This action might not be possible to undo. Are you sure you want to continue?
New Directions for Procurement and Sourcing Organizations
Bill Tokheim Director, Procurement Strategy
The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for Oracle’s products remains at the sole discretion of Oracle.
• • • • • •
Managing in Downturn Oracle Procurement Solution Spend Analytics Supplier Management Procurement On Demand Q&A
<Insert Picture Here>
Measured Response in the Current Environment
Targeted technology investments can deliver up to ten times the impact of traditional IT cost reduction efforts
Responding to Fluctuating Market Immediate priorities for CPO Risk and Compliance 1 2 3 Supplier Risk Renegotiate Contracts Spend Management Effectiveness Conserve Cash CPOs being asked to do more with less 1 2 3 Cut Spending Hiring Freeze Reconsider Cap Ex .
2 0 Typical Purchasing World class Purchasing • Shift Investment in Procurement to Higher-Value Activities • Better use of Information • Reduce Staff by Swapping Labor for Technology Source: Hackett Group & Oracle .000 7.6 1.000 8.000 4.2 1 0.000 2.Goal: Achieve “World Class” Procurement Drive 60% Higher Savings from Procurement # Suppliers – down 55% Per $ Billion Spend 9.4 0.4 1.8 0.6 0.000 1.000 6.000 5.000 3.000 0 # FTE – down 48% Per $ Billion Spend 120 100 80 60 40 20 0 Typical Purchasing World class Purchasing Cost of Procurement As % of Total Spend 1% 1% 1% 1% 1% 1% 1% 0% 0% 0% 0% 0% 30% savings Typical Purchasing World class Purchasing Typical Purchasing World class Purchasing Technology Investment $M Per $ Billion Spend 1.
Implications for Technology Strategy Focus on Opportunities to Achieve Rapid Return Today Invest in Ways to Standardize and Simplify with a Global Business Platform .
ORACLE PROCUREMENT SOLUTION .
Open.Oracle Advanced Procurement Suite Complete. Flexible. and Integrated Complete Open Flexible Integrated .
Settle Spend Classification Procurement iSupplier iExpenses Spend Analytics iProcurement Sourcing Contracts Management Inventory Supplier Mgmt Landed Cost Settlement Expense Mgmt Invoices Payments Audit New Solution . Service.Indirect.Pay Expense . and Direct Procurement Differing Needs and Disparate Solutions Service Indirect Catalog Management Source to Procure Bids and Auction Supplier on Boarding Time and Labor Payments Direct Plan to Procure Capacity Constraints & Sourcing Splits Extended Enterprise – On Time Delivery Strategic Spend Procure .
Where We Have Been (Release 12) Enable Command & Control for the Procurement Professional Professional Buyer’s Work Center • Exceptions • Agreements • Performance Analysis Negotiations Contracts & Agreements Requisitions PO Execution Supplier Management Invoicing & Payment • View exceptions across multiple applications and operating units • Create. implement. and execute agreements • Analyze performance of procurement & suppliers Single Access Point for All Responsibilities .
Professional Buyer’s Work Center Enable Command & Control for the Procurement Professional • Intuitive UI and streamlined workflows • Status at-a-glance • Multi-Org Access Control for shared services • Extensive options for personalization .
Procurement for Complex Services Source to Settle Support for Complex Payments Supplier Collaboration Request for Service Negotiate Agreement Advances Receipts Invoice Payment Examples: Negotiate Payments: Make Payments: Validate: Match: Enforce: • Terms • Facilities services • Landscaping services • Architectural services • Milestones • Track project • Rates details • Advances • Retainage • Lump sums • Timecards • Receipts • Work confirmatio ns • Agreements • Invoices • Receipts • Recoupment of advances • Release of retainage Drive Consistent Execution of Negotiated Terms & Conditions in All Spend Categories .
Streamline with Global Practices And with Complete Procure-to-Pay Automation Identify & Qualify Vendors Create & Approve Requisition Receive Electronic Invoice Source and Contract Strategy Evaluate Bids Create Purchase Order Pay Supplier (EFT) Award to Vendor Purchasing Execution Finalize Pricing and Contract Send Electronic PO to Supplier Analyze Performance Receive Goods or Services. Inspect Adjust Contracts Add Structure to Strategic Activities and Execute Routine Transactions Automatically .
