Purchasing Enable Buying Professionals to Focus on Strategic Activities Presenter’s Name Presenter’s Title
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.
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.
Oracle At-a-Glance Globally…
#1 in Database #1 in Supply Chain Mgmt #1 in Customer Relationship Mgmt #1 in Human Capital Mgmt #1 in Industries Founded in 1977. Headquarters in Redwood Shores, CA with operations in 145 countries.
• 286,000 total customers • 235,200 database customers • 37,500 applications customers • 24,000 SMB apps customers • 53,800 middleware customers
- Retail
• 19,500 partners
- Publi ublic c Secto ectorr
• 74,000 employees
- Prof Profes essi sion onal al Serv Servic ices es
• 14,000 developers
- Fina Financ ncia iall Serv Servic ices es
• 7,500 support staff
- Comm Commu unica nicati tion ons s
Agenda
• Business Challenges • Oracle’s Leadership Position • Solution Overview • Customer Success
Purchasing At-a-Glance
• Specifications • Purchase Releases • Approved Requisitions
• Order Changes • Supply Commits • Supplier Performance
Demand
Orders
Budget Holder
Buying Professional
Spend Visibility
Compliance
Suppliers
Supply Base Mgmt
Business Pressures How Do I …
Improve Supply Mgmt
Drive Cost Reduction
• Exploit high value
• Make staff more productive
opportunities and identify the next round of savings?
& stretch purchasing budget?
• Proactively tackle spending
• Drive reductions in errors and manual processing?
occurring in lines of business?
Procurement Org Enforce Compliance
Increase Efficiency
• Track contract compliance and
• Drive touchless buying to
ensure that contracted pricing appears on every order?
• Drive the right supplier allocation on purchase orders?
eliminate the risks and lag time associated with paperwork?
• Focus efforts on areas that provide the biggest savings?
Business Challenges Strategic Initiatives
Executive Mandates
• Cut costs • Reduce resources • Outpace inflation
Finance & Legal Requirements
• Outsourcing • Accelerated product development
Routine Tasks
Contract Compliance
• Manual, time-consuming
• Contract leakage • Adherence to terms
& error prone processes • Inability to manage exceptions
Business Unit A
HR
and conditions
Buyer
Facilities Operations Other
Supplier 1
• Regulatory compliance • Budgeting & planning
...
Supplier 2
HR
Facilities Operations Other
Supplier 3
...
Supplier 4
Business Unit B
Goal: Achieve World Class Procurement Drive 60% Higher Savings from Procurement Performance Indicator
Typical Purchasing Organization
World Class Purchasing Organization
Comparison Summary
FTE per $Billion of Spend
104
54
48% Less Staff
Total Cost of Procurement (as % of Spend)
1.03%
0.72%
30% Lower Costs
Suppliers Per $Billion of Spend
7,805
3,512
More Buying Power
Technology Investment per $Billion spend
$1.1 Million
$1.4 Million
Better Information Source: Hackett Group & Oracle
Shift
Investment in Procurement to Higher-Value Activities
Reduce
Staff by Swapping Labor for Technology
Agenda
• Business Challenges • Oracle’s Leadership Position • Solution Overview • Customer Success
What Customers are Saying… “With Oracle, our purchasing team’s focus changed from managing paper to analyzing purchasing trends and negotiating best prices with vendors. Oracle helped enforce contractual compliance by making only goods from approved suppliers available to our staff. Contract leakage is down from 65% to 15%, and we anticipate a further reduction.” -- Peter Rentell, Head of Contract Management
