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Hey folks,

As promised at both Ariba Live in Las Vegas and in Barcelona, I'm posting the first of two eCommerce Value Calculators.   This is the simplified, high-level value calculator.  It should be used to help you determine where your greatest opportunity to impact your business in the areas of:

  • Working Capital Improvement
  • Increased Wallet Share
  • Efficiency Benefits
    • Invoice Efficiency Improvement
    • Purchase Order Error Reduction
    • Invoice Error Reduction

 

You can find localized calculators in the following locations. 

 

http://www.ariba.com/go/econcalc/High-Level-Directional-eCommerce-Value-Calculator-British-English.xlsx
  http://www.ariba.com/go/econcalc/High-Level-Directional-eCommerce-Value-Calculator-English.xlsx
  http://www.ariba.com/go/econcalc/High-Level-Directional-eCommerce-Value-Calculator-French.xlsx
  http://www.ariba.com/go/econcalc/High-Level-Directional-eCommerce-Value-Calculator-German.xlsx
  http://www.ariba.com/go/econcalc/High-Level-Directional-eCommerce-Value-Calculator-Spanish.xlsx

 

 

Stay tuned for the more detailed eCommerce Value Calculator that I showed at Ariba Live Las Vegas.  I'm doing some final validations and consultations with customers. 

Though your customers will frequently be the key driver in determining what type of e-catalog you implement, understanding the distinctions can help you manage the process more effectively. Here are a few guidelines to help.

 

CIF Catalogs

What are CIF catalogs? CIF (catalog interchange format) catalogs are static catalogs hosted and maintained by either you or your customer. Creating a CIF catalog is relatively simple, requiring you to set up your product or service data in a comma-separated value file (such as Excel) following a basic file header, line data, and file trailer format.

 

Who should use CIF catalogs? Because they must be manually revised in a flat file and then re-uploaded whenever updates are required, CIF catalogs are more resource-intensive to maintain than PunchOut catalogs. This means that CIF catalogs are generally the better choice if you sell smaller numbers of products that don’t require frequent pricing, availability, or other changes. CIF catalogs also don’t enable you to provide actual copies of product specifications, bills of materials, and similar decision-support resources, nor do they easily accommodate configuration rules, so they’re not effective if what you sell requires complex configuration.

 

That said, many buyers prefer CIF catalogs for the higher degree of control they provide over any revisions that need to be made, and despite the extra work involved, some companies maintain very large CIF catalogs. What’s more, a growing number of buyers are investing extensive resources to customize their CIF catalogs and add features that provide a positive user experience—a clear testament to the value they see in e-catalogs generally and CIF catalogs in particular.

 

PunchOut Catalogs

 

What are PunchOut catalogs? PunchOut catalogs let your customer’s procurement solution access content from your e-commerce website via cXML so users can search for, compare, and select what they want to buy, then return shopping cart items to their procurement application for approval and purchase. Because PunchOut catalogs are dynamic, they offer various advantages over CIF catalogs, including the ability to provide real-time pricing and availability (since updates can be made quickly and easily through your website), extensive configuration capabilities, accommodation for almost limitless documentation and other decision-support information, and enhanced customer service via faster order fulfillment and a very high-tech user experience. Level 2 PunchOut catalogs provide additional benefits, enabling customers to search for products right within their own procurement application and then be brought directly to specific “aisle,” “shelf,” or “product” level of catalogs that arise during their search.

 

Who should use PunchOut catalogs? Generally speaking, PunchOut catalogs are the better choice if you sell complex, service-oriented, or highly configurable product offerings; have large catalogs with many SKUs and line items; sell goods that require constant updates on price, description, and content; or have a high number of transactions.

 

Keep in mind, however, that implementing a PunchOut catalog typically requires greater IT resources and means more work up front, since you’ll either need to build an e-commerce website—requiring you to organize and populate a master catalog with categories, descriptions, specifications, pricing, images, and more—or retrofit your existing site to support PunchOut. Finally, you’ll also have to test your catalog to make sure it works with your customer’s e-procurement system.

 

 

In The Next Blog: Getting Started: What You’ll Need to Implement Your E-Catalog

If you don't want to wait until tomorrow to learn more, then go to A Guide to Business Commerce Integrationhttp://exchange.ariba.com/groups/supplylines/blog/2013/03/26/which-online-catalog-is-right-for-you to read the full article.

Often times, a company’s first thoughts when thinking about transaction automation are about “EDI”.  As many others do, you may be asking yourself, what differentiates Ariba against EDI?  Here are 5 top differentiators:

 

1)      Solution for all suppliers – Ariba was designed from the ground up to be a solution for every type of supplier. With Ariba, suppliers’ maintain their transaction profile preferences within a graphical user interface, and can setup the transaction process that meets their requirements. UNLIMTED SUPPLER ENABLEMENT SERVICES ensures a continuous focus on migration away from paper, so all suppliers, regardless of size, can become electronic. Ariba is a modern technology and service for the modern age.

