Information Age Applications

Information Age Applications
* This information is intended for information purposes and may not be incorporated into a contract.

Oracle Advanced Procurement 11i.10 Update The Integrated Suite that Dramatically Cuts all Supply Management Costs David Hope-Ross Senior Director, Procurement Applications Information Age Applications

Manage Contracts & Suppliers
Procurement At-a-Glance Manage Contracts & Suppliers Supplier Performance Expirations & Renewals Source Purchase Settle Supplier Selections Negotiations Requisitions Approvals & Orders Goods Receiving Payments

Procurement Organization
Business Challenges Increasing Savings Targets Same or greater % every year Resource constraints – “save more with less” Inflation, currency fluctuation Organizational Challenges Insufficient policy influence Decentralized Spend CFOs Discount Savings Procurement Organization Compliance Concerns Low visibility Contract leakage Regulatory pressures Competitive Pressures Outsourcing Faster new product introduction Global competition

Why Are Cost Savings Hard to Achieve
Why Are Cost Savings Hard to Achieve? Routine Tasks Hinder Strategic Activities Strategic Supply Optimization Spend Analysis Contract Negotiation High Value Monitor & Review Controls Internal Benchmark Delivery Project- Based Procurement Medium Answering Supplier Queries Helping Requesters Managing Content Creating Manual Orders Low

Goal: Achieve World Class Procurement Drive 60% Higher Savings on Procurement Investment
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 Shift investment in procurement to higher-value activities Reduce staff by swapping labor for technology Source: Hackett Group

Procurement Transformation
High Strategic Procurement Value Creation Collaborative Procurement Supply Optimization All Categories, All Processes Cost Procurement Touchless Buying Policy Enforcement Contract Negotiation Spend Management Strategic Value Tactical Buying Create Manual Orders Answer Supplier Queries Help Requesters Manage Content Low Low Maturity High

Historical Procurement Drivers Take Action To Cut Costs
Actions To Improve Margins Increase Revenue E.g. Faster Product Design Cut Costs E.g. Deny Purchase Requests

Closing The “Savings Gap” Drive and Sustain Improvements In ROIC
Return On Invested Capital Improves Improves Improves Cash Flow Improves Profit Capital Intensity (Invested Capital) Actions To Improve Margins Increase Revenue E.g. Faster Product Design Cut Costs E.g. Reduce Freight Cost & Claims Actions to Improve Asset Utilization Working Capital Related E.g. Capture Early Payment Discounts Capital Expenditure Related E.g Asset Recovery Programs © 2005 Greybeard Advisors LLC

What Customers are Achieving…
reduced MRO item costs by 20% sourced 50,000 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 $1.1M annually via integrated procurement saved over 25% on indirect goods purchases implemented internet procurement in only 60 days Thompson Travel Group

A Few More Customers… Thompson Travel Group

How Oracle Delivers

Oracle Advanced Procurement The Integrated Suite that Dramatically Cuts All Supply Mgmt Costs…
Demand Collection Indirect Goods Direct Materials Engineered Goods Services Approval Routing Touchless Buying Automated Payment Enforce Policy Compliance Budget-Based Procurement Contract Management Supplier Performance Reduce Spend on Goods and Services Category Management Online Sourcing Spend Analysis Streamline Procurement Processes Supplier Collaboration Settlement Orders Profile Management Supplier Network Logistics Supplier Portal

Oracle Advanced Procurement Enables You To…
Reduce Spend on Goods and Services Streamline Procurement Processes Enforce Policy Compliance

Packaged Spend Analysis Spot Savings Opportunities Immediately
Are we leveraging volume discounts from our suppliers Where is there contract leakage Which departments have the most unsourced spending Analyze Spend by… Item / Commodity Supplier Organization Buyer Geography Time Contract Monitor Pricing Trends & Commodity Performance Determine Contract Utilization COMMODITY S U P P L I E R ORGANIZATION Supplier Organization Commodity Ad Hoc

CPO or Director of Procurement
New in 11i.10: Commodity Analysis Right Information for the Right Person at the Right Time Determine spend & effectiveness of standing contracts Respond to pricing, volume, & performance fluctuations Respond to contract leakage with corrective actions Commodity Manager Full performance visibility across all procurement process Assess supplier quality, delivery and price performance Benchmark suppliers against norm for like categories Vendor Manager CPO or Director of Procurement Track behavior across the enterprise Track Procurement performance Full documentation of cost savings and cost avoidance

Automatic Implementation
Online Negotiation & Collaboration Increase Sourcing Efficiency and Effectiveness RFI / Survey RFQ Online Auction Blanket Agreements Global Agreements Signed Contracts Purchase Orders Sourcing Rules Agreement Creation Automatic Implementation Online negotiations Online ‘expert’ collaboration Award optimization (11i.10+) Templates, standard T’s & C’s Advanced pricing 1-click renegotiation for agreements Automatic price & terms enforcement Preferred supplier enforcement Exploit savings opportunities & use open competition to improve price/terms

