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Copyright © 2013, Oracle and/or its affiliates. All rights reserved.

Sourcing and Procurement
Contracts:
Strategy, Update, and
Roadmap
Mark Peachey
Director, Product Strategy
Collaborate 2013
Denver

Safe Harbor Statement
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 decision.
The development, release, and timing of any features or
functionality described for Oracle’s products remains at the
sole discretion of Oracle.

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Copyright © 2013, Oracle and/or its affiliates. All rights reserved.

Opportunity:
Transform to Value
Driven Procurement

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Oracle and/or its affiliates. a firm would have to.Procurement’s Disproportionate Margin Impact Small Changes. All rights reserved. . In order to obtain an equivalent impact. Big Difference. & Other Expenses 50 25 Purchases 0 Before 5 After Copyright © 2013. Tax... 5% Reduction in Spend Increases Profit by 50% 100 Profit Profit +50% • Increase Sales by 50% • Cut Overhead by 20% 75 Spend -5% Payroll.

Oracle and/or its affiliates.Classic eSourcing Playbook Transfer Margins From Supplier’s Bottom Line to Your Own  Pick low hanging fruit Common Denominator for Requirements Price Benchmarks from Emerging Markets  Shake up incumbents  Rationalize pricing  Generate CxO support Lowest  Standardize agreements Bid Wins the Business 6 Copyright © 2013. Prices from Transparent Bidding (Auctions)  Consolidate suppliers  Create EPS impact . All rights reserved.

Oracle and/or its affiliates.Stand Alone Contracts to the Rescue? Hindered by Isolation • Limited price enforcement • Resistance from Legal Dept • “Walled Garden” repository • Meaningful analytics ? 7 Copyright © 2013. . All rights reserved.

What About Successful Companies? Corporate Strategy Sourcing Strategy Program Design Talent & Knowledge Management Formal Metrics & Measurement 8 Copyright © 2013. Change Management Consultation & Process Facilitation Project Management . Oracle and/or its affiliates. All rights reserved.

Win War for Talent “…leading procurement organizations are becoming more strategic.Leading CPOs Are Diversifying Playbook To Better Align with Enterprise Goals Align with the Business Contribute to the Top and Bottom Lines Consistent Manage Risk Supplier Systemically Relationship Management Tailored Procurement and Sourcing Strategies Adopt Technology 9 Copyright © 2013. Oracle and/or its affiliates. playing an active role in developing and executing top-line strategies for growth.” Source: AT Kearney Excellence in Supply Management 2011 . All rights reserved.

Oracle and/or its affiliates. Reduce Asset Intensity Quality Risk Innovation Next Practices . All rights reserved.Value-Driven Procurement Seizing the Larger Opportunity Complexity Reduction Revenue Growth Corporate Social Responsibility Supply Assurance Product & Service Differentiation Procurement Value Supplier Development Cost Best Practices 10 Copyright © 2013.

All rights reserved. Oracle and/or its affiliates.Creating Alignment Via Key Value Drivers Extend Reach of Procurement Knowledge RISK PRODUCTS DEMAND SUPPLIERS SPEND SUPPLY 11 Copyright © 2013. ASSETS .

Multiple Business Models  Standard Process  Varying objectives  Upstream planning and scheduling  Coordination & Execution 12 Copyright © 2013. Oracle and/or its affiliates. . All rights reserved.

All rights reserved. Oracle and/or its affiliates. .Sourcing and Contracts 13 Copyright © 2013.

All rights reserved. Oracle and/or its affiliates. Track & Update Use Standalone Contracts Dynamic Rules & Word Sync Create Re-usable Components Copyright © 2013.Streamlined Negotiation Sourcing & Contract Negotiation in Sync Tactical / Strategic Requirements Establish Standards & Org. Policies Define Strategies & Key Components SOURCING & SOURCING OPTIMIZATION Conduct OnLine Negotiations Analyze & Monitor Incorporate in Negotiation Capture Deliverables & Supplier Variables Monitor. Re-negotiate & new round Compare & Award PROCUREMENT CONTRACTS 14 Re-use & Configure .

Projects. PLM.New Technology Requirements Functionality • Program Management • Project Management • Knowledge Management • Talent Management 15 Copyright © 2013. Oracle and/or its affiliates. All rights reserved. Interoperability • Supplier & Risk Management • SCM. • Procure-to-Pay • Planning & Budgeting Intelligence • Master Data Management • Transactional Data Management • Forecasting & Scenario Planning . etc.

Oracle and/or its affiliates.Sourcing At-a-Glance Strategic Sourcing Award Supply Contract Supplier Lifecycle Mgmt 16 Key Components • Strategic Sourcing • Sourcing Optimization • Supplier Lifecycle Management • Procurement and Spend Analytics • Spend Classification Key Capabilities Key Performance Indicators • Easy sourcing event creation • Percent Purchases Negotiated • Online negotiations and bids with automatic scoring • Awarded Amounts & recommendations • Top Suppliers • Improve Supplier Performance Management • Projected Savings • Enhance Supplier Compliance Management • Realized Savings • Archive and reference • Parent Supplier Count Copyright © 2013. All rights reserved. .

