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F R O M P A P E R T O P R O C U R E M E N T

E F F E C T I V E C A T A L O G U E C R E A T I O N A N D M A N A G E M E N T

F O R B U Y E R S A N D S U P P L I E R S

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Commonwealth of Australia 2004

This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any

process without the prior written permission from the Commonwealth. Requests and inquiries concerning reproduction and

rights in this publication should be addressed to:

Manager,Public Affairs,

Department of Communications, Information Technology & the Arts

GPO Box 390,

Canberra ACT 2601


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C O N T E N T S

INTRODUCTION 5

ALIGNING TECHNOLOGY AND BUSINESS NEEDS 7

WHAT IS AN ELECTRONIC CATALOGUE? 9

Why do you need an electronic catalogue? 10

THE BUSINESS ENVIRONMENT 11

The Business Problem 11

Why Should Catalogues Interoperate? 13

What is Interoperability? 13

Where Does Interoperability Occur? 15

Hosting Solutions 15

Electronic Marketplaces 15

Supplier Hubs 15

Resellers 15

Data Synchronisation 16 Suppliers Catalogue 16

Punch-out 16

EXTRACTS FROM REAL CASE STUDIES 17

MAKING YOUR ELECTRONIC CATALOGUE 21

Step 1 Developing the business case 22

Template for the Measurement of eCatalogue Costs and Benefits 22

Step 2 Scoping the buying environment 27

Standards 28

Global Product Standards 28

Standards Organisations 29


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Step 3 Mapping your business processes 30

Step 4 Developing your catalogue 31

Catalogue development steps 31

Product categorisation 32

Customising your Coding 32

External links 33

Product Images 33

Step 5 Making your catalogue available to buyers 34

Supply Chain / Inventory Integration 34

Buyer hosted content 34

Supplier Hosted Content 35

Electronic Marketplace hosted content 35

Supplier Hub Hosted Content 35

Step 6 Getting assistance 36

APPENDIX I 37

APPENDIX II 67

APPENDIX III 73


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This guide is designed to help you, an Australian supplier, publish and maintain electronic catalogue

data in a format suitable for electronic procurement.

The guide provides practical advice on:

reducing the effort of maintaining catalogue data electronically

minimising the commercial and technical risk of complying with the different e-procurement

technologies used by buyers

the cost-benefit of maintaining an electronic catalogue

The guide is the product of a joint government-business initiative. It was funded through

the Information Technology Online (ITOL) grants program, which is managed by the Federal

Governments Department of Communications, Information Technology and the Arts (DCITA).

The initiative involved the following organisations:

Acumen Alliance

Australian Procurement and Construction Council

Australian Retailers Association

Commonwealth Bank of Australia

Cyberlynx Procurement Services

Cyberlynx Supplier Hub

LogicaCMG

New South Wales Department of Commerce (Smartbuy)

Sensis Pty Ltd

South Australia Department for Administrative and Information Services (DAIS)

South Australia Department of Further Education, Employment, Science and Technology (DFEEST).

I N T R O D U C T I O N


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This spread of organisations means the initiative involved organisations representing:

buyers from both the private and public sectors that utilise different purchasing strategies and

different electronic procurement technologies

service providers with experience in e-catalogue creation and hosting capabilities

industry and government associations to ensure trust and independence in the development of

this guide

The buyers engaged in this initiative nominated a range of suppliers of various size, industry and

geography. Their catalogues were enabled against a range of real world e-procurement situations.

Their experiences are documented in the case studies found in the appendix. It also means the

information presented here is practical and based on actual experience.


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Getting Past the Hype

As electronic commerce between businesses has evolved, new technologies have entered the

marketplace which claim to be able to automate your supply chain, or run your business at

lightning speed, or automate your business processes.

The dotcom boom, however, and subsequent crash has brought home to technology providers and

consumers that these technologies need to deliver real business benefits, rather than hype.

The fundamental e-procurement messages that have developed in the real world are

straightforward business imperatives including:

selling more, more quickly;

minimising data errors;

reducing set-up costs;

tracking;

getting paid for sales more promptly;

improving maintenance efficiencies; and

minimising non-core business activities (i.e. minimising time wastage on data entry and

administrative processes).

These priorities need to be the drivers in implementing e-commerce technology. All of these

priorities hinge on the efficient interchange of data electronically both internally, within

organisations, and externally, between the organisations trading partners and systems. One example

is getting products into a warehouse and out again.

A L I G N I N G T E C H N O L O G Y A N D B U S I N E S S N E E D S


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To make these systems work together effectively they must have

and share high quality core data. Importantly, data being sent

between systems will need to be in a format that is understood

by both the receiving and sending systems. This includes:

data to do with inventory and customer details;

data which forms the basis of the interaction with a trading

partner, and which can be easily utilised by these mindless

machines to do seemingly straightforward tasks like sending

an invoice or receiving a purchase order.

Its when these systems dont agree with each other because they

use different languages to describe the core data, for instance,

that simple tasks like sharing information can become almostimpossible.

Core data, therefore, represents the key component of any

product catalogue. Sometimes called item master data, it can

include:

product identification codes / skus

product descriptions;

trading partner identification codes;

stock/volume; and

pricing,

This guide attempts to cut through the hype and provide you

with practical advice on how you can put your product catalogue

online to open up a new sales channel while helping your buyers

to also move to online purchasing.

Assisting you to make educated decisions about creating and

utilising this core data is what this guide aims to address.


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W H A T I S A N E L E C T R O N I C C A T A L O G U E ?

It is common for all suppliers, such as yourself, to have a list of products or services that are for

sale incorporating a price list. For ease of reference, we refer to this as a suppliers catalogue.

When a suppliers catalogue is made available online, it has the potential to become more than

just a list of products and services available for purchase. In order to conduct efficient electronic

business to business transactions, electronic catalogue requirements differ greatly from their

print counterparts in that the structure of information in the catalogue needs to be Consistent

(ie; organised into an explicit and extensible set of product related categories and subcategories)

Complete (products well described), Comprehensive, and Enriched.

Enriched catalogue content refers to additional information in the catalogue - information other than

text for describing products and services. In an electronic purchasing based environment catalogue

products can be linked to website URLs, with rich desriptions that are normalised and standardised,

additional images, Adobe PDF files, Word documents, 3D files such as Multimedia files, AutoCAD or any

other MIME compatible file with the aim of providing product content for buyers to find, compare and

buy in a more interactive, intuitive and easier way than paging through print orientated publications.

In transforming these catalogues online and into an electronic format they have the potential to

become more than just a list of products and services available for purchase.

For example, by linking this catalogue to a buyers purchasing system it will become a living part of

the purchasing and selling process. In this way the buyer will be in the position to select products

automatically or manually from the suppliers catalogue, include these in a purchase order, and

then seamlessly send the order electronically to the supplier. Simultaneously, on receipt of the order,

the supplier would be able to upload the buyers order(s) into their sales, inventory and financial

systems. In the complete purchase-to-pay-cycle, the supplier would then dispatch the goods to the

buyer; send an electronic invoice to the buyer; who would be in the position to do a three-way data

match (purchase order, goods receipt, invoice) and make an EFT payment directly to the supplier

while automatically uploading the tax invoice into their financial system.

As demonstrated above, online catalogues have the ability to become powerful enablers in reducing

the cost and time of buying and selling.


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W H Y D O Y O U N E E D A N E L E C T R O N I C C A T A L O G U E ?