“Oracle Procurement has helped reduce the number of calls from the Pella Division’s corporate purchasing department and vendors by as much as 95%. All needed information is now on the PO.” -- Tracey Buck, Coordinator of Facilities Mgmt
What Customers are Achieving… saved $74M since 1999 saved $5.9M in two years decreased PO processing costs by 59% cut purchasing costs by 50% reduced buyer workload by 60% cut PO cycle time by 90% cut PO cycle time by 86% eliminated 43 legacy req-to-pay and finance systems
A Few More Customers…
ChangAn Automobile Group
Al Ghurair Group
Agenda
• Business Challenges • Oracle’s Leadership Position • Solution Overview • Customer Success
Oracle Advanced Procurement The Integrated Suite That Dramatically Cuts All Supply Mgmt Costs Spend Categories
Reduce Spend on Goods and Services Spend Analysis
Supplier Collaboration
Category Management Online Sourcing
Indirect Goods
Orders
Streamline Procurement Processes
Supplier Portal Logistics
Services
Approval Routing
Engineered Goods
Automated Payment
Supplier Network
Budget-Based Procurement Contract Management
Direct Materials
Touchless Buying
Settlement
Supplier Performance
Enforce Policy Compliance
Profile Management
Oracle Purchasing Solution Free Buying Professionals to Focus on Strategic Activities Spend Categories
• Pre-Defined
Indirect Goods
Suppliers
Supply Base Management • Negotiated Policies Contracts • Approved • Blanket Supplier Lists Agreements
• Supplier Information • Drop Ship Details
Business Services
Consumables & Supplies
Services
Consolidate All Demand Engineered Goods
Approve & Allocate
Receive, Reconcile, and Pay
Flexible Procurement Automation Exceptions
Direct Materials
Generate Order Order Documents
Engineer to Order
Manual Approval
Demand Workbench
Parts & Components
Oracle Purchasing
Enables you to…
Automate Entire Procure-to-Pay Cycle Improve Supply Base Management Adapt to Any Purchasing Practice
Flexible Procurement Automation Eliminate Paper and Wasted Time Purchasing Professional Exception Processing Demand / Approved Requisitions
Consolidate Demand
Review / Approve
Source & Allocate
Create & Route PO
Receive & Reconcile
Payment Settlement
Automatic Processing
Financials Integration
Suppliers
• Efficiently Process Demand with Least Manual Work via Demand Workbench • Automatically Allocate Spend to Suppliers via Embedded Sourcing Rules • Speed Receiving and Settlement via Integration to Financials
Demand Workbench Efficiently Process Demand with Least Manual Work
Demand Workbench View, search, Determine
Requisitions
sort, reassign, or reject demand from work queues
supply source via ASL and policy rules
Auto-create by gathering lines from multiple requisitions
Buyer
Manage Buyer Workload and Eliminate Error-Prone Manual Re-Keying
PO Execution
Embedded Sourcing Rules Make Buyers More Productive By Executing Touchless Buying
Consolidated Demand
• Configurable allocation
Rules-Based logic with flexible Auto-Sourcing hierarchies Engine • Define for item, commodity, cost center location
Goods & Services
Global contracts & blanket agreements
Approved supplier lists
Demand plan, onetime purchases
Supplier profiles
Approval logic (optional)
Purchasing Documents
Automatic Communication
• POs • Blanket
• Supplier Portal • OSN* / XML /
release
• RFQs • etc.