Oracle and/or its affiliates.Contracts At-a-Glance Buying Organization Key Functions Request  Project Mgmt  Legal  Finance Negotiate and Author Supplier Organization Key Functions 17  Procurement Copyright © 2013. Approve and Sign Execute  Sales  Project Mgmt  Legal  Billing  Top Mgmt Close-Out OR Renew  Top Mgmt . All rights reserved.

Improve Strategic Sourcing Outcomes Suppliers Shorter time to market  Faster cycle times  Access to new technologies  Total cost reduction  Compliance to negotiated agreements Operations Procurement Research & Development 18 Copyright © 2013. All rights reserved. . Oracle and/or its affiliates.

All rights reserved. .Gaining Leverage for Enhanced Impact 19 Copyright © 2013. Oracle and/or its affiliates.

Ordering. and consolidate common processes and suppliers • Enable localization for unique categories and practices • Generate cost. country support 20 Copyright © 2013. • Centralize. Oracle and/or its affiliates. All rights reserved. & Payment Processes • Multi language. scale. standardize. and tax benefit .Execute on Category Strategies Center-Led Services • Complete from Planning & Budgeting through Payment • Integrated Financial and Procurement systems of record • Shared Contracting. currency.

Adapt to Changing Spending Patterns .Use Information as a Fundamental Enabler Classify Spend for Use by Procurement P-CARD FEEDS Organize Spend Into Logical Categories Spend Analysis Automate Expensive Data Management Employee Expense Analysis OTHER LEGACY A/P 21 Copyright © 2013. Oracle and/or its affiliates. All rights reserved.

Oracle and/or its affiliates.Create Insight and Understanding Procurement and Spend Analytics • Prebuilt integration • Best Practice library of over 250 reports and alerts • Complete solution for • • • • Spend Procurement Performance Supplier Performance Employee Expenses • Configurable & Extensible • Suited to heterogeneous back-end applications • Pinpoints and prioritizes savings opportunities • Monitors key trends and period comparisons • Measures key operational efficiencies 22 Copyright © 2013. . All rights reserved.

All rights reserved.Agenda 23 Copyright © 2013. Oracle and/or its affiliates.  Oracle Sourcing .

All rights reserved.Key Features in Oracle Sourcing KEY FEATURES in R12 & R12+ • Access From Professional Buyer’s Work Center • Complex contract negotiation • Automatic & team scoring • Knockout of suppliers from shortlist • Negotiation styles • Collaboration team messaging • Prospective & new supplier invitation • Contractor buyer support 24 Copyright © 2013. Oracle and/or its affiliates. • Enhanced Spreadsheet support • Price Tier Optimization • Team Scoring • Two Stage Evaluation of RFPs • Cost Factor Enhancements • Bid Response PDF • Countdown Clock • Supplier Incentives • Supplier Reminder Notifications • Earnest Money Deposit .

Auction Request Driven Aggregate requests across the enterprise to leverage buying power 25 Copyright © 2013. All rights reserved. Auction Renewal Driven Instantly create new sourcing event from previous agreements Requisitions Sourcing template RFx. Oracle and/or its affiliates. .Structured Sourcing Event Creation Greatly Reduce Preparation Time and Manual Effort Expiring agreement 1-Click renegotiation RFx.

Automatic Scoring of Requirements Quickly Identify the Best Qualified Suppliers Requirements Weight Are you ISO certified? Number of years in business Number of shipping locations Value (Score) Quote 990 Response Score 25% Yes (100) No (0) No 0 35% > 14 (100) 10-14 (75) < 10 (0) 15 35 40% > 19 (100) 11-19 (50) 1-10 (25) 35 40 Total Score Calculated by Oracle Sourcing 75 • Automatically eliminate suppliers that score below minimum requirements • Automatically exclude non-compliant suppliers from shortlists 26 Copyright © 2013. . Oracle and/or its affiliates. All rights reserved.

Visible during analysis and award Asian supplier . NA Europe Asia LA Supplier Transformed Bid Bid $21 $21 $16 $23 $20 $23 $14 $26 • Capture Total Cost . Oracle and/or its affiliates. freight) .Intangible (eg. switching costs) .Cost Factors and Bid Transformation Evaluate Tangible and Intangible Costs European supplier North American supplier Latin American supplier Example: LA Supplier Bid $14 System Added Freight $6 Tariff $4 Risk $2 Transformed Bid = $26 27 Copyright © 2013.View transformed or un-transformed .Tangible (eg. All rights reserved.Buyer and supplier entered • Evaluate Transformed Bids .

