The Importance of PunchOut

eCommerce PunchOut is a little-understood (and rarely supported) function for most B2B eCommerce platform providers, but it's a key B2B procurement feature that can truly set you apart in the eyes and operations of your customers.

This article explains the process at a business level and demystifies PunchOut so that you can evaluate whether it's something your larger or prospective enterprise customers either require or could benefit from when transacting on your B2B eCommerce platform.

What is PunchOut?

In essence, PunchOut is a bridge between your B2B eCommerce platform and your customer’s purchasing system.

PunchOut functionality allows a customer to use their own ERP system, usually their purchasing or supplier relationship management system, to connect to a web-based product catalogue on your eCommerce platform. This product catalogue could be the global catalogue of goods you sell online or a subset of items you are contracted to sell for the customer.

Via this connection, the customer builds a shopping cart, then ‘punches out’ back through their own purchasing system to complete the order process there.

When it comes to the actual placement of the order, very large customers may send it to you via EDI, while medium-sized businesses may simply email you the purchase order. Emailed POs are excellent candidates for automated order processing applications, as they ensure the process remains electronic and ‘hands-off’ from start to finish.

The technology used can be either OCI (Open Catalogue Interface) for SAP users or cXML for customers running other ERPs. But regardless of the format in which the data is transmitted, the business process is the same.

How does PunchOut benefit your customer?

For large enterprise-level customers, such as mining, industrial, government and education, procurement can be a tightly managed process with complex roles, responsibilities and delegations of authority (in many cases, rife with bureaucracy).

PunchOut removes much of the friction and uncertainty from eProcurement - and indeed the whole procure-to-pay business process - and can mean the difference between a customer being able to buy from you or not. Having PunchOut as part of your eCommerce toolkit gives you a competitive advantage. Offering PunchOut can assist you in attracting large customers and winning lucrative contracts that you’d
perhaps otherwise not be considered nor qualified to bid for.

For you as the supplier, you can also be assured that PunchOut orders will always come through with correct product codes and pricing because the customer is still accessing your data from your B2B eCommerce platform (even if they’re not technically placing the order online).

Who to trust with PunchOut integration?

The critical (albeit invisible) part of the PunchOut process lies in the integration – that all-important link between your B2B eCommerce platform and your customer’s procurement system.

Ideally, your B2B eCommerce platform provider should offer PunchOut integration to major ERPs. But more than just offering the integration, your provider needs to thoroughly understand PunchOut with all its nuances, which can often include supporting custom processes. For example, in the case of a safety workwear supplier, their customers might require that workwear is correctly ordered with specific embroidery of names, particular fabric colours for different locations, or other elements required to support their people in the workplace.

PunchOut projects can vary in size, but regardless of scope, they must be handled by a team who has practical experience with the functionality. It’s not enough to simply implement PunchOut; your provider must also have the knowledge and skills to tailor and support it going forward.

In summary

PunchOut is a powerful tool and a strategic offering if you’re dealing with large enterprises who maintain strong control over their procurement processes.

Your B2B eCommerce platform obviously needs to be able to support multiple customers with a wide range of requirements and unique combinations of product, pricing, and business rules.

But the platform on its own is not enough.

These large enterprise customers will require you to have a deep understanding of their procure-to-pay processes and support their needs on the buy-side of B2B eCommerce. Your people are critical in supporting this capability, including the people you choose to team up with for your PunchOut solution.

Getting it right has the potential to deliver significant material results for your business.