EDI
• eMail • Fax
Determine the Right Supplier Allocation and Create Orders Without Buyer Intervention *Oracle Supplier Network
Professional Buyer’s Work Center Enable Command & Control for the Procurement Professional Professional Buyer’s Work Center
Negotiations
Contracts & Agreements
Requisitions
• Exceptions • Agreements • Performance Analysis
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 Command and 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
Purchasing Integration to Financials Speed Receiving and Settlement Automated 3-Way Match w/ Optional Evaluated Receipt Settlement
Operations Goods or Service Receipt
Purchasing Purchase Order or P-Card
Pay & Issue Resolution Suppliers OSN* / EDI / XML
SWIFTNet Financials Electronic Invoice
Banks & Payment Processors
Supplier Portal
• Track orders, receipts, inspections, & services through the entire process • Capture early payment discounts & eliminate supplier over-billing • Save time by eliminating paper processing
Oracle Purchasing
Enables you to…
Automate Entire Procure-to-Pay Cycle Improve Supply Base Management Adapt to Any Purchasing Practice
Centralize Supplier & Item Data Quickly Find and Manage Supply Base Information
-
Supplier Master
Approved Supplier Lists
Contact information Pricing & discounts Pending quotes / orders Contract terms Blanket agreements Account history / status
- Define and view certification status of suppliers for items - View and update supplier status, including ‘barred’ and preferred
Buying Professional
Item Catalogs -
Item number/ description Manufacturer part # Commodity type Costing elements Preferred supplier(s)
• Complete tracking of suppliers, goods, and services • Universal collaboration with global scalability & accessibility
Drive Visibility Through Consistency Across Procurement Processes
Shareable Agreements Expand Contract Utilization Business Unit 1
Global Agreement Volume Purchasing Based on Standard Agreement
Goods
Services
Local Amendments
Local Agreement Volume Purchasing Based on Localized Agreement
Internal / External Approval
Business Unit 2
Business Unit 3
• Centrally manage and share agreements within or across business units • Capture base pricing, discounts, payment terms, volume agreements (cumulative and retroactive pricing on received / invoiced goods supported)
• Automatically utilize agreement and pricing to issue orders
Full Integration With Advanced Procurement Reduce Cost of Procurement and Increase Visibility Strategic sourcing
Supplier portal
Contract management
Oracle Supplier Network
Purchasing
Employee self-service
EDI, XML, Email, Fax
E-Business Suite DBI
PLM
Fusion Middleware Database
CRM
Financials
EAM
Mfg
HCM
Apps Server, Dev Tools, Process Orchestration, Security, Portal, Web Services 10g, RAC, Oblix, Times Ten
Easily Extend Purchasing to Integrate with Suppliers and Internal Groups
Example: Prospective Supplier Registration Reduce Overhead with Self-Service Registration Supplier Requests
• Use corporate website to allow interested prospective suppliers to register
Supplier Registration
Review & Approval
• Configure qualification
• Use request details to
details captured during registration
• Define req. elements of supplier profile
• Include customized questionnaires* as part of registration
customize approval flow
• Enable approvers to update details
• Notify suppliers via email once registration request has been approved / rejected * Requires iSurvey
Example: Supplier Change Orders Eliminate Processing of Trivial Change Requests Touchless Processing
Approver
Supplier Change Orders / Requests
Within Requester’s tolerance?
Supplier Portal
OSN*/ XML / EDI
eMail
Route to Requester’s hierarchy
Buyer No
Route changes to Buyer
Yes PO updated & submitted to approval workflow
Yes PO changes within limits?
Fax
No
Yes Within Buyer’s tolerance?
PO Approved
Exception Processing
Purchasing Mgr No
Route changes to buyer’s hierarchy
Example: Procurement for Complex Services Source to Settle Support for Complex Payments
Define progress payments - rate, lumpsum & milestone pay items
• Suppliers provide timecards, receipts, and work confirmation information that are matched with agreements and invoices
• Settlement drives release of recoupment of advances & retainage
Oracle Purchasing
Enables you to…
Automate Entire Procure-to-Pay Cycle Improve Supply Base Management Adapt to Any Purchasing Practice
Center-Led Procurement Support Achieve Global Savings Via Multiple Models Request
Source
Buy
Pay
Request
BU 1
BU 1
BU 2
Shared Service
BU 3
BU 2
Decentralized Request