Sourcing Knowledge Capture Drive Optimal Results by Re-Using Best Practices Knowledge from Sourcing Methodologies and Past Events Sourcing policy rules Negotiation event style New Sourcing Event Sourcing templates Supplier lists Pricing factors Bidding rules Scoring methods 28 Copyright © 2013. Oracle and/or its affiliates. • Leverage proven practices • Replicate buyer expertise • Retain knowledge across the organization . All rights reserved.

Oracle and/or its affiliates.Agenda 29 Copyright © 2013.  Oracle Procurement Contracts . All rights reserved.

All rights reserved. Central Terms Library Use • Standard Western Region T’s & C’s • Localized Versions Corporate Headquarters Eastern Region . Oracle and/or its affiliates.Global Terms Repository Use Terms “As Is” or Adapt to Local Requirements Policy Makers Business Units Define Legal Procurement / Sales • Legal Rqmts • Best Practices • Regulatory Policies Government Regulations 30 Copyright © 2013.

deletions & • Commercial terms • Responses to questions • User-defined variable templates • Policy deviation rules 31 Copyright © 2013. Oracle and/or its affiliates.Standardize Processes But Allow for Variations Contract Terms Library Clause Deviations Policy Deviations Contract Terms Library Establish: Identify: Identify violations based on: • Standard contract • Non-standard clauses • Additions. All rights reserved. section modifications • Excluded expertsuggested clauses values .

Oracle and/or its affiliates. Credit Problems. Insurance Coverage Other  OFAC / Suspect / Debarred Watch-list  Country . Warranty Support Operational  Labor Action.Ability to Grow. All rights reserved. Force Majeure / Natural Disaster / Security  Liens and Claims.Potential for Civil Unrest/Military Action.Systematically Track Threats and Vulnerabilities 32 Reputation  Negative Media – Code of Conduct. . Public Health Copyright © 2013. Product Safety Standards  Potential Criminal Investigations Compliance  Code of Conduct / Hazardous Chemical Usage / Worker Cond. Bankruptcy  Business Losses Transaction  Product/Service Delivery Delay / On-Time Performance  Product Quality Issues – Out of Specification.  Contract / SLA compliance Financial  Financial stability .

contract value. . Draft Contract • Clauses default based on product.Improve Cycle Time Expert-based Contract Authoring • Configurable rules Contract Template Commercial Government Over $50k? . All rights reserved. Oracle and/or its affiliates. etc. supplier. • Author high quality contracts with minimal legal supervision . No Yes Add Clauses • High Value • Insurance 33 drive terms selection for complex contracts Industry Segment? Copyright © 2013. .

Oracle and/or its affiliates. All rights reserved.Rule-Based Policy Approvals Tailor Approval Routing • Accelerate approval cycles by highlighting standard thresholds • Route approvals based on category. • View redline comparisons of modified terms to standard 34 Copyright © 2013. etc. existence of non-standard terms. .

Deliver Value through Continuous Development  Improve User Productivity  Streamline Business Processes  Strengthen Compliance and Control 35 Copyright © 2013. . Oracle and/or its affiliates. All rights reserved.

R12. Rules. All rights reserved.3 . .Improve User Productivity Oracle Sourcing & Procurement Contracts  Applying multiple Contract Templates to a Sourcing or Purchasing document  APIs to import Contract Templates.1. Oracle and/or its affiliates. Questions and Constants  Display of Clause numbers and sorting by Clause numbers  Add new Requisitions to a draft Sourcing or a Purchasing document 36 Copyright © 2013.

3 .Streamline Business Processes Oracle Sourcing & Procurement Contracts  Deletion of Amendment Specific Clauses and Provisional Sections  Capturing and Printing of Multi-Row Variables  Allow and Track Offer Withdrawals  Support Attachments in Online Discussions 37 Copyright © 2013.1.R12. Oracle and/or its affiliates. . All rights reserved.

R12. All rights reserved. Oracle and/or its affiliates.Strengthen Compliance and Control Oracle Sourcing & Procurement Contracts  Control Defaulting Section for Contract Expert added Clauses  Additional Descriptors for clauses in the contract terms page  eNDA process for displaying Terms and Conditions with attachments to supplier users and configuring text based on Operating Unit  MS Word Synchronization 38 Copyright © 2013. .1.3 .

.Product Roadmap Planned Enhancements  Sourcing Project Dashboard  Staggered Award of RFQs  Alternate Award post Order Cancellation  Standalone Contracts Enhancements – Adding lines to repository contracts. linking to Procurement documents  Contract Expert Enhancements  Alternate Offers and Multiple Active Offers 39 Copyright © 2013. All rights reserved. Oracle and/or its affiliates.

Oracle and/or its affiliates.Oracle Sourcing and Procurement Contracts Driving Value Driven Procurement • Standardize to meet category and business objectives • Collaborate across teams • Maintain visibility. . flexibility. and control 40 Copyright © 2013. All rights reserved.

Q&A 41 Copyright © 2013. All rights reserved. . Oracle and/or its affiliates.

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