Insights & Advice

Demystifying PunchOut: What is it and why it’s important

David Bickerstaff

If you’ve heard the term PunchOut and wondered what it was, you’re not alone. eCommerce PunchOut is a little-understood (and rarely supported) function for most B2B eCommerce platform providers.

But if you understand it, and understand how it can benefit your business, it truly sets you apart from the perspective of your customers.

What is PunchOut it?

PunchOut is effectively a bridge or a direct connection between your B2B eCommerce platform and your customer’s purchasing system. It allows them 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 just a subset of items contracted to sell to that 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 (PO). Emailed POs are excellent candidates for automated order processing applications, as they ensure the process remains electronic and admin free 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?

PunchOut gives your buyers the familiarity and security of working within the controlled environment of their own procurement system or ERP. Spend can be managed, logins to multiple websites are not required, and buyers within your customers’ business can procure goods confident that the supplier is pre-approved and the product offering is in line with contract terms.

Buyers using a PunchOut catalogue also have access to real-time product, availability and pricing data, because the catalogue is still hosted and managed by you – within your B2B eCommerce platform.

How does PunchOut benefit you?

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. Using PunchOut eases the friction and uncertainty from eProcurement and the whole process and can mean the difference between a customer being able to buy from you or not.

It also gives you a competitive advantage. Offering the service can help you win larger customers and contracts you might not have otherwise been considered for or qualified to bid for.

It smooths your processes too as orders always come through with correct product codes and pricing.

Who to trust with integration?

The critical (albeit invisible) part of the process lies in the integration – linking your B2B eCommerce platform and your customer’s procurement system.

Ideally, your platform provider should offer PunchOut integration to major ERPs. But beyond integration, your provider needs to thoroughly understand the service 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 also important to understand that platform on its own is not enough. 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 for significant results for your business.

About the Author

David Bickerstaff

As Director of Sales & Marketing for both Commerce Vision and Lucy, David has spent the past 30+ years delivering IT solutions to support businesses across the manufacturing, wholesale, distribution and finance sectors.

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