Source
Buy
Source
Buy
Pay
Central Sourcing, Local Execution Pay
Request
BU 1 Shared Service BU 2
Complete Shared Services
Source
Buy
Pay
BU 1
Automated financial reconciliation
Shared Service
Automated financial reconciliation
BU 2
Transfer to Local Business Unit
Enterprise-Wide Enforcement Drive Compliance and Reform Spending Behavior
Indirect Goods
Online Catalogs & Contracts
Matching Rules
Services
Engineered Goods
Direct Materials
Requisition
Review / Approve
Approval Policies (e.g., Funds Checking)
Create & Route PO
Receive & Reconcile
Pay Supplier
Accrue / Relieve Tax Encumbrance
Configurable, Pre-Modeled Best Practice Purchasing Workflow
Example: Enterprise-Wide Enforcement Governance and Control Options Corporate Policy Controls • Approval policies • 3-way match approval level • Pricing, receiving, and
Your Company
invoicing tolerances • Vendor hold enforcement • Security hierarchy • Contingent worker access
Orders
Suppliers
Invoices Payments
Centrally Manage Policies and Procedures
Flexible Purchasing Definitions • Multi-Org Access Control (MOAC) •
Date formats
• • • • •
Time zones Tax rules Chart of accounts Fiscal & legal requirements Supported languages and currencies
Accommodate Global Requirements
Purchasing Execution Controls • • • • • • • •
Numbering options Price break types Supplier qualifications Tax defaults Default accrual accounts Accrual – receipt / period end Reporting & transaction currencies Configurable document styles
Support Unique Transactions
Example: Enterprise-Wide Enforcement Comprehensive Financial Controls Flexible Cost Allocation
• • • •
Automatic account defaults based on business rules Security-based override capabilities Distribute charges across multiple accounts/cost-centers Allocate charges to expense or material accounts based on usage
Project-Based Requests
• Request goods and services for specific projects • Allocate costs to multiple project accounts and budgets • Track and report against projects
Budgets and Encumbrance
• • • •
Grants Management
Control spending using budgets and encumbrance accounting Track spending limits and spend-to-date Real-time validation of funds during request creation Approvals based on budget ownership
• Capture grant award information on individual requests • Allocate costs across multiple grants • Default grants information onto request lines to minimize data entry
Open Architecture Leverage Legacy and Supplier Systems Financials
• 1000’s of Public API’s • Integration Repository
Supplier Systems
Oracle Purchasing Supply Base Management
Supplier Transactions
Invoicing
• Web Services, B-B, EAI • 900 Business Events
Flexible Procurement Automation
Supply Chain Management ERP / Logistics
• 150 OAG Messages • Industry Specific Protocols
Requisitions Demand Workbench
• OAS10g transformation and message delivery services
Legacy Technologies
Oracle Purchasing
End-to-end process support including exception-based mgmt and automated three-way match
Automate Entire Procure-to-Pay Cycle
Centralized mgmt of ASL, items & contracts with automated pricing and support for adv. supply programs
Improve Supply Base Management
Center-led procurement & enterprise wide enforcement with open integration for legacy applications
Adapt to Any Purchasing Practice
Oracle Advanced Procurement Products Develop Contracts
Market
Projects HR
Sell Order
Customers, Suppliers,
Finance
Products,
Maintain
Plan …
Procure
Service
Make Fulfill
Purchasing Sourcing Sourcing Optimization Procurement Contracts iProcurement Services Procurement iSupplier Portal Supplier Network* Purchasing Intelligence
*Complimentary service component of Advanced Procurement Suite
Evolution of Oracle Advanced Procurement Base Differentiators…
New in 11i.10…
New in R12…
• Self-service enterprise
• Services procurement –
• Professional Buyer’s
requisitioning from suppliers or internal stock • Integrated asset and production planning • Supplier Self-Service • Flexible invoice matching including match to receipt • Automatic invoice and debit memo generation • Project- and budgetarybased purchasing • Multi-attribute scoring for reverse auctions and RFQs • Packaged spend, supplier , and commodity intelligence • Advanced pricing capabilities • Transparent Punchout • Global Agreements
contingent labor & bus services, negotiation through payment • Procurement contracts – global T&Cs standards, negotiation, doc & change mgmt, compliance • Formula-based pricing & tiered discounts (Advanced Pricing) • Retroactive pricing including automated invoice adjustments • Negotiate with subjective scoring and what-if analyses • Automatic bid scoring and award (Sourcing Optimization) • Shared services procurement • Requisition “SmartForms” • LPN & lot/serial receiving • Supplier managed banking • XML publisher for .pdf printing
