In a word: efficiency. Buyers want to buy with little to no error. Sellers want to sell with as little “friction” as possible in the process. If an organization needs to buy the same products or services from an established vendor repeatedly then, eCommerce Shopping or Punch-out makes perfect sense. Punch-out offers lower costs to implement and maintain in contrast to exchanging catalog files (Such as EDI 832), either directly or hosted by a 3rd party. In addition, because the buyer’s procurement system is communicating directly – in real – time with the seller’s own eCommerce site – item information is typically much more accurate – meaning fewer errors and delays once the order has been placed.
Two interesting statistics:
- Companies who start using Punch-out typically see a 35% increase in order volumes
- Companies using Punch-out see a 25% or greater increase in sales.
These two stats indicate that buyers buy more goods and services, more frequently from Punch-out enabled vendors. The obvious benefit for Buyers is they can ensure that management has control over purchasing budgets and eliminates “maverick” spending. As more companies see the benefits, more are moving appropriate purchasing to Punch-out procurement.
Buyers normally have the overwhelming task of getting supplier information – products, prices, and ordering methods – into their procurement system. There are continual costs in terms of general integration as well as the administration of the integration. This also means the suppliers who want to do business with a company that uses a procurement system have to find a way to ‘plug in’ to their system. Punch-out eliminates these hassles.
- Saves buyers time and effort
- Allows management to control purchasing budgets and eliminate “maverick spending”
- Allows purchasing to interface with other systems within the company including inventory control, shipping and receiving, and accounting
At ISS Group we recognized the need for such Business Process Improvement (BPI) solutions well over a decade ago, and today, ISS Group continues to deliver to the QAD EA community Agile Business Process Improvement (BPI) solutions, such as e-Procurement, which digitize business processes to connect people and processes via the cloud, mobile devices, and social networks, for Mid-market and Divisions of Fortune 1000 Manufacturing and Distribution organizations.
Visit our blog for more information on this topic, and STAY TUNED for our upcoming presentation on Managing Pricing Controls and Eliminating Maverick Spend…!