Online Catalogue Management
What is Online Catalogue Management?
A vanilla web site advertising what your company does with a few links to explain product and where to get it is simply replicating the hard copy world of glossy hand-outs - serious contenders for on-line world pay-back need to move beyond brochureware to electronic catalogues
Most organisations have an inventory containing a list of goods, parts and products and services on offer, along with a description, model and order numbers. Converting that information into an electronic format and taking it on-line can represent a major shift forward in efficiency, cost savings and customer service.
In the past, orders may have been mailed, phoned or faxed in by the buying organisation or individual, which limited direct interaction. The catalogue is an important means to migrate your customers from browsing shelves and hard copy inventory lists to a closer relationship where a greater level of service can be provided.
The catalogue can be populated from Web-based interface or uploaded from a spreadsheet, so the technical capabilities of the supplier are not significant. If the majority of your customers purchase on credit using a purchase order number, then an on-line catalogue represents a very small transition for them, and indeed added benefits of knowing everything is current. Going electronic can eliminate the need for a customer order entry staff
Having your inventory on-line means you can keep it up to date as changes occur, pricing increase or discounts are offered rather than the cost of having to reprint your catalogue each time there’s a new supplier, new range of products.
If the on-line catalogue is set up properly using flexible technology the approach can be replicated across many suppliers giving you a much wider product range and a more competitive offering for your customers. As customer see your on-line offerings automated and extended there’s the potential for an increasing number of purchasers to come to your site.
Direct interaction with customers brings with it some notable benefits:
- reducing the cost of acquiring and processing an order
- reduction in order errors and reduced return rates
- improved customer service
- establishing a direct marketing tool.
- reduction in order errors and reduced return rates
Issues to consider
Automated purchase systems for example need to have the buy-in of everyone involved from senior management down to those responsible for buying and selling within an organisation if there’s to be a cost-effective means to create and maintain electronic catalogues.
One of the main obstacles to supplier’s getting involved in on-line business has been a lack of standards that don’t lock companies in to proprietary technology. The rule of thumb should be to have an open set of standards that make it possible for much wider participation.
You should be able to build a catalogue once and use it many times for multiple purchasing solutions that embrace small to medium as well as large partners. This can be achieved by taking the time to know the kind of solution used by companies you regularly deal with. Look around for software that is flexible enough to allow you to work with as many of those partners as possible, using standards like XML or EDI which translate more difficult formats on the fly.
The key to achieving benefits from internet-based purchasing systems is the widespread adoption of supplier enablement and content management tools based on OBI (open buying on the Internet) standards.
In the past there have been many different and incompatible standards used in different phases of B2B implementation. Small to medium businesses in particular were the ones that missed out and even for larger firms the need to generate multiple catalogues to meet different standards was a major impediment.
In the past couple of years OBI standards have evolved across the board making supplier enablement and in particular the use of catalogue much simpler and less costly. There are at least three standards currently:
- OBI (open buying on the internet): supplier-neutral standard used by 90 per cent of all the major B2B buy-side procurement suppliers. This eliminate vodro lock where trading relationships zare influenced by the technology employed by the buying organisation or the supplier and the protocols used in their catalogue.
- cXML Punchout: Primarily used by Ariba, but lacks much of the data required to manage procurement
- OCI Roundtrip: Used by Commerce One and SAP, also lacks some procurement information required by purchasing organisations.
- cXML Punchout: Primarily used by Ariba, but lacks much of the data required to manage procurement
Other Current Issues
- Much of existing catalogue content is not ready for dynamic B2B ecommerce
- 60% of catalogues exist on paper
- Content is often constructed in different and incompatible formats
- Product information is not classified or presented in a uniform or consistent format
- Product information is often out-of-date, incomplete, or simply inaccurate
- The average supplier needs to update 25-50% of their catalogue content annually
- Price updates typically occur on 125%-150% of the items annually (many items receive more than one update annually)
- Frequent changes result in high maintenance costs
- 60% of catalogues exist on paper
(Source: Ox International)
Importance of good content management to buyers
- Ensures fast acceptance by users
- Removes drudgery of technical issues surrounding content, allowing purchasing professionals to focus on strategic procurement issues
- Allows capture of cost savings. A fit for purpose catalogue that has good search capabilities and standards allow reduced effort in buying materials and services. The better the content the easier it is to search and select items.
- Avoids expensive ongoing maintenance by ensuring update processes are robust.
- Standardisation of materials and services removes duplication.
- Enables management by exception e.g. for price changes.