A suppliers catalogue is often the central reference for many other business processes within an

organisation. A company who sells car parts, for instance, would find it difficult, if not impossible,

to operate without a list of those parts. Concurrently, it would find it difficult to survive without

having access to its suppliers catalogues on which it would rely for inventory, stock availability and

pricing information.

As a supplier, if your catalogue data is not available electronically then you will not be able to link with

external systems, for example a buyers e-procurement system. The buyer will be forced to enter your

companys data manually into their purchasing system(s) which could pose a major effort given the

size of some catalogues and the number of suppliers that a buyer typically deals with.

The management of core data from a simple over-the-counter sales system to a fully-fledged

e-business trading system - is a prime consideration when trading electronically. Central to the

process is the use of recognised national and international standards (see page 28). The application of

recognised standards will make your e-catalogue far more flexible and scalable: ie. your data will be in

a better structure to be able to be transformed and read by the numerous e-procurement technologies

used by buyers, resellers and e-marketplaces.

Fig 1. Illustrates the relationship within a typical buying organisation between the electronic

catalogue and other business systems

Purchasing Systems

Reporting Systems Sales Systems

Catalogue

Master Data

(eg Products)

Costs and controls

Pricing and products

Transaction

information

Product information

Product information

Product updates

Requests for info

Pricing and product info

Catalogue Context

Accounting Systems


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T H E B U S I N E S S P R O B L E M

This paper is designed to assist you in making informed decisions about the creation and publishing

of a master electronic catalogue. The decision to proceed with this task can be particularly difficult

if your trading partners are large organisations as the choices that they make could have a strong

influence on your electronic catalogue system selection.

A scenario that demonstrates this issue could go something like this:

A small supplier creates and sells a particular

range of products, in which it specialises.

Two large customers make up 80% of the sales

for that supplier

Large Customer One decides to implement an

electronic buying system. It sends a letter to

all suppliers giving them a deadline to become

systems compliant by providing their cataloguedata in a prescribed format.

T H E B U S I N E S S E N V I R O N M E N T

Small Supplier

Small Supplier

Large Customer

1

Large Customer

2


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1 2 |

The small supplier, afraid to lose

its biggest customer, puts in the

system requested by Customer

One. The supplier invests several

thousands of dollars in creating an

electronic product catalogue that

can be read by the Customer Ones

buying system.

Large Customer Two decides to

trade electronically also and issues

a similar letter to its suppliers.

However it has chosen a competing

system that requires catalogue data

in a different incompatible format.

Small supplier is faced with a

difficult choice.

The supplier is now forced to:

make an additional investment and develop a system compatible with Large Customer Two;

invest in upgrading its existing system so that it will work with both customer systems; or

risk losing its second biggest customer.

Even if Large Customer Two is not lost, it is likely they will pay slower and order less than they used

to simply because faxing for them is no longer their preferred method of business. Worse still, they

may begin to purchase from a competitor who does interact with their system.

Another scenario could be that the Large Customer Two will require the supplier to maintain an

extra list of their product directly on the buyers own system (eg via a website) or though a hosted

solution. This would mean that the supplier would be forced to maintain multiple copies of their

own product information perhaps across multiple platforms. This would pose a nightmare when it

came to updating and re-keying data creating a breeding ground for errors.

Small Supplier

E-enabled

Large Customer1

Large Customer

2


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F R O M P A P E R T O P R O C U R E M E N T E F F E C T I V E C A T A L O G U E C R E A T I O N A N D M A N A G E M E N T F O R E N G A G I N G B U Y E R S A N D S U P P L I E R S | 1 3

W H Y S H O U L D C A T A L O G U E S I N T E R O P E R A T E ?

In the online world suppliers who want to maximise the use of their electronic catalogues can

publish their catalogue in a variety of locations to reach the widest possible customer base. You can:

publish your catalogue on your web site;

publish your catalogue on your resellers websites;

publish your catalogue on an external electronic marketplace;

distribute your catalogue electronically to your buyers so that they can import it into their own

procurement systems; or you can make your catalogue available to your buyers as part of a

supply chain management initiative.

A key problem in achieving this is the fact that buyers tend to use different purchasing technologies,

formats and standards from each other as well as from their suppliers. The cost of recreating and

distributing catalogue data to suit the different purchasing technologies, formats and standards

used in the marketplace, therefore, can be prohibitive, especially if you are a small business.

Resellers, in turn, face a similar level of complexity. For instance, they may wish to obtain catalogue

content from their client base and present a combined product list in a catalogue established to

their own standard. Naturally, to achieve this would require the reseller to contribute considerable

time and effort in cleaning the data from the various sources.

Not surprisingly, supplier catalogues can also vary significantly making cross-referencing difficult.

For instance, you probably prescribe to a different way of entering your data in your cataloguecompared to your competitors, your own customers and even your own suppliers. A classic example

is units of measure: is it e, ea, or each?

This is where catalogue interoperability comes in.

W H A T I S I N T E R O P E R A B I L I T Y ?

Interoperability is the capacity to move data between different software applications, for instance,

in the case of financial and office management applications where sales systems may need to link

with Microsoft Excel spreadsheets.

A high level of interoperability means that a catalogue developed and published in one application

can be accessed and read by a different application automatically. A low level of interoperability

means catalogue updates, orders, change requests and so on, must be manually entered across

applications. This is sometimes called the swivel chair effect in which a supplier will receive an

order using one technology (eg. web site, fax machine, e-mail) and must re-key the information into

a back-office application in order to initiate the business process.

Put simply, interoperability enables the translation of catalogue content from one standard to

another. A highly interoperable system knows, for example, that ea in one catalogue equals each

in another.

THE

BUSINESS

ENV

IRONM

ENT


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Because different catalogues can be made to interoperate, suppliers can maintain their catalogue

content in their chosen standard, and publish the same content across different catalogues that

follow alternative standards used by buyers, resellers or other electronic systems.

The critical issue is the ability to manage catalogue item master data while simultaneously having

the flexibility to exchange your catalogue with your trading partners confidently and securely.

W H E R E D O E S I N T E R O P E R A B I L I T Y O C C U R ?

Catalogue product content may be found in a variety of locations, all of which could benefit

from the exchange of content via interoperability. The model below exhibits actual examples of

interoperability. This model has been adopted by the companies represented in the case studies

attached to this paper.

Figure 1: Catalogue content hosting and sourcing

Buyer ERP eProcurement

Suppliers CatalogueCatalogue Content

Resellers

Hosting Solutions

Catalogue

ar etpla e

ata S ro isatio

Supplier u

Punch-outPunch-out


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Hosting Solutions

There are a number of services available that host catalogue content for suppliers, such as yourself,

and who will make this available to buyers. The catalogue hoster may require you to provide data in

a prescribed format.

An example of a hosted solution is Westpac Qvalent. These catalogue hosters typically have their

own standards that suppliers can use and may include a range of services which includes catalogue

development, product categorisation and data cleansing.

Electronic Marketplaces

There are a number of online marketplaces in Australia that bring buyers and suppliers together.

These can take the form of closed marketplaces, such as smartbuy used by New South Wales

Department of Commerce (www.smartbuy.nsw.gov.au) or industry-focused marketplaces, such as

some of those in Marketboomer (http://www.marketboomer.com/).

Similarly to catalogue hosters, e-marketplaces may require suppliers to provide data in a prescribed format.

Supplier Hubs

Supplier hubs provide a hosted Supplier managed catalogue interoperability service. Also known as

content aggregators, they take catalogue content from a variety of suppliers, clean it and translate

it into the standard of other catalogues, before making this data available to those catalogues. An

example of this model is the Cyberlynx Supplier Hub (www.supplierhub.com.au).