Systematize Global Best Practices With Flexible Procurement Models Request BU 1 BU 2 BU 3 Source Buy Pay BU 1 Shared Service BU 2 Request Source Buy Pay Decentralized Central Sourcing. Local Execution Request BU 1 Shared Service BU 2 Source Buy Pay BU 1 Automated financial reconciliation Request Source Buy Pay Shared Service BU 2 Automated financial reconciliation Complete Shared Services Transfer to Local Business Unit .
add. Ordering. and delete items Reduce Maintenance Efforts and Drive Spend Visibility . edit.Unified Catalog Architecture Establish a Single Authoring. approve. & Maintenance Environment Sourcing User Add new items from award lines Catalog Admin Bulkload / online author & update content Buyer Punchout & transparent punch-out Supplier Upload and maintain content Catalog Approval workflow s Requester Buyer View.
Content Security with Content Zones Provide the Right Content to the Right People Partition content into zones Content Zone 1 Suppliers A B C Combine zones to create stores Grant access by OU or responsibility X X Marketing Exec X Y Z Categories Catalog Content Zone 2 Suppliers A B C Promotional Items Professional buyer X X X X X Industrial MRO Maintenance X Y Z Categories • Improve control over what end users can see & user buying experience • Execute organizational unit-specific procurement strategies • Reduce risks associated with sensitive categories .
Leading Companies Worldwide Use Oracle Procurement Solutions Thompson Travel Group .
What Customers are Achieving… reduced MRO item costs by 20% sourced 50.1M annually via integrated procurement Thompson Travel Group saved over 25% on indirect goods purchases implemented internet procurement in only 60 days .000 items and reduced costs by 20% increased purchasing volume discounts by 5% reduced purchase order cycle time by 75% reduced purchase order processing time by 86% reduced purchasing processing costs 89% saved over $11M from Procurement & other EBS apps saved over $1.
E&C Estimated and Actual Landed Costs Integrated with Receiving and Invoicing Improved Administration and Supplier On Boarding Out of the box support for Oracle Enterprise Application Planned .What’s new in Procurement? Targeted Investment in Strategic Procurement Enhancements Across the Procurement Suite Spend Analytics & Classification Supplier Mgmt. &Supplier Hub Contracts Lifecycle Management Landed Cost Management Oracle Supplier Network Inline & assisted Classification (Patent Pending) Procurement and Spend Analytics Supplier Life Cycle Management Supplier Hub – User Defined Attributes Standalone Contracts Management Simplified & Major Systems Acquisitions for Public Sector.
SPEND ANALYTICS .
Spend Classification Intelligently classify and analyze purchasing trends • Improve accuracy of spend data • Avoid manually classifying data. Built with Oracle Data Mining • OBIEE based . Reduce cost of classifying data • Built for business users • Use UNSPSC or custom classification • Automated self learning.
Approve Spend Analytics Knowledge Base 4. Classify 3. Analyze . Extract In line classification 2.Classification and Analysis of Spend The Oracle Solution ERP OBIA Spend Classification 1.
2 .SUPPLIER MANAGEMENT *Part of Release 12.1.
Relationship Maintenance . Classification. Credit/Risk Assessments ( D&B. Bank Detail. eRFx/Survey ) Supplier Hub Supplier Inactivation Contract & Supplier Performance Analysis and Management Ongoing Assessments (eRFx/Survey) Supplier Profile.Oracle Supplier Management Comprehensive Solution for Supplier Management Invitation Supplier Search Supplier Self-Service Registration Supplier Profile. Qualification.
Oracle Supplier Management Benefits Supplier Qualification Finding Suppliers Improved efficiency • Single searchable unified supplier master • Highly enriched content (unlimited set of buyer-defined supplier attributes) • Can be embellished with 3rd party content Streamline process • Workflow to better coordinate across organization • Collect “gating” details & stakeholder feedback • Templates to ensure process consistency Supplier Compliance Eliminate redundancy • Avoid separate teams repeating similar checks • Identify minimum hard (insurance. diversity) & soft (labor practices) requirements • Track and monitor changes to compliance status Trusted Master Data Supplier Maintenance Avoid the costs of fragmented data • Single channel & repository for maintaining supplier master details • Self-service profile management for suppliers (extension of iSP features) • Data Quality tools to identify and merge duplicated identities across disparate systems • Consolidate & federate shared information across instances Supplier Assessment Consolidate qualitative feedback • Canvas internal teams on supplier performance • Templates to ensure consistent assessment • Track key risk factors • Provides universal visibility of supplier status .