 

2)      Supplier Value – Ariba provides revenue generating and product search tools like supplier discovery, cash management tools that accelerate collections and improve cash flow for Accounts Receivable and Credit Manager stakeholders, and provides error reports to eliminate payment risk. The Network Effect, available only with web-based, SAAS applications, creates leverage across many buyer relationships.

 

3)      Scale and Flexibility – EDI is point to point data transmission and relies on older file standards.  Ariba provides the best of BOTH worlds- we are backwards compatible with yesterday’s EDI technology, as well as providing the best of what the internet has to offer with integrated support for modern, flexible standards to meet modern age demands. This flexibility allows Ariba the ability to better serve the supplier community and automate more transactions and deliver more value.

 

4)      More than transmission - Ariba does more than just transmit data!  Ariba is a destination for functional business users to address opportunities and solve business problems. Ariba provides a feature rich, web-based application environment that provides both transaction automation AND business application functionality. This is a big difference and a great example is Smart Invoicing, where business logic detects a broad array of exceptions to ensure transactions are clean and error free. Modular based web applications like workflow, cash management, contract flip, procurement content, and discovery are other examples of doing more than moving data from point A to point B.

 

5)      We understand AP – The challenge in Accounts Payable isn’t moving data faster from a supplier to a buyer- too much risk is created if that is the only focus. The big objective for AP is CONTROL, COMPLIANCE, AND EFFICIENCY. Smart Invoicing, Workflow, and Payment Automation all deliver on these objectives. Another hidden dimension of efficiency is working capital efficiency. It is often said that the opportunity cost tied up in the Accounts Payable balance makes AP the most expensive debt on the balance sheet. Ariba Dynamic Discounting delivers on this critical dimension of efficiency.

 

What do you see as a differentiator for Ariba vs. EDI?

Do you want to know more about Punchout?  Do you have challenges with Punchout?  Learn more about Punchout from one of our Ariba Supplier Solutions Providers, PunchOutCatalogs.com, in this blog post by Matt Fisher.

Introduction

 

This post is a humble attempt to help Ariba suppliers/sellers by:

  1. Describing what a punchout catalog is
  2. Walking through the typical punchout flow
  3. Identifying some of the advantages and challenges of punchout
  4. Providing additional sources of information for your organization to become punchout capable

 

Preface

 

Even though I’ve been helping suppliers and buyers conduct business electronically with each other since Ariba’s early days in the 1990s, this is my very first post on Ariba Exchange. With every visit to the site, I’m increasingly impressed with the growing sense of community and look forward to contributing and learning from you all.

 

We’re all experts at something, and while supplier enablement is admittedly my one area of expertise, I sincerely acknowledge that there’s always more to learn from people. With that said, all of us who have worked with punchout catalogs know that no two definitions of  punchout are the same, and it’s different every time we try to explain it to someone.

 

I offer this first post to the community and welcome any and all feedback as we continue to help each other.

 

1)    What is a Punchout Catalog?

The majority of large corporations and many government agencies use some kind of eProcurement solution like Ariba Buyer to streamline and control the millions or billions of dollars of products and services that they buy every year. The employees in these organizations are being asked to use these eProcurement tools to create purchase orders rather than simply using their credit card to buy directly from suppliers’ B2C eCommerce sites or in a physical store. By driving spend through these tools, buyers gain control through approval rules, visibility through reporting, and bargaining power by driving business to contracted suppliers.

 

The preferred way for employees to create purchase orders is to use catalogs. Catalogs make it easier for employees to create accurate and detailed purchase orders that are most likely to be fulfilled without issue by suppliers. Employees would prefer to use catalogs and simply add what they need with a few clicks rather than being forced to manually type in all the required information in a “non-catalog” purchase requisition.

 

There are typically two types of catalogs:

A.     A relatively simple spreadsheet that lists supplier products or sometimes simple services, e.g. Ariba’s CIF file.

B.     More complex punchout websites that are similar in functionality to the common online ordering website. Punchout sites         have a special ability to integrate with customers that use eProcurement systems like Ariba Buyer.

 

For the less technical business owner, account manager, or sales rep, a punchout catalog is an online ordering website that your large customers can connect to in order to find the information they need about your products or services. Sounds simple enough?

 

For the more technical IT manager, website administrator, or consultant, a punchout catalog is a customized eCommerce shopping cart that integrates with eProcurement systems through a series of HTTPS posts transmitting predefined cXML documents that allow for secure authentication and ultimately the transfer of item information from the site’s cart to the buyer’s purchase requisition. Whew!