Resellers

Resellers sell products from a variety of manufacturers or wholesalers often in a retail setting. As

a result, resellers will usually develop their own uniform catalogue that brings together all their

products, from their various suppliers, into the one catalogue location.

For a supplier who sells through resellers, making it easier for their resellers to receive and display

their catalogue content, therefore, will increase their potential sales.

As a reseller may sell products on behalf of multiple suppliers it is important, if you are considering

using a reseller, that your product catalogue can be easily translated into the format required. The

reseller will then be in the position to use interoperability to translate your catalogue content, aswell as the content of other suppliers, into their own standard for their own catalogue.

THE

BUSINESS

ENV

IRONM

ENT


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Data Synchronisation

Some buyers may have sophisticated e-procurement systems

capable of storing content from their suppliers. The variety of e-

procurement systems available to buyers means that there will be

a corresponding diversity in the catalogue formats required.

This is where data synchronisation comes in. Data synchronisation

means that all changes made to a suppliers Catalogue Item

Master File will be automatically picked up, translated into the

appropriate standard, and sent to the other supply chain trading

partners where synchronous changes will be automatically made.

While there are various solutions and organisations that can

assist with this synchronisation effort, EANnet (www.ean.com.au) provides an excellent example.

Suppliers Catalogue

Suppliers, such as yourself, can host their own catalogue content

and have their buyers access the content directly online. This

access can be automated, or alternatively, suppliers can enable

buyers to access their catalogue system via a log-on process.

An example of one of the better-developed supplier catalogues

or transactable websites is Corporate Express (www.ce.com.au),

which has a business-to-business Internet ordering connector.

Punch-out

A term originally coined by Ariba, punch-out is now a

commonly used term in electronic procurement for gaining

access to catalogue data. In this situation, a buyer will use the e-

procurement module located within their financial system or ERP

where they will be able to punch-out to an externally hosted

supplier catalogue. Once in this external catalogue, they will be in

a position to browse and search for what they want to buy before

putting the product in (an electronic shopping cart) and returning

this information to their financial system; attaching it to their

requisition, and using their own purchase order process.


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A number of e-procurement scenarios that suppliers typically deal with in everyday operations were

reviewed as part of the development of this guide. These scenarios included:

presenting e-catalogue through a hosting service;

presenting e-catalogue through a marketplace;

presenting e-catalogue direct to a buyer e-procurement system; and

remote shopping by a buyer.

What the suppliers engaged in the development of this guide learnt was that they could publish

interoperable catalogues. In particular, they found that a catalogue published by a supplier to

the South Australian Department for Administrative & Information Services (which use Qvalent

technology) could also be read by a different buyer, the Commonwealth Bank (which use Ariba

technology and the Cyberlynx Supplier Hub). They discovered that interoperability demonstrated the

benefits of online catalogue development, catalogue interoperability, and online purchasing.

Below is a summation of the experience of the suppliers. Full case studies are detailed in the appendix.

The Commonwealth Bank of Australia successfully utilised supplier catalogues from multiple,disparate sources including the NSW Department of Commerce smartbuyTM and the Westpac

Qvalent marketplace. By utilising the Cyberlynx Supplier Hub to exchange Suppliers catalogues,

the CBA was able to acquire the content in a format suitable for use within their eProcurement

system (Ariba). Suppliers who participated in this project included Citisoft (a SA Government

supplier), Interface (a NSW Government supplier), and three CBA promotional suppliers (Rave

Marketing Services, Novel Innovations, and Image-On). The supplier catalogues were made

available to the Banks staff, for the purposes of sourcing items which would become bank

branded products for use in CBA promotional campaigns (eg; Umbrellas, Caps, Golf Balls, etc).

The sourced items would then form the basis of a requirements specification which would then

be forwarded to the Banks design house for the purposes of creating a request for quotation(RFQ). Access to the supplier catalogues on Supplier Hub were also made available to the design

houses to verify product specifications and requirements prior to posting out the RFQ.

E X T R A C T S F R O M R E A L C A S E S T U D I E S


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In this instance, interoperable catalogue content between the South Australian Qvalent catalogue,

smartbuy New South Wales catalogue, and the Cyberlynx Supplier Hub, provided the Bank with

a wider range of suppliers and product. The Commonwealth Bank of Australia was able to aquire

electronic catalogues from suppliers in the required format without having to undertake manual

manipulation.

There were benefits to both the Bank and suppliers in this process. Suppliers, for instance, were able to

place accurate and detailed product information before key decision makers and potential new buyers

while buyers were able to identify products with a greater level of accuracy, consistency and efficiency.

Commander Australia, a supplier to the South Australian Government Department for

Administrative and Information Services (DAIS), previously managed its catalogue via a

spreadsheet emailed to buyers. Commander developed its online catalogue with the assistance

of Sensis. Once developed, this catalogue was successfully uploaded into the Westpac Qvalent

system, which is used by DAIS for their online purchasing. Buyers in DAIS were then able to

place purchase orders with Commander using the online catalogue content made available, via

Westpacs B2Buy portal.

In this case the catalogue interoperability capabilities of Sensis and Westpac Qvalent enabled

Commanders products to be available to Government buyers.

The trial demonstrated that DAIS buyers preferred to use the online catalogue rather than the old

spreadsheets, which simultaneously led to greater use of electronic rather than fax or telephone

orders. Commander also found that their orders were easier to manage and that there were benefits

in invoice payment times and fewer invoice errors.

In South Australia, Aish Data and Design, a drafting and printing supplier also had their

catalogue developed with the assistance of Sensis. Their catalogue was then made available to

the Westpac Qvalent system for purchasing by the South Australian Government (DAIS). Aish

found the development of the catalogue was relatively simple and that it was easy to amend

prices and other changes. Aish has subsequently seen a reduction in telephone communications

with DAIS and increased accuracy of orders.

In NSW, the Cyberlynx Supplier Hub was used to translate supplier catalogues that had been

exported from the NSW Government smartbuyTM Marketplace. The Cyberlynx Supplier Hub was

used to prove that suppliers, who created electronic catalogues for one environment, including

extensive product attributes and UNSPSC Codes, could take advantage of the Hubs capabilities to

convert the catalogue into different formats that were suitable for use in other buyer purchasing

systems and Marketplaces..

The trial demonstrated that electronic catalogue interoperability could be achieved between

catalogue hosting providers which in turn, provided suppliers with the benefit of creating their own

catalogue content once for distribution across multiple catalogue based systems.

The South Australian Governments Westpac Qvalent system and New South Wales Governments

smartbuy system, successfully trialled a punch-out process. Using the Open Catalogue

Interface (OCI), this enabled a user logged into smartbuy to punch-out to the Westpac

Qvalent catalogue, browse, search and select items for inclusion in a shopping cart. The user was


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then able to add these items to a shopping cart in smartbuy while simultaneously enabling the

purchasing workflow to continue.

Similarly, South Australian Government buyers in Westpac Qvalent were able to punch-out

to the smartbuy catalogue, capture product information, and return it to a shopping cart in

Westpac Qvalent to create a requisition and purchase order. This demonstrated that for ad hoc

purchasing, buyers could access product information from a variety of catalogues and integrate

that information as part of their normal purchasing process. This demonstrated another way for

suppliers to have their catalogue content hosted in one location and made accessible to a wide

range of buyers from other electronic procurement systems.

Cyberlynx Supplier Hub and Westpac Qvalent successfully exchanged catalogue content in

both directions. Cyberlynx provided Westpac Qvalent with a catalogue for the supplier Novel

Innovations. The catalogue was exported in a format complying with the Westpac Qvalent

template and when Westpac Qvalent took the template it converted it into an XML fileautomatically and loaded it into the Westpac Qvalent system.