New in 11i.10: Sourcing Optimization
Online bid analysis and scoring Award allocation rules Template-based contract authoring Cut sourcing cycle time while making better award decisions

New in 11i.10: Procurement Contracts Create And Enforce Better Contracts
Approve & Sign Execute Negotiate & Author Close-Out Renew Request Supplier Organization Key Functions Sales Legal Project Mgt Billing Top Mgmt Buying Procurement Project Mgmt Finance Standardize Contract Processes Reduce Time-to-Contract Drive Contract Compliance

Embedded Terms Enforcement Enforce Contracted Pricing and Terms
Sourcing Contracts iProcurement Purchasing Negotiate pricing and terms Author purchasing contracts Enforce contract deliverables Direct self-service orders to preferred suppliers at contracted pricing Create purchasing transactions at contracted pricing Automatically implement negotiated pricing and terms in every transaction

Embedded Terms Enforcement (cont’d) Enforce Contracted Pricing and Terms
Review Status of Deliverables Example Deliverables Monthly milestone progress reports Provide a prototype within 3 months of contract signing Perform site visit and inspection Proof of compliance to industry standards Deliverable status at a glance Compliance tracking during negotiation and after award Supplier and internal compliance monitoring

Complete Procure-to-Pay Automation Free Staff for High-Value Activities
Identify & Qualify Vendors Create & Approve Requisition Receive Electronic Invoice Sourcing Strategy Evaluate Bids Create Purchase Order Pay Supplier (EFT) Negotiate Master Purchase Agreement Send Electronic PO to Supplier Analyze Performance Purchasing Execution Select Vendor Receive Goods or Services; Inspect Adjust Contracts Add structure to strategic activities & execute routine transactions automatically

Central Sourcing, Local Execution Transfer to Local Business Unit
New in 11i.10: Multiple Procurement Models Select Model Appropriate for Each Spend Category BU 1 Source Request Buy Pay BU 2 BU 3 Decentralized BU 1 Source Request Buy Pay Shared Service BU 2 Central Sourcing, Local Execution BU 1 Source Request Buy Pay Shared Service BU 2 Automated financial reconciliation Complete Shared Services BU 1 Source Request Buy Pay Shared Service BU 2 Automated financial reconciliation Transfer to Local Business Unit

Policy-Driven Self-Service Requisitioning Automate and Control Employee Buying
Self-service ordering in a familiar web shopping interface Smart Forms to structure non-catalog orders Purchasing-controlled content for guided user choice (e.g., preferred vendors) Configurable approval flows with accounting enforcement Self-service order tracking and order changes Complete process automation

New in 11i.10: Services Procurement Enables Complete Control and Oversight for Services Spending
Maximize preferred supplier savings Eliminate over-billing and overruns Create visibility into services spending

Example: Employee-Initiated Changes
Change request approval Buyer review and PO update Automatic supplier notification Self-service order tracking Self-service order changes with Purchasing approval Self-service receiving triggers invoicing Change quantity, date, price or cancel line Eliminate routine order inquiries and change requests to Purchasing

Structured Supplier Communications Reduce Process Errors, Manual Effort, and Lag Time
Supplier Qualifications Buyer Suppliers Forecast & Schedules v.1 Orders v.2 Change Orders Shipment Notices Invoices & Payments Time Cards

Structured Supplier Communications (cont’d) Reduce Process Errors, Manual Effort, and Lag Time
Supplier Portal: Online Self-Service Messaging: Lights-Out Connectivity XML EDI Buyer Suppliers

Alerts & Notifications Access to Complete Procure to Pay Data
Structured Supplier Communications (cont’d) Reduce Process Errors, Manual Effort, and Lag Time Supplier Portal Quick Document Search Alerts & Notifications Zero training paradigm Global view with security Simple and advanced search Most Recent Orders Most Recent Shipments Access to Complete Procure to Pay Data

New in 11i.10: Expanded Enablement Options Increased Accuracy from Set-Up Through Receiving
Maintain Supplier Details and Bank Accounts Supplier Hierarchy Support Improved Upload and Attachment Support Quick Advanced Ship Notice Support License Plate Number Support Inbound Routing Request & Response Logistics Easily manage supplier accounts and track changes Expand the use of portal to suppliers with larger order volumes Use lowest cost transportation, increase status accuracy, and simplify receiving

Plug Into Oracle Supplier Network The on-line service that simplifies electronic messaging for Oracle Procurement customers and their suppliers. Identify High-Volume Trading Partners Register on Oracle SN and set messaging preferences Set up 11i XML Gateway – follow OSN quick start guide Execute end-to-end test cycles with suppliers Migrate Network settings – Go Live!

