such as board-level components, semiconductors, passives, interconnects, electromechanical, batteries, power, and sensors. 


Digi-Key's competitive prices, fast delivery, and superior customer service make them the go-to option for engineers from all over the world. 

With their extensive selection of products from top suppliers and their commitment to customer satisfaction, Digi-Key is the perfect place to find the components you need.

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, while gaining greater control over spending. 

Not only can businesses create orders in one click and track and manage orders, but they can also analyze their purchasing data to uncover trends and gain insight into their spending. 

Additionally, ControlHub enables companies to quickly and easily access product information and compare prices across suppliers, ensuring they get the best possible deal. Ultimately, ControlHub can help businesses to save time, money, and become more organized.

With Digi-Key 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 been a reliable source for electronic components, semiconductors, and related products for many years. They have built a strong reputation for providing industry-leading products and services to customers around the world.

Their commitment to quality and customer service is evident in their extensive selection of components, and their global network of trusted suppliers and partner

How to integrate your company’s Procurement Process with Mouser?

ControlHub is the ultimate purchasing solution for hardware companies, offering an intuitive interface, single sign-on, direct access to the Mouser PunchOut Catalog, automated order synchronization, powerful management capabilities, and detailed analytics. 

This enables businesses to make better decisions and gain deeper insights into their purchasing and inventory operations, resulting in optimized procedures and an increase in efficiency. 

Not only does ControlHub simplify the purchasing process by providing a central system to create, monitor and modify purchase orders with real-time updates, but it also streamlines administrative tasks such as the reconciliation and tracking of supplier invoices. 

In short, ControlHub is the best choice for hardware companies looking to optimize their purchasing process and gain greater insight into their operations. With its comprehensive features, it is 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

Integrating Amazon PunchOut with ControlHub enables you to unlock significant time, resource, and monetary savings. This integration helps you streamline and simplify your company's procurement process, allowing you to make faster and more informed purchasing decisions. 

Additionally, it eliminates manual data entry and tracking, enabling you to focus on cost-effectiveness, speed, and accuracy. Moreover, ControlHub's advanced analytics provide insights into the cost-effectiveness of different purchases, so you can make more informed decisions. 

In short, Amazon PunchOut and ControlHub's integration offers a range of benefits for businesses. Not only do you gain access to the convenience of the Amazon PunchOut catalog, but you can also save time, resources, and money. 

ControlHub streamlines the procurement process, eliminating manual data entry and tracking, and providing valuable analytics to help you make cost-effective decisions. With the combination of Amazon PunchOut and ControlHub, businesses can unlock numerous benefits and streamline their procurement process.

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 Software - Levels

Unsurprisingly, there are several different levels or types of punchout catalogs. However, unlike most things in IT that have different types, this isn’t really about computer compatibility. Instead, it’s about what an employee can and can’t order from a supplier through their punchout system.

Level I

Most of the discussions about punchout catalogs and how they work center around Level I catalogs. That’s because they are one of the original formats, and they provide extensive access to each vendor’s product range.

When an employee uses a level I catalog, they are directed from the procurement software directly to a special landing page on the seller’s website. Here, the employee can search for the necessary products and add them to a special shopping cart.

One of the great things about a level I catalog is that buyers have access to all the product descriptions and photos. It’s very similar to browsing on a traditional e-commerce site. Additionally, although the punchout catalog primarily contains items generated by the procurement system, vendors can also add items or promotions for cross-selling and up-selling opportunities.

Unfortunately, the drawback of a level I catalog is that it’s hard to search. This is the technique primarily depends on browsing, so you’ll want a good shopping list to use one of these. Additionally, if a buyer has access to a lot of level I catalogs, there can be computer issues. This is especially true if several vendors sell similar products.

Level II

With a level II punchout, employees can search a database in their e-procurement software for each item that they need. Then, the computer will present them with a list of suppliers that provide the item, and the employee selects one. When the link is clicked, the employee will see the page on that vendor’s website, and they can decide if that’s the right item to buy. If not, they can check out another item in that category.

The main difference between a level I and a level II punchout is that employees decide if they are interested in a suppliers product before the punchout to their website. Additionally, the enhanced search functionality saves employees a lot of time. They can, of course, by more than one item from the same supplier during the same session. In fact, you can easily see an employee making multiple searches and then going with a supplier that has more than one item from the database.

Product level

This punchout type is even easier to use. Here, the employee searches for a specific item in the database. Then, their e-procurement software will give a list of links to that product, with each link being from a different supplier. So, if your company needs to buy a thousand feet of 20ga copper wire, the program would give you competing offers just for that product.

Category level

Also called aisle-level punchouts, this type provides a listing of each vendor’s products within a certain category. So, to continue our copper wire example from above, the employee would search for copper wire rather than specifying a gauge. Then, they would see who sells copper wire and select a vendor. From there, the employee would choose the type and quantity of wire and then continue with the ordering process.