The Cyberlynx/smartbuy catalogue content exchange going both ways, and the Cyberlynx/Qvalent

content exchange going both ways, demonstrates that interoperability between catalogues is not

only feasible but can occur across different standards.

Understandably, some of these pilots were easier to complete and required less manual intervention

than others. What they all demonstrated, however, is that catalogues can successfully interoperate,

saving suppliers time and money in catalogue management, while at the same time enabling their

catalogues to be exposed to more buyers in a wider range of markets. The trials also demonstrated that

following or adhering to certain standards and formats facilitated the sharing of data across systems.

EXTRACTS

FROMREAL

CAS

ESTUDIES


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Steps and Checklists

Lets assume that as a supplier you would like to develop an electronic, interoperable product

catalogue and make it available online to buyers. In achieving this, some common questions that

you will need to ask and answer include:

How should I go about doing this?

What will be the cost of development and maintenance?

What products should I include?

How should I display these products?

How do I get to new buyers with the least investment?

How confident can I be that I will attract customers through this channel?

Will the development of an electronic, interoperable catalogue be worth it?

What external sites can I use to display my content?

What catalogue standard should I choose?

The methodology described below provides ways to answer these questions. The methodology

follows the following steps:

Step 1 Developing the business case

Step 2 Scoping the buying environment

Step 3 Mapping your business processes

Step 4 - Developing your catalogue

Step 5 Making your catalogue available

Step 6 Getting assistance

M A K I N G Y O U R E L E C T R O N I C C A T A L O G U E


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S T E P 1 D E V E L O P I N G T H E B U S I N E S S C A S E

When embarking on any new commercial endeavour, you should undertake a market survey. In so doing:

ask your major customers if they are intending to implement or have already deployed an

internal e-procurement system;

canvass your smaller customers and find out if they would be interested in creating and

managing a catalogue of your products for distribution via a supplier hub or over the Internet;

check out the tender proposals requested by buying organisations;

ask the question would I have a better chance of new business if my catalogue was e enabled?

You may be under pressure from a key existing customer to set up an electronic catalogue.

When setting up your electronic catalogue, focus on the existing market and also look for

interoperability options. The principle is that if you can set an electronic catalogue up for oneenvironment, it should be easily ported to another as long as you have touched the necessary bases.

In order to determine whether there is an economic benefit of developing an electronic catalogue,

you should always undertake a business case first.

Template for the Measurement of eCatalogue Costs and Benefits

Context

In this section you will need to develop a best practice approach that will help you reduce the costand complexity of establishing and managing a dynamic electronic catalogue.

In particular, you will need to demonstrate that you can cost-effectively create and maintain a

single master catalogue and publish it across different buying systems.

Purpose of this Exercise

The purpose of this exercise is to identify and measure the costs and benefits associated with use

of electronic catalogues. The objective is to identify and measure the cost that you will incur when

dealing with your customers prior to the use of such a catalogue. These costs will then need to

be compared with those costs incurred after the implementation of the catalogue. The benefits ofusing an electronic catalogue in terms of cost saving and other factors can then be measured.


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Items to Measure

As far as the cost and benefits associated with use of the electronic catalogues are concerned, the

following items need to be measured:

1. the cost of developing and maintaining your catalogue(s) or other mechanism(s) to advise

customers of product information. This should include:

the time, effort and other costs involved in developing and maintaining your existing

catalogue(s) or product information mechanism(s); and

2. the time and effort and other costs involved in developing and maintaining an electronic

catalogue(s). The methods of advising customers include:

the cost of distributing your existing catalogue or operating an alternative product

information mechanism (eg verbal advice by sales person); and

the cost of publishing an electronic catalogue that customers access.

3. The costs of processing orders before and after the use of your electronic catalogue needs to be

considered including the number of errors (eg incorrect item description or price).

4. Marketing costs associated with dealing with a new customer, including time and effort of

informing buyers of the items available also requires consideration.

Collection of Data

To evaluate and measure the impact of introducing an electronic catalogue, you will need to collect

information both before and after its introduction. Where possible this should include quantitativemeasurements that can be expressed in dollar terms (e.g. staff time, printing, postage costs) as well

as qualitative measurements including customer satisfaction.

M

AKINGYOUR

ELECTRONIC

C

ATALOGUE


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To assist you, we have developed the following template which was designed to capture the data

necessary to undertake this type of analysis:

Data Collection Template

Company Name

Current Operations

Primary

State of

Operation

Secondary State

of Operation

Number of Customers in that State (1) Number of Customers in that State (1)

Number of buyers in the Customers (2) Number of buyers in the Customers (2)

No of orders received per annum No of orders received per annum

No of Items sold to Customer No of Items sold to Customer

Are items maintained a catalogue Yes No

If No, what alternative form does product or service offering to the customer take? For example; narrative on

web site or brochure, or non-document verbal advice by Sales Person. Describe form of advising customer:

What is cost of maintaining alternative form of advising the customer of the product or service offering?

$

Staff time

Printing

Postage and Distribution

Other

Total

Is the catalogue electronic Yes No

If no, describe the form of the catalogue


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What is cost of maintaining the non-electronic catalogue?

$

Staff time

Printing

Postage and Distribution

Other

Total

What is cost of existing electronic catalogues?

$

Staff time

Hosting

Other

Total

Process of Orders Under Current Arrangements

Time Cost $

Time spend processing customer orders

Processing Errors No. Cost $Incorrect Price

Incorrect Item Description

Other

Total

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Customer Rating of Current Arrangements

Very

Poor Poor Adequate Good

Very

Good

Identification of Products and Services

Advice of changes to product or service

descriptions or prices

Interface of catalogue, if any, to Buyers

procurement system

Customer Rating of Current Arrangements

Very

PoorPoor Adequate Good

Very

Good





procurement system

Revised Arrangements

What is cost of maintaining new electronic catalogue?

$

Staff time

Hosting

Other

Total


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What is cost of interfacing electronic catalogue with other catalogues? $

Staff time

Translation

Other

Total

Customer Rating of Revised Arrangements

Very Poor Poor Adequate GoodVery

Good





procurement system

S T E P 2 S C O P I N G T H E B U Y I N G E N V I R O N M E N T

Despite the hype, moving into online catalogues and sales is not the panacea for opening new

markets and reaching new customers. You need to start this process by thinking of your existing

customer base, and considering how they might move from manual to virtual. In doing this, you

should consider the following questions:

How would you need to modify your current business processes to cater for this (eg logistics

and fulfilment)?

How would you want to relate to your suppliers online?In scoping your business environment, you should also look at the following areas:

Sales channels:

buyer access to the online catalogue information; and

how your buyers will purchase from you.

Logistics and fulfilment questions should relate to:

warehousing;

shipping; and

invoicing.

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These are the same areas you should have already considered in terms of your existing business.

However, there are differences when you move into the online environment as one of the areas you

will need to consider are the standards your buyers use in the online world.

Standards

Standards are important in determining how to put your catalogue online for your buyers. Without

such standards, everyone would adopt their own way of doing things making it almost impossible

to work easily with trading partners. Standards are important for transformation and portability of

content from one system to another and for scalability, flexibility and re-use.

However, as demonstrated in the section on The Business Problem, differing standards can cause

pain for suppliers. So where does this leave you, the supplier? With multiple standards, multiple

buyers asking suppliers to provide data conforming to their standard, and with multiple flavours

of standards (cxml, xml, ebxml for example) it is understandable that many suppliers continue touse paper-based catalogues.

