As Coupa’s web-based purchasing system has grown, we’ve been asked for guidance on what the “best” ways are to manage supplier content. The options include:

• Punchout: directly connect your web-based purchasing system to a supplier’s web store
• Local Catalog: load or have the supplier load a standard list of items and prices straight into your web-based purchasing system
• Web Form: a series of customizable fields that structure an employee’s request for goods or services
• Free Form: simply typing in a request as text, often including documents supporting the request or providing detailed information as attachments

Here’s a visual aid that captures our beliefs on when to use what method:

The chart on the left maps commodities by “the number of items under contract” vs. “the velocity of contract changes (items, $)”. Our belief is that as the number of items increases, or the velocity of change increases, punchout becomes the preferred method. Connecting to an office supply vendor via punchout, for example, is a best practice.

The chart on the right maps commodities by “the price of what you’re buying” against “the complexity of what you’re buying”. Both catalogs and punchout work great up to a point, but once the price or complexity increase enough, “free form” or “web form” entry becomes preferred. Legal services and Service Repairs are perhaps two clear examples where a “web form” or “free form” approach is preferred. This doesn’t mean these purchases should be off-contract, in fact far from it. Enforcing contract pricing via a web form is just as easy & just as vital as a catalog-based buy.

If this sounds complicated, and you’d prefer a few simple guidelines to help you determine the right way to manage supplier content, here you go:

• If it’s a major distributor, choose punchout
• If your contract covers more than 1,000 items, choose punchout
• If the price changes every week, choose punchout
• If the items need to be configured (business cards, non-standard IT equipment) choose punchout
• If your contract covers less than 300 items, choose a local catalog
• If you want to drive standardization and a reduction in ordering, choose a local catalog
• If the price is fixed for at least six months, choose a local catalog
• If it’s a recurring service need, use a web form
• If it’s a complex, high-priced service, type it in free form
• If you will never buy it again, type it in free form

Of course there are exceptions to each of these rules, and so if you find yourself deviating from our guidelines, that’s okay. The good news is it is so much easier to create and manage efficient contracts with your supplier base once you’ve begun using a modern web-based purchasing system. And remember to negotiate hard for better pricing! For most commodities, given the economy, it’s a buyer’s market.