Accelerate Business Growth Using cXML
With the world economy growing at such a rapid pace, it’s becoming increasingly difficult for businesses to compete. Enterprise growth depends on many factors, and for a business-to-business supplier, having access to technology gives them a distinct advantage. One of the most important recent innovations in the world of B2B sales is the widespread use of cXML as an eCommerce XML equivalent. This standard was initially introduced in the late ’90s as a way to standardize the transmission of records between different procurement software suites.
The use of cXML has made its way into business procurement in the form of PunchOut catalogs and websites. These systems are developed to enable companies to complete their procurement requirements seamlessly from within their own company’s software. The purchases are then reflected in the business’s internal software transparently. This process saves time and effort when dealing with purchasing and updating a company’s internal records and inventory management. The cXML standard has gained widespread acceptance because of how easy it is to use. Since it’s based on the XML format, it already conforms to a lot of the standard characteristics of markup languages. Before we can understand how cXML automation helps businesses grow, we must first understand the role that purchase orders play in a B2B supplier’s process.
Purchase Orders and Their Role in Business
The Houston Chronicle mentions that purchase orders are legally binding documents agreed between a buyer and a seller . The seller usually delivers the goods to the buyer with the purchase order serving as security for payment. Purchase orders form a significant and critical factor in inventory management, both for the vendor and the buyer. As the supplier, a business can use the purchase order to compare their inventory with what they need to cover the order. They can also reference specific purchase orders for payment. Buyers, on the other hand, hold on to the purchase order as proof that they ordered the goods. They can also use it to determine if the items got to their location within a reasonable time.
Why Purchase Orders Matter to Vendor Growth
B2B vendors are responsible for the timely submission of purchase orders to clients. Problems arise when buyers aren’t timely with their purchase order delivery. Clients depend on these purchase orders to update their inventory as well as their internal business records. Getting these purchase orders to clients makes it easier to do business with the firm. Buyers that feel as though it’s easy to do business with a company will remain customers as long as they feel appreciated. The Harvard Business Review notes that customer retention of just 5% can lead to increased revenue between 25% and 95%.
How Purchase Orders Impact Buyer Efficiency
Until now, we’ve focused on how purchase orders impact the business of the seller. However, we can’t correctly understand how crucial purchase orders are to a buyer until we examine how it affects their own internal efficiency. For a buyer, there are a few aspects of their operation that purchase orders impact, including:
- Purchase order system updating: the primary reason companies implement a purchase order system is to get a structured system in place that helps them manage spending and procurement. All approvals for acquisitions are also part of the system, and many of them are seamlessly linked to an inventory management system that updates the current and expected stock of items automatically.
- Accurate readout of costs for budgeting: Some acquisitions might only need to be purchased once over a long period. However, there are regular acquisitions that may make up the operating costs of a business. The details of purchase orders allow the procurement department to budget for what the company needs regularly. It also allows them to perform head-to-head analysis on the visible and hidden costs of suppliers for any given product. This information can help the business make more efficient use of its acquisition resources.
- Tracking of the order fulfillment: purchase orders are a promise for delivery from the supplier. Since they are all numbered, a particular purchase order number can only apply to a single business’s order. If the buyer wants to know the specific status of an order, it’s just a matter of sending the purchase order number to the supplier for an update.
- Identification of best value for money propositions: Not all suppliers are equal. With detailed information on suppliers, a business can potentially determine where the best value for money comes from. This determination doesn’t only refer to the budgeting costs. It also references the time for delivery and the accuracy of order fulfillment. The overall value of a supplier is how well they meet the needs of the business.
Improving Business Efficiency in Delivering Purchase Order Information
As mentioned previously, one of the most effective ways of updating information about a purchase comes from incorporating a PunchOut catalog or website. Automation brings with it several benefits, not least of all, increasing the accuracy of the order updates and reducing the time before it gets to a buyer. Because of the importance of purchase orders to a business, a supplier needs to be uniquely aware of how to upgrade and improve its purchase order generation system.
As with most things, when it comes to business, simplicity is the best way to approach things. cXML is one of the most widespread data interchange formats available for procurement systems. It’s such an accepted industry standard that most procurement software suites come with cXML as a built-in method for importing data. Implementing a cXML export system for purchase orders isn’t too complicated an issue. However, it can take some time and may need specific data to be sent to buyers. The hardest thing is to implement the first cXML system for a customer. After that, it’s just a matter of copying the implementation to other customers.
Conforming to The Needs of Clients
As more businesses start implementing procurement software, it becomes increasingly important to have a method of interacting with those businesses efficiently. Companies have too much choice for them to stick with a supplier that doesn’t meet their level of technological advancement. Instead, they will go with the company that meets them halfway regarding their procurement process.
For a business to compete in this sort of environment, the very minimum requirements would be a system that exports cXML output. To reduce the timeline for implementation, a business could even eschew implementing the process for its internal management system and prioritize the client’s needs. Eventually, the company can look at exporting and integrating cXML for its own records.
The Changing Needs of Business
Suppliers need to get with the times, or they risk losing both established customers and new clientele. Ecommerce and the internet have expanded the supply field to encompass companies that can supply globally. In some cases, their prices may be far lower than what a local company can successfully meet and still turn a profit. The onus is on the supplier to find a more efficient way of interfacing with their clients. By implementing cXML exporting into their business process, they open the door to more clients that have already implemented procurement software and allow them to compete based on customer experience instead of price.
Samantha Wallace is a veteran tech writer and editor who has worked in several eCommerce companies. She has been covering technology online for over five years. She is the Content Advocate for Greenwingtechnology.com.