It is difficult to justify the cost of reworking the same catalogue data again and again to service

different customers and requests when, more often than not, there is no definable benefit in doing so.

Nevertheless, it may limit your ability to open up new channels or to better serve existing sales channels.

It is a question of if and then. As a supplier, you may ask: if I were able to provide my catalogue

data once and have it accessible to customers through a range of channels would it then result in

additional sales?

Global Product Standards

Using nationally and internationally recognised standards in constructing your electronic catalogue

will provide your catalogue with more portability and re-useability. For example, you can use the

ABN to identify a trading partner or EAN-UCC for identifying a product.

There are a number of common standards used for electronic catalogues. In particular, you will need

to determine which standard your buyers and suppliers use and how best to approach catalogue

interoperability with them. The most common standards are:

UNSPSC

The Universal Standard Products and Services Classification (UNSPSC) system is an open global

coding system that classifies products and services. The UNSPSC system is used extensively around

the world in electronic catalogues, search engines, procurement application systems and accounting

systems.

eCl@ss

Although still evolving, eCl@ss is a product classification system that intends to be used as an

industry standard between suppliers and their customers. eCl@ss features a hierarchical, four level

classification key with a keyword index containing 14,000 items.


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EAN/UCC

EAN is well known for setting the standard for bar coding. The primary objective of this system is to

make possible the identification of all trade items, processes, services, shipments, assets, companiesand locations to facilitate communication, data collection and exchange of information in the

interest of trading partners.

EPC

Electronic Product Code (EPC) is the new standard for product numbering for RFID (Radio Frequency

Identification). EPC numbers are embedded into the RFID tags and will become the unique

identifiers for all products carrying RFID product labels. EPC standards are administered by EPC

Global, a division of EAN International and the Uniformed Code Council.

(RUS) Requisite Unifying Structure

A global product classification system comprimised of catagories and attributes that describe

products and services. RUS is a flat, non-hierarchial for organising content and enabling finding and

ease of content maintenance.

RUS supports over 14,000 catagories, 1,500 attributes, is available in 16 languages and maps to all

major classification standards.

More information on these product standards is included in the appendices.

Standards Organisations

Similar to the standards themselves, there are also multiple standards organisations which are

often industry focused and independent of any one manufacturer, supplier or buyer. Perhaps the

most widely know standards organisations are the:

United Nations Centre for the Facilitation of Procedures & Practices for Administration,

Commerce & Transport (UN/CEFACT) which champions both UN/EDIFACT and ebXML;

The Electronic Commerce Code Management Association (ECCMA) which champions the NATO

Codification Service (NCS);

the Electronic Open Technical Dictionary (eOTD);

the United Nations Development Programme (which owns all the rights to the UN/SPSC and

which is managed by the Uniform Code Council (UCC)); and

EAN International and the Uniform Code Council that champions the EAN (barcode) system

(the UCC also manages RosettaNet and the EPCglobal us standards for RFID) EAN Australia and

RossettaNet became affiliated in 2004 and formed RossettaNet Australia.

EPC Global administer the EPC numbering standards for use in RFID (Radio Frequency Identification)

tags. EPG Global is a division of EAN International and the Uniform Code Council (UCC). EAN

International and the Uniform Code Council have recently merged into a single standards organisation

to be called GS1 (Global Standards 1).

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S T E P 3 M A P P I N G Y O U R B U S I N E S S P R O C E S S E S

In developing an electronic catalogue, a key principle to consider is the integration of your

catalogues data with existing business processes as much as possible. This will help you to reduceduplication and reinventing the wheel scenarios.

A business process can include:

marketing;

channel selection;

product listing and pricing;

sales;

fulfilment;

post-sales activity;

invoicing and financial management; and

managing partner organisations.

Each of these activities involves a business process (a series of linked steps also called workflow).

Most businesses know these processes intuitively, and many have rarely thought about them or

documented them.

When moving from a shopfront or paper-based work environment to an online work environment,

you need to think about your business processes and how they would operate in an online world. At

this stage, there is an opportunity to change your business processes by removing those steps that

do not add any value. If you dont have a business process in place, you will need to draw a flow

diagram of how catalogue management works in your business now.

It is wise to remember that a catalogue is not a stand-alone feature but that it should be totally

integrated into the way you do business. In particular, it should be linked to the way you deal with

your suppliers, inventory management, sales management, customer relationship management and

related activities.

Businesses that sell goods or services will normally have existing ways of listing products and prices.

As far as possible, this should be the same for both manual and online catalogue management,and based on existing practice. (There are differences of course, for example, placing a photo of the

product online rather than on display in a store.)


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S T E P 4 D E V E L O P I N G Y O U R C A T A L O G U E

Catalogue Development Steps

There are three steps in catalogue development:

1. Content creation and enablement creating the catalogue and making it able to be put online in

a way that is capable of browse, search and ad hoc purchase, or automated purchase.

2. Publishing making the catalogue available online via the models identified on pages 34-35.

3. Maintaining keeping the catalogue up to date, including data synchronisation.

The process of creating, enabling, publishing and maintaining a catalogue can be quite a complex

task and there are a number of critical decisions that you will need to make regarding:

catalogue structure; product classification standards (eg UNSPSC, EAN etc);

pricing;

product attributes;

product identification codes;

product display (including images);

customer specific catalogues;

contract related catalogues;

buyer access; and

security.

Catalogues may also need to address issues such as trading partner identification, trading partner

registration, data quality and cleansing, item master file management, messaging standards, GST

management, and related issues.

Trading partner identification is particularly important because the way you identify your partner in

your financial system may be different from the way your trading partner identifies themselves in

an online environment. For instance, you may need to map your vendor master file to your trading

partner identifiers (eg. their SKUs) to gain access to catalogue content.

Addressing these issues can be done in conjunction with an existing catalogue service provider. (See

Step 6 Getting Assistance)

As a supplier, you should already have a catalogue. Most likely if this is in electronic form, it will be

tabular such as a spreadsheet or a database table. Such tables are readily exportable and could become

the basis of an electronic catalogue. They will however, probably not contain all of the information that

an electronic catalogue will require such as supplier identification codes that your buyers give you. The

advantage, however is that such codes and information can be added when an electronic catalogue is

produced. Two types of information will need to be added to your existing catalogue including:

product categorisation; and

external links.

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Product Categorisation

If you browse the aisles of your local hardware store you will find all of the tools in one area, the

fasteners in another, etc. This has been done so that it makes it easy for buyers to find what they

need by browsing. An electronic catalogue should be no different with products coded so that

the buying system can automatically sort them into common areas, to make it less difficult for

cybernetic buyers to browse. Any coding system, however, needs to have a degree of universality in

order to be able to be created by a multitude of suppliers and read by disparate systems.

You will need to add codes to every item in your catalogue. The trick is that if your catalogue items

already follow a classification pattern; match this to the classification pattern of your chosen

coding system, and the job is done.

Semantics and Quality of Content Standards

In the field of e-Procurement catalogue management, catalogues are often graded based on some

or all of the following quality attributes:

Normalisation - This involves ensuring the consistency of data. Do units of measure map to

ANSI or EDIFACT standards? Do country codes map to existing ISO standards? Normalising

also involves the expansion of any abbreviations and converting descriptions with all caps

descriptions into mixed case.

Rationalisation - This process involves reordering item descriptions so that the most descriptive

noun appears first followed by modifiers. For example the description Blue Ballpoint Pen would

become Pen, Ballpoint, Blue.