 

It’s an impressively technical solution that provides a deceivingly simple result: customers are able to get into your site securely, get a quote for what they need, then transfer all the information they need.

 

2)    Typical Punchout Flow

Here’s an attempt at walking you through the typical steps when a user (your customer) wants to buy something from you using your punchout website:

 

1.  Log In

  • Users log into the company’s eProcurement system (e.g. Ariba Buyer).
  • Unlike typical business to consumer (B2C) eCommerce, the customer will never log into your punchout site directly from the Internet, e.g. http://www.yourstore.com – it will always be accessed via the eProcurement system.
  • This is a huge advantage for suppliers as there is no need to administer hundreds or thousands of individual usernames and passwords – this is all handled on the buyer side.

2.  Browse or Search

  • The users browse or search through the potentially numerous catalogs to hopefully find the link to your punchout website.
  • Keep reading for a tip on how to increase the probability of getting found.

3.  “Punch Out” to Website

  • When users click your punchout link in Ariba Buyer, they seamlessly enter your punchout site. At first glance, it may appear that the customers have simply been forwarded to your website; however the users are actually still in their Ariba Buyer sessions – there will be an Ariba Buyer-branded frame at the top of the browser window.
  • This is where the term “punch out” stems from, as users are still in Ariba, but they’ve now connected out to your website for the sole purpose of grabbing the information they need to complete their purchase request.

4.  Transfer Cart Contents

  • Once customers have punched out to your website, they’ll search or browse for their desired product or service just like a typical online shopper would.
  • The checkout process is different, however. When users decide to checkout their carts, instead of the site prompting them for shipping and billing information, they are taken back to their purchase requisitions within Ariba Buyer, and the items that were in the punchout website carts now magically appear in the right spot within their purchase requisitions!
  • Note that customers have NOT actually purchased anything from you yet – remember, they need to send you a purchase order, so what they’ve really done is simply gathered a quote themselves with the help of your punchout site.  True customer self-service!

5.  Submit for Approval & Transmit Purchase Order

  • Once users have finished adding items to the purchase requisition, they are required to enter/confirm additional information such as shipping address, account(s) to be billed, and internal notes such as justification explanation, the requisitions may require approval before purchase orders are finally transmitted to the supplier.

One common misconception is that punchout suppliers must now switch to receiving purchase orders via cXML and start transmitting invoices via cXML as well. While this is a best practice, buyers typically don’t care HOW you receive your orders or transmit your invoices, as long as you fulfill the orders quickly and invoice accurately.

3a) Benefits for Suppliers

 

These are just a few of the main ones and I’m sure many of you can offer others:

 

  • Control the Shopping Experience (Or At Least Part of It)
    • Suppliers that simply provide local catalogs have absolutely no control over the shopping experience beyond the content of the catalog. On the other hand, a punchout allows complete control over the shopping experience and catalog content once customers enter your site.  Suppliers tend to find punchouts more empowering as they can actually see what their customer sees.

  • Update Catalog Content As Needed
    • When it comes time to update your product catalog, if you are using a CIF file, you’ll need to ask coordinate with your buyer to ask permission to make the changes then rely on them to upload the file into Ariba Buyer.  With punchout, you are allowed (and expected) to update your catalog yourself, without the customer needing to do anything.  It is a best practice to at least notify your customers of any notable changes.

  • Upsell and Cross-Sell
    • One way to take advantage of your punchout site is by upselling and cross-selling. If a customer is looking at a camera, suggest that they look at two others in an effort to push more preferred items.  If a customer has added a camera to their cart, suggest additional items they may have forgotten such as a case and tripod!

  • Become “Stickier”
    • When buyers invite you to integrate your punchout website, they’re investing time and effort in you. It’s in their best interest that the integration is thoroughly tested and your website is as user-friendly as possible. Once integrated, they typically are not in a rush to do it all over again with another supplier anytime soon.

  • Market Your Punchout Abilities to Other Customers
    • Now that you’ve taken care of the immediate need to provide a punchout solution to one of your customers, use your new capabilities to your advantage!  Issue a press release. Email all your other customers to see if they are using eProcurement. Update your Ariba Supplier Network profile. Consider joining the Ariba Ready program. Definitely contact Ariba Connection Solutions and express your desire to service additional Ariba customers: http://www.ariba.com/solutions/connection.cfm

  • Provide Enhanced Functionality
    • When you have a punchout site, you have the opportunity to continuously add value. Rather than just provide the bare minimum requirements that your customer has requested, go crazy with value-add functionality! Strive to provide the best punchout possible. Your buyers might even agree to announce notable new functionality to their users, improving your exposure. My next post will include a long list of impressive ways that suppliers are adding value for their customers.