Oracle Supplier Management Solution Product Offerings Oracle Supplier Lifecycle Management Supplier Qualification Supplier Search eRFx & Auctions Contract Negotiation & Binding Profile and Banking Details Order Collaboration Catalog Authoring Mfg Planning • Forecasts • Capacity • Waterfall Analysis Invoicing. Inquiry & Dispute Resolution VMI & Consigned Inventory Shipping & Work Confirmations Trusted Supplier Data Oracle Supplier Hub Legacy Legacy Supplier Inactivation Supplier Performance Mgmt • Extend supplier definition • Manage supplier qualification processes across organization • Perform ongoing risk & performance assessments • Track compliance information • Extend supplier definition • Consolidate supplier details from multiple legacy systems • Data quality tools to cleanse records • Use 3rd party services to enrich data • Publish back to legacy systems .
Oracle Supplier Hub Single Point of Governance EBS PeopleSoft SAP Custom Apps Other EBS PeopleSoft Trusted Master Data SAP Custom Apps BI • Hub consolidates & maintains complete.supplier profile updates only need to be applied once • Ensures consistent business relationship .updated master information distributed to all spoke applications . accurate and authoritative master data across the enterprise • Reduces maintenance costs .
Oracle Supplier Hub Source System Management for Supplier Import • Data Hub provides Source System Management (SSM) – Registration & cross-reference map tracking for connected source (spoke) systems Data Hub Registry ID Identifier A: BB253 Source System A Source System B 3177 Identifier B: 8808 BB253 8808 A B Supplier Hub Master – Synchronize primary supplier definition across multiple spoke systems .
000 HubZone Laptop Net 42 21.1M 20. • User Defined Profile Attributes and Control level information of the selected master supplier record for the • master Supplier profile. Business Classification.000 Small Bus.1M Revenue # of Employees Business Classifications Product and Services Invoicing Terms US$ 1. Desktop Net 45 21.000 Small Bus. Bank Detail. General and Industrial Classifications added to the master Supplier profile . HubZone Desktop Laptop Net 42 • Party level information for the master Supplier profile based on user choice from the identified duplicates. Product and Services.Oracle Supplier Hub Merging Supplier Profiles • Create single profile from multiple sources Source 1 (Purchasing) Source 2 (Payables) Merged Record US$ 1.
Oracle Supplier Lifecycle Management Prospective Supplier Qualification Supplier registration packet • Significantly enhanced version of iSP/Sourcing Registration process • Templates for process consistency • Questionnaire scoring • AME to route Registration Packet through organization Finance Dept Product Design Team Purchasing Dept Production & Distribution Team • Graphical view of approval status • Approvers can add feedback to request Quality Assurance Team Supplier Management Administrator • Registration details used to determine structure of approvers list • Enforces governance policies .
Inquiry & Dispute Resolution VMI & Consigned Inventory Shipping & Work Confirmations eRFx & Auctions Basic profile Prospect Probation Incumbent Obsolete Supplier Inactivation Supplier Performance Mgmt • Gather key assessment & risk factors peculiar to buying organization – Avoid data fragmentation – Avoid repetition of effort – Maintain on an on-going basis Extended Supplier Profile .Oracle Supplier Lifecycle Management Controlling Risk Supplier Qualification Supplier Search Contract Negotiation & Binding Profile and Banking Details Order Collaboration Catalog Authoring Mfg Planning • Forecasts • Capacity • Waterfall Analysis Invoicing.
View Documents Improved On Boarding Automatic Buyer Registration. OAG.Improve Collaboration with Oracle Supplier Network New product features and planned improvements Buyers Suppliers Supplier Network New Out of the box integration for Oracle Enterprise Customers Out of the box integration with E-Business suite* Enhanced B2B Messaging (EIPP) cXML. On Boarding Service * * Planned . CSV* Punch In to iSupplier Portal. EDI *.
PROCUREMENT ON DEMAND .
forced upgrade .Spend Management Spend Management Vendors Asked You To Choose • • • • Powerful management Tools Completely customizable Tightly coupled with ERP Upgrade on own term vs. • • • • Easy to use and fast to deploy Managed by business users Isolated Spend Management & Procurement processes Limited functionality.
Procurement On Demand Deployment Options to Meet your Need Example Deployment .
Flexible. Integrated Community Messaging Business Process & Services Platform .Oracle Procurement On Demand Complete. Open.
Procurement On Demand Customers Over 150 existing customers across all verticals .
In Summary Focus on Opportunities to Achieve Rapid Return Today Invest in Ways to Standardize and Simplify with a Global Business Platform .
This action might not be possible to undo. Are you sure you want to continue?