Enrichment - This is the process of adding images, additional long descriptions, technical

specifications, Material Safety Data Sheets, etc to the base catalogue data.

Categorisation (or Classification) - This is the process of attaching an item to a taxonomy

structure like UN/SPSC. The common issues here are not that an item has been assigned to a

valid category, but rather has the item been assigned to the right category. For example, consider

the item Screw, Pan Head being assigned to the category kitchen utensils instead of hardware.

Customising Your Coding

Basic universal coding may not meet all of your requirements or those of your customers. For instance

in the UNSPSC commodity group 14-11-18 business use papers there are only a few business functions

that relate to forms (08 accounting, 09 bill of lading, 10 personnel, 11 sales, and some

others) with most forms for business functions needing to be classified as 06 business forms. If you

are assembling a catalogue for a business with a high administrative focus, it will be essential to further

sub-categorise. This involves adding additional digits to allow for the subcategories. When you do this, it

has to be with the agreement of your customers and possibly in accordance with the specifications of a

major customer. The result can reduce the portability of your catalogue.


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External Links

External links relate to images and data sheets. Every image provided as part of, or in conjunction

with a catalogue, must be referenced in that catalogue. These links can be generic as a simple script

and can translate them into the format required by your individual customers or hubs.

Product Images

Images can be used in a display that includes a shop-front to attract buyers to a particular product

or product groups. They can also be displayed in a list to aid a buyers decision, or on a confirmation/

data sheet page where the buyer is able to confirm exactly this is the product they want.

Thus, with images there are horses for courses. Generic, and in some cases banner images, will be

required to head product categories. A generic image will include a range of items or even a stylised

flagship product. However, for individual product identification, a single image of the item with a size

scale is desirable. Using the example of sticky tape, a group photo showing various sizes and types

of tape would be useful to attract buyers to adhesive tape or adhesives as a stationery category.

However a buyer of tape is interested in whether or not it will fit their dispenser. Stationers describe

tape in terms of its function and its width by length of the tape on the roll eg. 18 x 33 means 18 mm

in width, 33 metres in length with no mention of a dispenser spindle diameter made.

Thus an image of the product itself can be essential for buyers to confirm what they are ordering.

Images may also need to meet the size and compression requirements of the particular buying

system that will display them.

Moving images are not recommended. They attract interest but also distract buyers from other key

information, and perhaps another static image with the actual product of interest. Moving images

can also cause bandwidth issues.

Images also need to be low impact i.e. small in file size. For web-based delivery all images should be

of .jpg or .gif format. Using medium definition (520 x 390 pixels, approx 40 kb) enables your images

to be used as a presentation graphic if required, or compressed for a thumbnail display.

Data sheet displays are a very effective way to tie images and other product information into the

confirmation aspect of product selection. This involves the catalogue linking to an external (intranet

or internet) website. There you can provide full product details if required (note that in the case

where a customers intranet (internal internet) is to be used for data sheets, electronic data sheet

details will need to be provided to the customer).

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S T E P 5 M A K I N G Y O U R C A T A L O G U E A V A I L A B L E T O B U Y E R S

Once you have developed an electronic catalogue, there are a number of ways you need to consider

that allows your buyers to access this information, depending on their particular e-procurementinfrastructure.

The cost of making your catalogue available to as many buyers as possible across a range of sales

channels should not negatively impact your potential revenue provided that the data is correctly set

up in the first place. It is this last point that catalogue interoperability seeks to address.

Catalogue interoperability facilitates the accessibility of information to a greater number of buyers

by conforming to specific published and understood standards. A suppliers catalogue data, for

instance, can be aggregated to as many markets or through different channels as the supplier

believes will generate revenue. With minimal costs to add an additional product attribute, be it a

specific code or class (EAN or UN/SPSC code for example), will enable the goods and services to beaccessed by a far wider range of buyers than would otherwise be possible.

You will need to decide which way(s) will best meet your customers needs whilst maintaining your

costs and the integrity of your catalogue content. If your catalogue is interoperable, it will reduce the

overall cost of maintaining your content for multiple customers. Where you ultimately decide to have

your catalogue hosted will probably depend on what your larger customers would like you to do.

The primary models for allowing buyer access to your catalogue include:

Supply Chain / Inventory Integration

In case of supply chain/inventory integration, the buyer will want to link their purchasing system

directly with your system including linking directly with your catalogue for manual or automated

access. In some instances the buyer may even want to interrogate your inventory system.

This model usually applies to the level of ineroperability offered and e-enabled large customers

with the exchange of item master data with trading partners the key component of this model.

Management of trading partner identification data is important and in this instance, bar coding

data can be included. A good example for this model is EANnet (www.ean.com.au).

Buyer Hosted Content

Buyers may want to take your catalogue content and host it in their own catalogue for internal use.

This model is common where the buyers have an e-procurement module in their finance system,

linked to their own stock or inventory management arrangements. Whilst interoperability makes this

model more feasible, to save potential errors further down the supply chain, if you plan to adopt

this model, you will need to be careful about the accuracy and currency of the catalogue content

you provide to your customers. A good example of this is the Cyberlynx Supplier Hub.


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Supplier Hosted Content

You can host your own catalogue, either on your own web site or via a catalogue hosting service

provider. There are a number of providers who will develop, host and maintain catalogues for you

(eg Westpac Qvalent, Cyberlynx Supplier Hub).

In this instance, the buyer would need to go to your site to access your catalogue content. You can

then provide access via automated connections within the buyers e-procurement system.

Through such a system, buyers will be in the position to access your catalogue via the Internet

for ad hoc purchasing. Such access can often be implemented via connections in the buyers e-

procurement system enabling the buyer to log onto your catalogue, browse and search, select and

put data into a shopping cart, pull down the shopping cart and attach it to a purchase order in their

financial system. This is punch-out.

Making your catalogue compliant with major national and international standards developed

by industry and/or vendor consortia will assist this process should you wish to use this model.

Examples include OCI and OBI, although there are no mandated standards. Supplier Hubs will

automatically convert your content between different standards to meet the buyers requirements.

Electronic Marketplace Hosted Content

A number of marketplaces will take your catalogue content and publish this for buyers.

Examples of these are vertical marketplaces that relate to a particular industry, or horizontal

marketplaces with a wide range of suppliers, such as government marketplaces

(eg West Australias GEM and New South Wales smartbuy).

There are also public commercial marketplaces available for suppliers

(eg Yahoo Store - http://au.store.yahoo.com/), although the commercial arrangements for these

marketplaces can vary significantly.

Supplier Hub Hosted Content

A number of catalogue vendors provide the catalogue classification structure and services that

receive content from multiple suppliers, provide the catalogue classification structure and translate

the content to multiple formats for distribution to other catalogues with little effort on the

Suppliers part.

An example of this is the Cyberlynx Supplier Hub.M

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S T E P 6 G E T T I N G A S S I S T A N C E

As a supplier, you may find this whole process daunting. Help is at hand. There are a number

of service providers who can assist you to work through these processes. Some of the servicesprovided include:

business process reform;

business case development;

catalogue development;

data cleansing and classification;

catalogue e-enablement;

catalogue hosting;

catalogue interoperability;

e-procurement advice;

integration with existing systems;

supply chain management; and

technology advice.

Examples of these service providers include:

EAN ( www.ean.com.au );

Sensis ( www.sensis.com.au );

Cyberlynx Supplier Hub ( www.supplierhub.com.au );

Qvalent ( www.qvalent.com.au );

GXS ( www.gxs.com );

Singtel/Optus ( www.optusmarketsite.com.au );

Congex ( www.congex.com );

Marketboomer ( www.marketboomer.com );

Acumen Alliance ( www.acumen.com.au );

Australian Retailers Association ( www.ara.com.au ); and

LogicaCMG ( www.logicaCMG.com ).