 

3b) Challenges for Suppliers

 

Again, here are just a couple of challenges, however there are more:

 

  • Getting Found in eProcurement Searches
    • The truth is you’re essentially at the mercy of your customers when it comes to how easily your punchout link can be found. You can’t highlight your link, make it bold, or have it float to the top. You might be fortunate enough to be the only listing under your category, or you might be one search result in a listing of thousands. Once the punchout site is up, ask your buyer how best to advise customers on how to find your punchout link.
    • TIP: Suppliers should provide buyers with a list of recommended keywords to help increase the likelihood of your punchout link to be found within Ariba Buyer (e.g. if you’re a printing company add keywords like “business card, letterhead, letter head, envelope, notepad, note pad, print”).
    • NOTE: Instead of providing your buyer with a simple link to your website’s homepage, a more advanced option might be to provide individual links to every category (aisle level punchout) or even every product (item level punchout). This combination of a punchout website with a more detailed catalog file is called level 2 punchout. There are pros and cons to level 2 punchout that I’ll save for another post.

  • Deciding How Best to Go Punchout
    • If you already have an online ordering site, you have three options: try to do it all yourself (DIY), partner with an integrator to outsource at least the new cXML punchout piece, or simply license a turnkey punchout capable shopping cart.
    • This is often a difficult decision to make, especially if you’ve invested substantial time and money in your existing website. The most common approach (in my humble experience) has been to go with the option with the least risk and unknowns: a second site that is already punchout capable. I’ll save this option analysis for another post as well.
    • If you don’t have online ordering capabilities today, then the option is clear: go with a solution that can address all of your customers, both those that are asking for a punchout catalog ASAP and any other customer that may want to order online but not necessarily via punchout.

 

4) Where to Get Help

 

Ariba provides suppliers with useful documentation, live webinars, and third party solution providers:

 

1.  Ariba Supplier Network Help Page

2.  Ariba’s Live Demos

 

3.  Ariba Supplier Solution Providers

 

About the Author

Matt Fisher is the founder and COO of PunchOutCatalogs.com, the longest standing Ariba Supplier Solution Provider, providing suppliers with Ariba certified punchout capable solutions known for their extremely consumer friendly look and feel and a long list of feature functionality, implemented by experienced professionals.  Visit www.PunchOutCatalogs.com for more information.

contract.jpg

Yesterday, we posted a blog that had tips on working with Sourcing Managers.  Today, we'll discuss the last two tips.

 

Tip #7: Don’t take your customer for granted once you finalize the contract. Too many sellers view a signed contract as the end point of their efforts. Yet getting the business is only the first step; keeping it is something else again. Cement relationships by watching for new opportunities to help the customer cut costs, work more efficiently, and make their life easier. If you don’t, you may lose their trust and ultimately, their business. “If a competitor points out ways my current supplier could be saving me money or bringing value-add that they didn’t tell me about, I may bid out that business and award it to someone else, whereas if my current seller had brought it to me up front I’d stick with them,” Sherrill says. “For example, if you’re providing e-catalogs for other customers, or using EDI or pCards or things like that, you should proactively say to us, ‘Do you want to use EDI? Because we can do it; please set us up.’ That’s always better than us having to reach out to you.”

 

Tip #8: Do follow good financial practices. For example:

  • Don’t invoice without a purchase order. Though the best practice is not to render service till you’ve gotten a PO, internal users will often ask you to move forward while promising to get the PO in the system. While that may be okay to a certain point, be sure to get a PO before sending your bill. “Invoices that don’t reference a PO delay the payment process and cause other match exception problems,” Sherrill says. “Instead, they need to insist that the end user gets the PO to them so they can reference it in the invoice.”
  • Know the buyer’s back-end AP processes and automate when possible. Dealing with the myriad ways sellers want to submit invoices creates headaches for buying organizations, so make it your priority to learn and use their preferred method. If e-invoicing is an option, be sure to offer it, since it saves you and your customer effort and expense and greatly increases accuracy.
  • Manage your cash flow effectively. Do whatever it takes to ensure that your bills are paid in a timely fashion and your other cash flow needs are met. “We’ve had suppliers come into our office and wait for AP to print off their check so they could pay their subcontractors and prevent legal action being taken against them,” Sherrill says. “That doesn’t look good.” Resources like Ariba Receivables Financing and dynamic discounting can help you get the money you need when you need it.

 

This post is part of the current issue of Ariba Supply Lines. Ariba Supply Lines is a quarterly newsletter that provides valuable tips, best practices, and the latest thinking to take your online business relationships with your buying customers to the next level.

To subscribe to this permission only newsletter, please click here.

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