Shelf level

In this case, the employee searches for something very specific and gets links to different suppliers. You’ll see this more often in situations where the brand is important. For our copper wire, let’s say that the variety needed is only produced by one company. So, the employee would search for that brand name of wire and get a listing of suppliers. This saves the employee a lot of time because he can browse the different offers and choose the best one, often in just a few minutes.

→ Click here if you want dive deeper into Punchout Software-Levels

How to integrate Punchout with your Finance ERP

Of course, it’s easy to argue that punchout integrations are easier said than done. After all, until the development of cXml, even basic e-commerce was much more difficult.

What is cXml? It stands for Commercial eXtensible Markup Language, and it is a form of computer code that facilitates data transfer on the Internet. The term commercial means that this language is a form of XML that was designed specifically for e-commerce.

We will talk about cXml a bit more later, as this is only one method used to create punchouts. However, for now this information helps us understand how to integrate punchouts with a finance ERP.

A finance ERP is essentially a large computer program that manages all the financial resources in a company. The acronym ERP stands for Enterprise Resource Program. Some ERP’s only handle certain areas, such as financial resources, while others are more comprehensive and can essentially manage all the data for an entire company.

To integrate punchouts with your finance ERP as a buyer, you will need a section of code that allows the ERP to access punchout catalogs. From there, you can get punchout access codes from each of your vendors and add them to the procurement section of your ERP. Once you have done this, you will be able to use the punchouts as we described in previous sections.

As a seller, the process is similar. Here, your web developer will add a punchout catalog module to your e-commerce site code. From there, you will just need to maintain the catalogs and hand out access privileges to your customers as appropriate.

→ Click here if you want to know more about PunchOut with Finance ERP

What is B2B PunchOut Ecommerce?

B2B punchout e-commerce is a mixture of traditional procurement techniques or programs and the modern e-commerce space. Because punchouts are only used with corporate-level e-procurement software, they are a B2B phenomenon by definition.

With that said, punchouts are different from traditional e-commerce because they leverage the power of the customer’s ERP or procurement platform. The idea is to streamline the procurement process by keeping all the important information in one place and by simplifying procurement paperwork.

However, even within this streamlined protocol of punchouts, both trading partners’ data is stored on their own servers. That’s because a punchout lets buyers access a company’s product catalog in two traditional e-commerce. The customer’s software automatically searches the databases for each supplier and presents the employee with some options.

Once an employee decides what to buy and from which supplier, the purchasing process is significantly different from traditional e-commerce. That’s because the vendor will receive a purchase order and complete the P2P process. By contrast, traditional e-commerce involves customers paying for their purchases without leaving the website, typically with a credit or debit card.

At the end of the day, the whole purpose of B2B punchout e-commerce is to streamline the purchasing process for customers and vendors alike without violating established norms of procurement.

→ Click here if you want to know what B2B PunchOut Ecommerce

cXml and OCI Document Languages for PunchOut

There are two main computer languages used for punchouts, each of which enable and facilitate the electronic communications between the buyer’s computer and the seller’s computer. Both of them works similarly, but there are significant differences between the two. One is called cXml, while the other is referred to as OCI. Let’s take a brief look at each of these technologies.

What is cXml?

We’ve already mentioned the acronym and its meaning in an earlier section, so let’s look at how cXml works. With cXml, documents and data over automatically transmitted between the trading partners computer systems. The catalog that a buyer will browse is written and transmitted in this language. Additionally, the catalog is searchable so that the buyers procurement software will identify the company as a supplier when a procurement officer searches for it.

What is OCI?

OCI, or Open Catalog Interface, is an SAP product that directly competes with cXml. It uses maps of data to both direct punchout users to relevant products and then exports their selections to the buyers procurement system for processing.

As part of an OCI punchout, a vendor will also make the product catalog itself searchable. This way, buyers know when a particular vendor has that product to sell.

At the end of the day, these two technologies work a little bit differently on the backend. However, both of them can create an excellent customer experience. The only concern is that you need to tell your clients which computer language you are using for the punchouts so that that their IT department can make any necessary changes.

→ Click here if you want to know all about cXml and OCI Document Languages

How does punch out ecommerce work?

Punchout e-commerce works by giving a B2B customer private access to a vender’s product catalog. Using this catalog, the customers procurement department can search products and select the ones that the company needs. Then, the punchouts software sends a message back to the buyer’s computer, which specifies the procurement officer’s selections. From there, the P2P process is initiated.

However, this process is a bit more complicated than selecting items, at least from an IT perspective. There are several ways that the two companies’ computer systems can communicate. Besides the cXml and OCI methods we’ve talked about before, which provide native access to relevant information, there are some workarounds for incompatible systems.