Workcenter • 2-way MS Word integration • Unified catalog architecture • Shared services support • Requestor directed procurement • Prospective supplier registration using iSurvey • Supplier catalog authoring • Tolerance based order change auto-approval • Supplier scorecarding • Prospective supplier registration • Advanced pricing integration • Team scoring of sourcing rqmts • Parallel approvals • Position hierarchy approvals • Complex work procurement • eTax integration
A Solution to Meet All Your Needs Manage All Item Categories and Demand Types
Planning
Maintenance & Operations
Project Mgmt
Other (e.g., HR)
Complete Category Management Marketing • Advertising and Print • Shows and Promotions
Project Management • Capital Expenditures • Building & Construction • Fleet Purchases
Production • Raw Materials • Components • Assemblies
Logistics • Full truck, LTL, Parcel, etc. • Ocean, Air & Rail • Warehouse/Logistics Svcs • Fleet & Maintenance Svcs
Self-Service • Office Supplies • Contingent Labor • Travel and Entertainment
Information Technology • Hardware, Software • Leasing & Financial Services • Professional Services • Networking, Wireless
Facilities • HVAC • Janitorial • Landscaping • Utilities • Furniture & Fixtures
Maintenance • Repair Supplies • Replacement Parts • Equipment • Tooling
Implement Based on Procurement Priorities Adopt Applications On Demand or On Premises e m i Cut Unit Cost While T r Streamlining Processes e v O s e v i t c e j b Strategic O Sourcing t n e m Procure e r to-Pay u c o r P
Deploy Self Service To Free-up Staff
Create Savings, Drive Value, & Enforce Compliance Spend Contract Management Analysis
Supplier Enablement
Employee Self-Service
• Focus early wins and ROI • Operate fully integrated or stand alone • Lower the time & cost to implement& maintain applications
All Supported by Leading Technology
• • • • • • • • • • • •
J2EE Application Server Service-Oriented Architecture Business Process Mgmt Business Intelligence Content Management Identity Management Collaboration Suite Enterprise Portal Business Integration Data Hubs Developer Tools Web Services Management
• • • • • • • • • • • •
Real Application Clusters Advanced Security Embeddable Secure Enterprise Search Data Warehousing Server Virtualization Enterprise Management Partitioning OLAP Data Mining Spatial Data Secure Backup
Agenda
• Business Challenges • Oracle’s Leadership Position • Solution Overview • Customer Success
OVERVIEW • Leading private Ivy League university • Largest private employer in Philadelphia with 12,300 employees • 22,300 students; 233,000 living alumni; 151 buildings over 269 acres • $495M annual purchasing spend; over 240,000 transactions
CUSTOMER PERSPECTIVE “Using Oracle Advanced Procurement and Oracle Financials has enabled us to transform the purchasing department to a value-added organization, resulting in over $74 million in documented cost savings.” -- Ralph Maier, Dir. of Purchasing Services
CHALLENGES / OPPORTUNITIES • Leverage significant buying power to reduce the costs of products and services • Improve the buying experience of researchers and administrative staff
RESULTS • Saved $77M in indirect procurement • Reduced invoice processing cost as much as 98% and processing time by 40% • Lowered procurement prices by as much as 35% • Increased central purchasing productivity by 100% • Raised accounts payable productivity by 20%
SOLUTIONS • Purchasing • iProcurement • Financials
• General Ledger • Payables • Cash Management
COMPANY OVERVIEW • $160B global business leader • 48 distinct operating units • 316,000 employees in over 100 countries CHALLENGES / OPPORTUNITIES • Replace error-prone manual processes with self-service ordering • Consolidate supplier contracts and reduce purchasing costs SOLUTIONS • Purchasing • iProcurement • Inventory • Projects • Human Resources
CUSTOMER PERSPECTIVE “We have already realized significant savings from implementing Oracle iProcurement 11i and anticipate more.” -- Gary Reiner, Senior VP and CIO
RESULTS • Granted 35K users access to 800K approved catalog lines • Achieved complete integration -- 100% electronic • Instituted in 5 languages
