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Hosted catalogue or PunchOut: how do you choose the best solution?

November 10th, 2016
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In an effort to achieve a competitive advantage, a growing number of companies are implementing electronic procurement or procure-to-pay (P2P) solutions and digitising the purchasing process. This approach includes access to negotiated products, a streamlined order placement process and electronic invoicing. Negotiated products are proposed through the catalogues that are available in the procurement solution and which can be accessed directly via the solution's search engine. These catalogues incorporate a description of the products and the contractual terms and conditions (price, dimensions, manufacturer, etc.).
 

Electronic catalogues are generally presented in two different forms:

  • Hosted catalogues are archived in the P2P system of the customer or the service provider (marketplaces).
  • PunchOut is available by means of an interface between the customer's e‑procurement solution and the supplier's website.

Each solution addresses needs that are clearly specific to the customers' organisation.
 

A hosted catalogue or e-cat for a limited product list

These types of catalogue are especially suited to managing lists containing a few hundred products, which are often highly recurring, and help guarantee stable prices.

However, the limitations of hosted catalogues become apparent when managing large product ranges (over 10,000 references):

  • The "static" aspect of a hosted catalogue has two major downfalls:
    • Maintaining an oversize e-cat is a complicated process, since it is not updated and generates an increasing number of orders for obsolete products (which are no longer available or delisted). Similarly, a static catalogue does not show new products, extended ranges and dynamic proposals (equivalent products at lower prices or associated products, such as accessories). This may lead to frustration for the user, who may enjoy a better experience on the supplier's e-commerce site or on the Internet.
    • Customers also have no access to real-time information on stock levels and therefore delivery times.
  • The search tools in P2P solutions are relatively inefficient and often lack precision. Once again, customers end up looking on the Internet or the supplier's website!
     

PunchOut for extremely large product ranges

The supplier's website always shows an up-to-date range with both replacement and new products. PunchOut is hooked into the supplier's information system[1] and provides information that is updated in real time, such as current stock levels and delivery times. Some PunchOut systems also offer access to all the technical documentation related to the transaction, including the order, the delivery note, the invoice and the different shipment stages (track & trace).

PunchOut systems are often suspected of making it harder to keep price changes under control. Such concerns are unfounded in the case of indirect procurement, which involves managing an extremely wide range of products with low repeat purchases: last year's purchases are different to those made the following year.

Furthermore, PunchOut systems provide an accurate insight into customers' consumption, meaning that the company can:

  • Keep track of variations in expenditure in real time and therefore fine-tune the range more easily.
  • Subsequently determine changes in the prices of the products actually purchased. There is nothing to prevent the company from factoring in such price changes, for example by retrospectively incorporating the changes into the year-end discounts to ensure stable prices.
     

The main characteristics of both solutions

 

e-cat

PunchOut

Creation

The supplier submits a CSV document (or equivalent) in the required format

The supplier's range is made available on the customer's website

Publication

By the customer or the supplier of the P2P solution

By the supplier in compliance with the commercial conditions on its website

Data verification

By the customer with each catalogue delivery

By the supplier with reports on product consumption and price changes

Ability to support the customer's standard (UNSPSC) and specific product codes

Reporting

By the customer

By the supplier by offering reports on product consumption and compliance

Access to all the technical documentation related to the transaction (order, delivery note, track & trace, etc.)

Product searches

Common to all the ranges on the solution's search engine and based on the data provided

Supplier's e-commerce site and search engine using its own data

Support for lists of favourite products, review of previous orders 

Updates

Required to reduce the number of obsolete products

Automatically performed on the e-commerce site
 

Hosted catalogues are suitable for lists of recurring and highly specific products. However, PunchOut systems are better suited to managing non‑strategic purchases comprising product ranges that are generally extremely wide. Now it is down to you to make the right choice to streamline your purchases!

 

To find out more about our e-cat and PunchOut solutions,
call Xavier Laurent on +33 (0)1 34 53 35 04 or send an email to xavier.laurent@manutan.fr.

Read our article entitled "E-procurement: what is the current state of play?"
 

[1] PunchOut systems work by repatriating the user's "basket" into the customer's procurement system in the form of a "purchase requisition". Then the purchase requisition may or may not be transformed into an order by the customer's validation process.

 

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