- Removes drudgery of technical issues surrounding content, allowing purchasing professionals to focus on strategic procurement issues
Importance of content to suppliers
- Suppliers should aim to produce an electronic catalogue that will work on many platforms to avoid rework (i.e. create once, use many) and expense.
- Allows product and marketing managers to focus on content quality and branding by removing many or all of the technical hurdles of catalogue creation.
- Empowers sales managers to respond quickly to customers, or win new accounts
- Enables rich data to be electronically available to buyers
- Allows product and marketing managers to focus on content quality and branding by removing many or all of the technical hurdles of catalogue creation.
What are the steps of a Catalogue Content Management System?
There are a number of steps involved to ensure that content is managed correctly. The stages include reviewing, mapping, normalisation, rationalisation, enrichment and categorisation. It is necessary to complete this process against a set standard - usually it is best to follow the UN/SPSC classifications, unless another appropriate taxonomy is available. The following guide details what occurs in each of these processes:
- Normalisation involves ensuring the content is consistent. Thus, the units of measure are usually ANSI or EDIFACT or any other recognised UOM measure. The Country Code for each product is set according to the ISO 3166-1 standard - a three-digit code maintained by the United Nations Statistics Division. Normalisation also involves expanding any abbreviations out to the full text equivalent.
- Rationalisation involves reordering descriptions to present them in a more logical sequence. For example, '12 Volt Lantern Battery' would become 'Battery 12 Volt' as 'Battery' is the product, followed by the type 'Lantern', followed by the Rating/Voltage figure.
- Enrichment is the process of adding additional content to the catalogue.
- Price Breaks refer to the ability of suppliers to assign different pricing structures for certain customers. Some systems allow you to have several different prices for each product or service - a different pricing structure can be assigned to each client, allowing for an extensive amount of flexibility.
- Rationalisation involves reordering descriptions to present them in a more logical sequence. For example, '12 Volt Lantern Battery' would become 'Battery 12 Volt' as 'Battery' is the product, followed by the type 'Lantern', followed by the Rating/Voltage figure.
What are the key success factors?
- Manage the technical complexity by selecting a low cost electronic catalogue hosting solution (see options below) and employing content management experts where required
- Don’t underestimate the economics of catalogue creation and maintenance – it is more complex and costly than it appears at first glance.
- Conflicting demands arise from poor communication and lack of understanding between buyers and suppliers. Get together and talk about it.
- Plan for scalability at the outset i.e. how to deal with increased volume of SKUs.
- Don’t underestimate the economics of catalogue creation and maintenance – it is more complex and costly than it appears at first glance.
Supplier Catalogue Hosting Solutions
- Supplier hosted catalogue – a ‘one-to-one’ solution where the supplier hosts the catalogue and chooses the technology used to deliver it over the Internet. The buyer accesses the supplier’s website.
- Advantages – Supplier control over content and pricing.
- Disadvantages – Supplier has to resource the content management; invest in e-commerce infrastructure; and may be unable to communicate with buyer application so can be complex, expensive and risky.
- Buyer hosted catalogue – a ‘one-to-one’ solution the buyer hosts the catalogue and chooses the technology used to deliver it over the Internet. The supplier accesses the buyer’s website.
- Advantages – Buyer control over content and pricing.
- Disadvantages - Buyer has to resource the content management; invest and maintain e-commerce infrastructure; and may be unable to communicate with supplier applications so can be complex, expensive and risky.
- Third party aggregator – a ‘many-to-one’ central depository for supplier catalogues. It is thought that this service is not available in New Zealand except via an e-Marketplace.
- The e-Marketplace (electronic commerce hub) model – a ‘many-to-many’ solution
- Advantages – eases burden on suppliers because they only need to put their catalogue on once (per e-marketplace) supported by buyer-specific price lists; cheaper as marketplace provider provides all e-commerce infrastructure.
- Disadvantages – less control.
- Hybrid e.g. RoundTrip.
- Advantages – combination of above
- Disadvantages – combination of above
- Advantages – Supplier control over content and pricing.
Why consider outsourcing catalogue content management?
- Cheaper – less training of staff, hardware and software requirements (including upgrades)
- Faster – SupplyNet has produced 100K’s of SKUs so can do it faster
- More accurate – SupplyNet experience and can make recommendations about enriching content which supplier won’t have experience with
- Should be better customer satisfaction taking into account the above
- Faster – SupplyNet has produced 100K’s of SKUs so can do it faster
In the future, regardless of the marketplace or supplier software, buying organisations will be able to buy from any supplier they choose.
Source: SupplyNet; www.buyitnet.org; www.oxinternational.com, PSB Group
