In a recent post we talked about the opportunity available to B2B sellers if they tap into the lucrative e-procurement channel. Today, we’ll answer a question that many of you probably asked yourself, “Why can’t my e-procurement customers simply access my web store directly through their browser without Punchout?”
Simple question. Simple answer. Your customer has invested millions in an e-procurement system. Their ROI (return on investment) is based on 100% of purchases being originated in, and processed by, the e-procurement system. Because of this, using it for all purchases is often mandated by their corporate purchasing policy, making going outside the system to place an order (for example, going directly to your web store from a browser) a big no-no. This is easier understood when you compare the ordering process without an e-procurement system (e-Commerce Orders) to the process with an e-procurement system (e-Procurement Orders.)
Without an e-procurement system, the process is basically the same as using Etsy, Overstock, or any other consumer-type web store. You shop, create a cart (which becomes your actual order), your credit card gets charged, and the seller fulfills the order, as seen in the illustration below…
The process above offers no control over what’s being ordered, the quantities, the price, and in the case of online marketplaces, who the actual supplier is! In B2B, this type of buying goes by many names – “maverick spend”, “contract leakage”, “tailspend” – and is the exact problem e-procurement systems were designed to fix!
But when ordering from an e-procurement system, the cart does not become an order. It must first be approved by the e-procurement system, as seen in the illustration below…
During that approval process, the e-procurement system can make changes to quantity, price, and shipping options; can remove items and even drop the cart altogether.
This is where Punchout enters the picture. Adding Punchout capability to your e-commerce web store allows it to support the e-procurement ordering process described above.
So, just having an e-commerce web store isn’t enough if you want to access the lucrative e-procurement channel – you need Punchout capability too.