Exception-Based Enforcement Identify and Rectify Policy Violations
Purchasing Professional Configurable automation of routine transactions Automatic bubble-up of exceptions Pre-built, configurable approval flows Rejections Return or Modify Reqs Indirect & MRO Approvals Buyer-Assisted Exceptions Direct Materials Purchasing Transactions Services Automatic Demand Sources Demand Queue Rules Configuration Document Creation Designed Mat’ls Automation

Budget-Based Procurement Align Financial and Procurement Policies
Update with Spend Data Project Budget or Grant Project Demand Funds Available? Yes Payment -Invoices, Timecards Document Creation No Retuned or Modified Reqs Automatically update project budgets with spending data to ensure funds availability Seamless dataflow from Projects to Procurement to Payables

Total Procurement Visibility Manage Supplier Performance
Define Targets Perform Transactions Management by Objective Define key performance indicators Setup business performance targets Management by Exception Calculate KPIs and compare to plan Notify decision-maker of exceptions Management by Fact Analyze exceptions based on facts Take immediate corrective action Analyze & Take Corrective Action Measure Performance Out of Tolerance? Notify

Oracle Advanced Procurement
Integrated packaged spend analysis, online sourcing, and embedded pricing enforcement Reduce Spend on Goods and Services Full procure-to-pay automation with employee self-service and structured supplier communications Streamline Procurement Processes Budget-based procurement, exception-based enforcement and total spending visibility Enforce Policy Compliance

Oracle Advanced Procurement Delivered via a Modular Product Suite
Spend Analysis Strategic Sourcing Contract Mgmt Purchasing Intelligence Sourcing Procurement Contracts Employee Self Service Procure-to-Pay Supplier Enablement iProcurement Services Procurement Purchasing Accounts Payable iSupplier Portal Oracle Supplier Network

Evolution of Oracle Advanced Procurement
Base Differentiators… New in 11i.9… New in 11i.10… Self-service enterprise requisitioning from suppliers or internal stock Integrated asset and production planning Self-service supplier inquiries and transactions, (e.g. VMI and self-invoicing) Flexible invoice matching including match to receipt Automatic invoice and debit memo generation Project- and budgetary-based purchasing Multi-attribute scoring for reverse auctions and RFQs Open platform for demand, orders, receiving, invoices Integrated spend and supplier intelligence Workflow-driven automation Global agreements Supplier managed and consigned inventory Requester and supplier change requests Supplier registration and profile management Collaborative sourcing Requester “stores” for secure content zones Patent-pending transparent punch-out One-click renegotiation of blanket agreements Expanded XML support including cXML for easing Ariba migrations Time-phased pricing for direct materials Commodity intelligence Services procurement – 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 & what-if analyses, Auto-award recommendations Shared services procurement Requisition “SmartForms” Requisition lifecycle tracking with shipment track & trace LPN & lot/serial receiving Supplier managed banking 6

11i. 10: The Most Important Release -- Ever
11i.10: The Most Important Release -- Ever! The Procurement Compliance Release Intelligence (Procurement) Commodity Analysis 238 KPI’s, 395 Reports Procurement Performance Mgmt Sourcing Subjective Scoring Surrogate Bidding Lot-based & Transformation Bidding eSender Certification Award Optimization Procurement Contracts Contract Terms Library & Templates Contract Authoring & Negotiation Contract Printing and Communication Contract Deliverables and Compliance Contract Change Management Contract Document Repository iProcurement Lifecycle Tracking Central Approvals Personalization New UI Services Procurement New Service Line Types Shared Svc, Contingent Labor, and Business Svc Negotiation thru Payment Preferred Supplier Mgmt Smart Forms Resource Management Time & Expense Tracking Invoice and Payment iSupplier Portal Maintain Bank Accounts Quick ASN Creation Inbound Logistics Purchasing and Payables Center-led Procurement Retroactive Pricing Advanced Pricing Integration Multi-stage ROI, nested LPN, lot/serial support Integration to Oracle Transportation PDF Print PO ( , FAX) Supplier Network Network Model for Messages Real-Time Transformation & Routing Robust Exception Management Pre-Certified Community of Suppliers Already a proven success!

The following is intended to outline our general product direction
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.

Development Priorities
Supplier Enablement and Self-Service Spend Analysis Transaction Streamlining Ease of Use and User Interface Compliance Management Supplier Management Business Insight

R12 Major Procurement Initiatives
Professional Buyer’s Work Center Support for Complex Contract Payments Improved Catalog Management and Security Enhanced Approval Management Supplier Catalog Authoring Self-Service Supplier Qualification and Profile Management Supplier Scorecarding UI Improvements and Transaction Streamlining

Summary Questions?

Rethinking the Routine
Strategic Supply Optimization Spend Analysis Contract Negotiation High Value Monitor & Review Controls Internal Benchmark Delivery Project- Based Procurement Medium Answering Supplier Queries Helping Requesters Managing Content Creating Manual Orders Low Staff Consumption

Rethinking the Routine Automate Routine Tasks, Focus on High-Value Activities
Strategic Oracle Advanced Procurement Supply Optimization Spend Analysis Contract Negotiation High Value Monitor & Review Controls Internal Benchmark Delivery Project- Based Procurement Medium Answering Supplier Queries Helping Requesters Managing Content Creating Manual Orders Low Staff Consumption

Oracle Advanced Procurement

* This information is intended for information purposes and may not be incorporated into a contract.

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