Usually, the goal is to agree on compatible programs within an industry. However, this doesn’t always work out, especially if a supplier works with businesses in multiple industries. To help fix this problem, you can often use an API or other protocol that was specifically designed to “translate” between different computer languages. However, once you have this problem worked out, the two computer systems should communicate seamlessly.

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Punchout vs EDI?

Many people get confused with all this terminology in e-procurement. This is unsurprising when you consider the number of technologies and computer languages that are available just within this area of business. At the end of the day, it can easily seem like random alphabet soup. 

One of the confusions we’ve seen a lot lately is between punchout and EDI. Let’s try to resolve this confusion by explaining the EDI, and how it is different from punchouts.

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What is EDI?

Simply, EDI stands for Electronic Data Interchange. It is a way for businesses to send documents from one company to another in a format that is machine-readable. For this to work, the sender must translate that document into an EDI protocol language that the recipient’s computer and read. If the two companies do not use the same EDI protocol, the sender can use a translation service that will convert each document into the right protocol for the recipient.

Another important point about EDI is that all documents are standardized. Not only does this mean that an EDI document includes the same information, but there were also limits on the types of documents you can send with EDI. In other words, if there is no EDI standard for the document type, you must use another data transfer method.

How is this important to punchouts?

Many procurement-related documents are sent over the Internet or wires in EDI formats. Companies that use punchouts do not place their orders directly in the vendors e-commerce system. Instead, the purchase orders and other communications are sent separately, direct from the procurement software.

What this means in practice is that punchout-related purchases will frequently be completed using the EDI documents. However, it goes a lot farther than just the purchase order. You can use EDI protocols for shipping notices, bills of lading, and invoices. 

In other words, EDI and punchout technologies complement each other, and are frequently used together during the procurement process. However, neither technology is dependent on the other because you can do EDI-based procurement without punchouts and use punchouts for sales without using EDI documents.

PunchOut Catalog Example

Because punchouts are so popular, most major B2B companies offer them. In fact, it’s getting harder to sell your goods and services to institutional clients without a punchout integration. Let’s look briefly at a few examples, both of technology providers and suppliers.

  • Ariba by SAP is the original cXml-based punchout software provider. They adapted existing XML technology to be friendlier for e-commerce providers. In fact, it’s easy to argue that SAP was one of the major companies that allowed e-commerce to become accessible for almost everyone. It’s no wonder that most articles on this topic discuss cXml.
  • Amazon Business is one of the largest punchout catalogs in the world. When you consider that Amazon is more products available than almost anyone worldwide, it’s unsurprising that they would be early adopters of this technology. Additionally, Amazon provides a lot of services to other businesses, rather than just being limited to products.
  • Oracle offers OCI-based punchout solutions for both Apple-based and PC-based systems. This is unique, because PCs are so dominant in the field that they often don’t get much attention.
  • Staples also has a huge punchout catalog. They are obviously more limited in what they carry than Amazon, but as a business-focused company, they would have been a relatively early adopter of punchout technology.

As you can see, there is a variety of punchout options available, including both suppliers and within the IT industry. And in turn, each of these has different compatibility and technological concerns.

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Punchout Catalogs Vs. Hosted Catalogs

Our discussion about punchout catalogs would not be complete if we didn’t mention a different kind of catalog that has been used in computer-based procurement for a long time. These are called hosted catalogs, and in many ways they are the predecessors of punchout catalogs.

A hosted catalog is about what you would expect from the name — a suppliers catalog that contains either their full product line or a particular category of products that they sell. But unlike the old-school catalogs, these are not printed. Instead, hosted catalogs are data sets that a supplier is gives to its customers. The customer will then upload that information to their e-procurement system.

Although a hosted catalog is searchable, it doesn’t have the dynamic information of a punchout catalog. For one thing, the information is a snapshot in time, just like an old-school paper catalog. Clearly, it’s easier to update information in hosted catalogs, because they may only need to change a few lines of type. However, there is no current pricing information available — instead, a potential buyer has to call sales to verify the price, or pay the market rate when they get an invoice.

Additionally, hosted catalogs do not have as detailed of information as punchouts. Usually, hosted catalogs are little more than a pricelist, with the item name, number, and cost. With that said, an older procurement system can still benefit from hosted catalogs because the stored information helps fill out PO’s and other purchase-related forms.

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Final thoughts

Punchout catalogs seem complex, and in some ways, they are. In particular, the technology and the computer languages required to set up and use punchout catalogs can seem complicated at times. That’s especially true when companies use incompatible computer systems. Fortunately, modern information technology has many strategies available to get computers to talk to each other.

Even with the technological complications that companies sometimes face, punchout catalogs are very easy to use, especially for buyers. They are also highly beneficial for the sellers, who often get contracts because a punchout is available.

Do you need an e-procurement system that can work with punchout catalogs? ControlHub may be your answer. Call us today for a free consultation.