This list is not complete. In turn, the service providers listed above are recommendations only and

do not comprise a definite inventory.


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A P P E N D I X I

C A S E S T U D I E S

C O N T E N T S

NSW DEPARTMENT OF COMMERCE CATALOGUE INTEROPERABILITY

CASE STUDY 40

Background 40

Revised arrangements 40

Establishing and maintaining the catalogue 41

Punch-out trials 41

Catalogue interchange trials 42

Immediate benefits 42

Punch-out 42

Catalogue interchange 42

Next steps 43

Punch-out 43

Catalogue interchange 43

CITISOFT SOFTWARE-2-U CASE STUDY 44

Background 44




Next steps 45

CASE STUDY FOR CYBERLYNX INTEROPERABILITY WITH THE

WESTPAC QVALENT AND NSW DEPARTMENT OF COMMERCE

SMARTBUY CATALOGUES 46

Cyberlynxs interoperability with smartbuy 46


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Background 46

Establishing the catalogue 46

Benefits 47

Conclusions and next steps 47

smartbuyTM interoperability with Cyberlynx

(see also the Department of Commerce case study) 47

Background 47


Summary and conclusions 48

Cyberlynx Supplier Hub & Westpac Qvalent: Supplier Hub to Westpac 48


Comments and summary 48

Cyberlynx supplier hub & Westpac Qvalent: Westpac to Supplier Hub 49


Summary and conclusions 49

CASE STUDY FOR COMMONWEALTH BANK PROMOTIONAL ITEMS 50

Background 50


Benefits 51

CASE STUDY FOR NOVEL INNOVATIONS 52

Background 52




Next steps 54

CASE STUDY FOR DEPARTMENT FOR ADMINISTRATIVE

AND INFORMATION SERVICES (DAIS) SOUTH AUSTRALIAN

GOVERNMENT 56

Background 56

System objectives 56

How E-Purchase SA Works 56

Requisitions: 56

Purchase orders 57

Receiving goods 57

Invoices 57


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Advantages of E-Purchase SA 57

DAIS perspective on the suppliers chosen 58

Supplier enablement 58

Immediate benefits to DAIS 59

Summary 60

CASE STUDY FOR AISH DATA & DESIGN (AISH) 61

Background 61




Next steps 63

CASE STUDY FOR COMMANDER AUSTRALIA LTD 64

Background on dealings with DAIS (SA Dept. of Admin. & Information Systems) 64




Next steps 65

CASE STUDY FOR IMAGE-ON PTY LTD 66

Background 66




Next steps 66

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N S W D E P A R T M E N T O F C O M M E R C E C A T A L O G U E

I N T E R O P E R A B I L I T Y C A S E S T U D Y

Background

smartbuyTM is NSW Governments secure online government-to-business e-procurement platform,

allowing NSW Government departments and other eligible organisations to browse, select and

purchase goods and services online from approved government suppliers.

A key objective of smartbuyTM is to promote the economic development of NSW by:

Facilitating growth in the efficient and effective use of electronic commerce.

Providing open and equitable access to Govt procurement markets.

A key component of the smartbuyTM

e-marketplace is the smartbuyTM

catalogue. The smartbuyTM

catalogue is one of the most comprehensive government e-marketplace catalogues in Australia,

incorporating approximately 85,000 line items and 2,500 suppliers and associated resellers across

New South Wales.

An extensive and authoritative electronic catalogue is a foundation stone for any viable electronic

procurement system.

Preparing and maintaining an electronic catalogue has an attendant cost for a supplier. While

there are benefits that can offset those costs, the net benefit depends on the volume of business

generated compared to the cost of establishing and maintaining an electronic catalogue. Catalogue

management costs can quickly exceed the benefit if suppliers are required to prepare and maintaintheir content in multiple systems.

It is thus important to ensure that the content prepared by a supplier for one catalogue can

be made available in a controlled manner for use in other catalogues without need for manual

manipulation. This can be described as catalogue interoperability.

Catalogue interoperability saves suppliers money by eliminating duplicated effort and lowers risk by

reducing the cost and errors associated with the manual data modifications.

Interoperability between catalogues can be achieved in a number of ways including:

Allowing a user in one system to connect to and browse a catalogue hosted by another system

(this is generally referred to as punch-out).

Making the data in one catalogue available for electronic upload into another (this is described in

this document as catalogue data interchange).

To demonstrate the viability of the above approaches a number of trials have conducted by the

Department of Commerce and various partner organisations. These trials are described in detail in

the remainder of this document.

Revised arrangements

The ability to allow a user to punch-out to an externally hosted catalogue was implemented in

smartbuy during the earliest stages of system development. The functionality is based on OCI


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(Open Catalogue Interface) standard defined by SAP.

Setting up a link from smartbuy to an externally hosted OCI compliant catalogue is

straightforward. Details defining access to the externally hosted target system need to be enteredinto smartbuy through a system administration screen.

These details include the:

smartbuyTM buying organisation requiring access to the external catalogue.

External catalogue URL.

smartbuyTM return URL.

Logon and password to the external catalogue.

When these details have been entered, a catalogue link referencing the externally hosted catalogue

is created in smartbuy. When users select this link they are transferred to the externally hosted

catalogue where they can continue to search and browse for products. Items can be selected from

the externally hosted catalogue and stored in a list generally referred to as a shopping cart.

For the purposes of the punch-out trial, demonstration catalogue punch-out links were created and

made available in smartbuy. A user would then be able to log into smartbuyTM, click on the link

to access the external site, browse and select items, and then return the external shopping cart to

smartbuyTM as a requisition.

When the user completes their selections from the external catalogue, a shopping cart containing

details of the selected items is returned to the original system as a standard OCI message. The

process of creating a requisition and ultimately a purchase order then continues in their local

system as if the items had been selected from the local catalogue.

For the catalogue interchange trial, catalogue data was exported in a pre-defined format from

both host systems - Cyberlynxs Requisite catalogue and the smartbuyTM catalogue. The exported

catalogue items were then exchanged via email and uploaded into the destination catalogue. Users

were then able to select the uploaded items onto requisitions from the destination system.

Establishing and maintaining the catalogue

Punch-out trials

The Qvalent catalogue operated by the South Australian Government is an OCI catalogue. In May of

2003 a demonstration catalogue punch-out link was created and made available in smartbuy.

Once all the OCI parameters had been correctly entered, a user logged on to smartbuy and

selected the demonstration punch-out catalogue link. The user was then connected via OCI punch-

out to the Qvalent catalogue and was thus able to browse and search that catalogue and select

items for inclusion in a shopping cart.

At the end of the session the shopping cart was returned to smartbuyTM and the punch-out OCI

message was used to automatically create a smartbuy requisition.

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Catalogue interchange trials

In October 2003 the feasibility of electronic data interchange was tested in a trial conducted

between smartbuy and Cyberlynxs Requisite catalogue. The trial validated interchange in bothdirections, with data being extracted from smartbuy and then loaded into Requisite, and data

being extracted from Requisite and loaded into smartbuy.

To affect the trial both parties met to discuss protocols for the exchange of data. It was agreed

that data would be presented as ASCII text files, formatted as comma separated values (CSV) and

exchanged using email over the Internet.