COMPANY OVERVIEW • Operator of the registry for .com and .net Internet suffixes • Supports billions of domain name lookups on the internet daily • Secures 400,000 websites and processes more than 30% of all e-commerce transactions in North America CHALLENGES / OPPORTUNITIES • Gain better control over fast growth and provide better information faster to the senior management team
• Eliminate costly inefficiencies & potential business risk from separately managing different workforces, business processes, IT networks, & support services SOLUTIONS • Purchasing • iProcurement • Advanced Pricing • Financials
• • • •
Human Resources Self-Service HR Internet Expenses Order Mgmt
CUSTOMER PERSPECTIVE “Prior to Oracle, invoices were difficult to track and assign to specific purchases and vendors. With the Oracle system, we can now focus on trend analysis for spending and vendor negotiations which will deliver more value to VeriSign.” -- Jade Dauser, Purchasing Director
RESULTS
• Reduced purchase order processing time by 50%
• Increased buyer productivity 300% • Decreased spending, increased contract compliance, and cut administration costs • Links each purchase to GL category and each PO to an Invoice
COMPANY OVERVIEW • $1B+ global manufacturer of electronic instruments & electric motors • 7,800 employees at 40 plants worldwide produce 50 million motors • 2,700 users at 27 sites
CHALLENGES / OPPORTUNITIES • Enable buyers to more effectively leverage purchasing power • Reduce administrative costs
SOLUTIONS • iProcurement • Purchasing • Financials • Discrete Mfg • Inventory
CUSTOMER PERSPECTIVE “We conservatively expect our Oracle Internet Procurement initiative to reduce our maintenance, repair, and operating spend by 10%, resulting in millions of dollars in savings and a substantial positive impact on earnings.” -- Bill Lawson, CIO
RESULTS • Reduced procurement costs by 14% • Standardized & streamlined processes with 20,000 global suppliers • Oracle Procurement expected to handle $500M in annual spend
OVERVIEW • Oversees North America’s largest public housing program • Manages over 2,700 buildings • 420,000 people live in New York City Housing Authority housing developments CHALLENGES / OPPORTUNITIES • Homegrown and vendor legacy systems were expensive and did not meet management’s information needs • Gain tighter visibility and control over spending SOLUTIONS • iProcurement • Purchasing • Inventory • Financials • Public Sector Budgeting
• • • • •
Fixed Assets Grants Human Resources Order Management Cash Management
CUSTOMER PERSPECTIVE “We have seen increased productivity in warehouse operations, we have eliminated physical inventory, and automated our procurement process. All of which has resulted in significant labor productivity improvement.” -- Natalie Rivers, Deputy GM for Admin.
RESULTS • Estimated savings of $50 per requisition, adding up to %150M in savings per year using iProcurement • Reduced delivery time to housing developments from 9 weeks to 3-5 days • Reduced maverick spending from $29M to $10M • Plan to save $2M annually in earlypayment discounts
Oracle Purchasing
Automate the Entire Procure-To-Pay Cycle Improve Supply Base Management Adapt to Any Purchasing Practice
Appendix Additional Advanced Procurement Integration Points
Example: Advanced Inventory Mgmt Support Supply Cost Reduction Programs Example Programs Min-Max and Kanban Replenishment
Enabling Capabilities Automatically create replenishment signals (e.g., POs) based on Min-Max levels and Kanban cards. POs can be pre-approved and ready to be transacted.
Vendor Managed Inventory
Provide suppliers convenient inventory visibility and automate replenishments from suppliers.
Consignment Inventory
Maintain supplier-owned inventory, transfer ownership on use, and trigger supplier invoicing.
Outside Processing Drop Shipments
Integrate planning, work order, requisitioning, purchasing, and receiving. View shipment details, WIP details (job, schedule and operations), and component information. Enable suppliers to fulfill your customer orders by shipping directly to your customers. Synchronize PO with sales order and book transactions across multiple business entities.
Example: Basic and Complex Pricing Simplify Process While Improving Pricing Compliance Buyer Contracts Negotiated Pricing • Price breaks / lists • Ship-to / supplier site • Formulas • Modifiers
Supplier
• Negotiate optimal price structure to drive the best business results
Pricing Request
Requisitions
Advanced Pricing Engine Price Custom Pricing APIs
Purchase Orders
• Ensure that negotiated • Use retroactive pricing to pricing appears on every order
get negotiated price breaks for past and open orders