At the meeting the data fields of both systems were also discussed. Although the two systems

supported different data structures, the essential data elements to support product identification,

selection and electronic procurement were present in both. A simple field mapping exercise was

conducted and agreement reached on the fields to be included and field order to be used in theexported data files.

Files for interchange were exported from each system, in the agreed format, by running standard

SQL inquiries against each catalogue database. The resultant files were exchanged over the Internet

via email and loaded into the destination system using standard SQL import statements. The process

was successfully completed at both systems without any need to re-key catalogue data.

Immediate benefits

Punch-out

The trials confirmed the viability of OCI punch-out as a catalogue interoperability mechanism.

Provided that the two systems being connected have been built to support OCI messaging, the

process of configuring a link, punching-out and returning a shopping cart proved to be a simple

and reliable mechanism for achieving catalogue interoperability. Since the original trial, smartbuy

users access externally hosted catalogues using OCI punch-out as a routine production activity.

In this instance OCI parameters defining connection to the smartbuy catalogue were provided

and entered into Qvalent. An end-user was then able to select, browse and search the smartbuy

catalogue, create a shopping cart, return the shopping cart to Qvalent and create a requisition and

purchase order locally.

Because both the Qvalent and smartbuy catalogues support OCI messaging, the process was

simple, effective and efficient.

Catalogue interchange

Once the catalogues were loaded into the destination systems, it was possible to browse and search

the additional items, select them for inclusion in a requisition and to create a purchase order.

Overall, the process of exchanging catalogues was simple and efficient although some points are

worth noting:

As the exchange was limited to a trial of the feasibility of electronic interchange, certain

compromises were accepted in the range and mapping of data. In a production application,


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planning the mapping between two systems would be a more time consuming and expensive

activity. The use of common standards such as UNSPSC for item classification and the reduction

of data to (atomic) elements are essential to make data mapping a manageable problem.

The use of email was a pragmatic solution to the interchange of data for the purposes of this

trial. In a production application, security, bandwidth and reliability issues may dictate the need

to consider other transport mechanisms.

Next steps

Punch-out

Although the punch-out arrangement has proven to be a simple, effective and efficient mechanism

for expanding the range of goods and services available for purchase, such arrangements do put a

number of issues out of the direct control of the host system.

When considering connection to an externally hosted catalogue the following criteria need to be

carefully assessed:

Does the operator of the externally hosted catalogue guarantee acceptable service levels

including system availability and an effective help desk for problem resolution?

Will variations in the user interface become a training problem for end users?

Is the necessary functionality to control the range of goods and prices offered to local end users

available via the externally hosted catalogue?

Do data standards for item classification such as, item identification and units of measure, meet

the requirements of the local e-procurement system?

Catalogue interchange

Despite some minor presentation issues, the trial demonstrated that electronic data interchange

is a viable mechanism for affecting catalogue interoperability. The minor problems concerning

presentation in the destination systems could be resolved for production application as required,

through additional data mapping.

The trial did however underscore the importance of data standards and the reduction of data to its

most atomic form as essential elements to effective electronic data interchange.

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4 4 |

C I T I S O F T S O F T W A R E - 2 - U C A S E S T U D Y

Background

The Department for Administrative and Information Services (DAIS), in South Australia purchases

a wide range of computer software from Citisoft Software 2 U. The computer software purchased

ranges from operating system software and tools to end-user based products required by its

business units. The software purchased from Citisoft is outside of the software covered under the

SA Governments Microsoft Select Agreement (i.e. arrangements that cover the purchase of all

Microsoft licensed/owned products).

Prior to the creation of the electronic catalogue, DAIS buyers would either phone or send an

email to Citisoft requesting the availability and price for specific pieces of software. Citisoft would

determine the price and availability of the software and then send this information to DAIS by email

or by making a phone call. DAIS would then use the E-Purchase SA system and manually enter theproduct information and send a purchase order by facsimile to Citisoft. Citisoft would then source

the software and deliver it to DAIS and then send a paper invoice to DAIS for payment.

Revised arrangements

Under the new method DAIS logs on to E-Purchase SA and accesses the Citisoft catalogue on the

marketplace to find the piece of software that they are looking for. If the piece of software that DAIS

wants to purchase is not listed on the catalogue they will then send an email or telephone as previously

done. This can happen as DAIS may wish to purchase a piece of software that Citisoft has never

sourced, but because of Citisofts wide range of software contacts can still be sourced on DAISs behalf.

Once DAIS has found the software they need on the catalogue or by manually typing the product

information onto the purchase order, the order is sent electronically to the order processing section of

the marketplace and Citisoft receives an email alert that a new order has arrived. A staff member then

accesses the marketplace and views the order. This order detail is then entered into Citisofts internal

Sybiz accounting system and the software is sourced (if not already in stock) and delivered to DAIS.

Delivery of the item triggers the creation of the invoice for DAIS. This invoice is printed out and

Citisoft then accesses the marketplace to send an electronic invoice. To do this, the order associated

with the invoice is found, the invoice template is selected, the specific invoice details entered and

an electronic invoice is sent back to the E-Purchase SA system.

Establishing and maintaining the catalogue

Citisofts existing accounting system, Sybiz is the source of all product and pricing information for

the software that Citisoft sells. Citisoft and a local IT consultant, Mr Ken Sellick, worked with Sensis

to understand the product information and data loading formats required by the marketplace. Mr

Sellick then used an ODBC connector to extract the required product information from Sybiz into a

spreadsheet format specified by the marketplace, allowing this product information to be imported

directly into the marketplace. This allows for quick and easy updating of the product information on

the marketplace whenever Citisoft requires. Citisoft envisage that this would probably happen on a

monthly basis.


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Immediate benefits

The following intangible benefits from the revised system have been identified and quoted by

Citisoft:

DAIS buyers can look at the catalogue and see if the item that they want to purchase is already

listed or not. If not, they will then call or email as discussed above, but this is now the minority

of transactions.

DAIS send the order to the marketplace where it can be viewed on-line instead of receiving the

order by facsimile.

When the order arrives they can be easily entered into Citisoft systems because the product

codes are known and are correct as they originated from the catalogue information.

The catalogue update process has been enabled to allow us to quickly and easily download the

product information from internal systems into the correct format to update the list of products

and prices.

Citisoft can use the on-line invoice capability to return an electronic invoice to DAISs E-Purchase

SA system. If prices have not altered and the requested goods have been delivered, the order will

be passed automatically into the buyers financial systems for payment. (Electronic invoices do

not get lost in a buyers or accounts payable staff members in-tray).

The following tangible benefits have been achieved and quoted from Citisoft:

The catalogue has reduced the number of telephone calls between DAIS and Citisoft as the

majority of items requested can be immediately found on the electronic catalogue. Sometelephone calls are still required as not all the software DAIS requires is immediately available

on our catalogue. One of the small problems that we have encountered is with the accuracy

of software pricing which is due to the nature of the software business. Prices and versions of

software change frequently and often the current pricing for specific software is not known until

the order is placed.

The ability to receive purchase orders electronically has some benefits as it reduces the volume

of orders received by facsimile which would lead to cost savings in facsimile consumables and

paper. This would be only a tiny benefit to Citisoft at this stage but if more customers could

transact in this way the savings would grow.

Next steps

At this stage there are minimal further steps that Citisoft would consider taking. DAIS is currently

the only SA Government buyer using the E-Purchase SA system. If this was to grow and other

clients started to use similar systems, Citisoft would consider undertaking some further activities.

For example, Citisoft is already extracting product information from Sybiz to load into the

marketplace catalogue. The next stage would be to look at further enhancing Sybiz to enable orders

to be automatically entered and for the system to gener

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