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Best Practices in PeopleSoft ProcurementSRM PUG February 2008Alexa DhillonPeopleSoft SRM Product Strategy Manageralexandra.haytcher@oracle.com

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.

Safe Harbor Statement

Leveraging Best Practices Across Procurement

• Benefits of Integration to Your Organization:• Reduce Spend on Goods and Services• Greatly reduced processing costs• Less Time on Non-Value Add Activities• Stronger internal controls• Better visibility into the entire process• Better communication across parties to optimize

decisions and strategies

Procurement Best Practices Getting a Return on Your Investment

• Compliance • Enforce Negotiated Terms• Legal and Organizational• Drive Contract Compliance

• Streamline Processing • Increase process effectiveness

• Extend Procurement Automation to Suppliers• Free Buyers and Payables Clerks to Focus on more Strategic Activities

• Greater Business Insight / Analytics • Gain deeper insight into spending• Enhanced, Configurable Reporting to Meet User Needs

Procurement Best Practices Getting a Return on Your Investment

• Compliance • Procurement and Supplier Contracts

• Streamline Processing • Procurement Cards• eProcurement Approvals

• Extend Procurement Automation to Suppliers• eSupplier Connection and Evaluated Receipt Settlement

• Greater Business Insight / Analytics • SRM Dashboard

Source Purchase Settle

• Supplier Selections

• Negotiations and Agreements

• Requisitions

• Approvals

• Purchase Orders

• Acknowledgments

• Receipts

• Procurement Cards

• Vouchers / Invoices

• Matching

• Payments

Manage Suppliers & ContractsManage Suppliers & Contracts

• Supplier Performance • Expirations & Renewals

Procurement Contracts

Supplier ContractProcurement Contracts vs. Supplier Contracts

• Procurement Contracts• Part of Core Purchasing• Focuses on execution of

contract• Captured key information

to support execution• Does not have true legal

contract document will all terms and conditions

• Available for all releases

• Supplier Contracts• Separate Module• Integrates with Core Purchasing• Focuses on Document side of

Contract with MS Word Integration• Has structured clause library,

rules-based authoring, approval workflow, etc.

• SLA and Deliverables Management for contract compliance

• Supports powerful contract searching

• Starting in Release 8.9

Procurement Contracts Best Practices for Purchasing Contracts

• Automate sourcing and releases buyers from routine work • Enforce Contract Usage• Ensure contract pricing and take advantage of volume

pricing • Use contract expiration and maximum amount notification • Generate fewer purchase orders • Track contract spend

Procurement ContractsTips for Getting Started

Set Up• Contract Set Controls• User Preferences• Item / Vendor

Relationship

Contract• Create Contract• Generate Document

(Supplier Contracts)• Approve• Generate Releases• Notifications• Review Contract Events,

Analytics, SLAs

Purchasing Contracts

Recurring Vouchers

Both

• Purchase Order

• Release to Single PO Only

• Recurring Voucher

• Recurring PO Voucher

• General

Procurement Contract Process Options:

Procurement ContractsContract Process Options

Procurement ContractsPurchase Order vs. Single PO Contracts

• Use Purchase Order Contract when• You want separate purchase orders for each of your contract

releases• You want to be able to close your POs once your order is received

and paid

• Use Single PO Contract when• You or your supplier would like the convenience of tracking,

receiving, and vouchering against one PO• You are using PeopleSoft Release 8 SP2 or higher

Procurement ContractsPurchasing Contracts

• Master Contract Association – Track and Inquire across multiple contracts

• Open Item Reference – Eliminates need to define individual items on a contact

• Corporate vs. Non-Corporate Contract – Lower maintenance by sharing contracts across multiple business units

• Price Adjustments – Permits volume discounts• Automatic Association of Contract onto PO – Ensure contract

compliance• Inquiries and Reports• Dashboards and Analytics – View trends, usage, and opportunities• Milestones, Notifications, Minimum and Maximum Edits …

Procurement ContractsGenerating Releases from Contract to Purchase Order

Contract

Planning(Planned Orders)

Releases

Contract PO Process

PO Calc & PO Create

Purchase Orders

Requisition

Other External Sources

Procurement ContractsManually Referencing Contract on Requisition

Contract

Planning(Planned Orders)

Requisition Selection

PO Calc & PO Create

Purchase Orders

Requisitions with Contract

Other External Sources

Procurement ContractsPO Calc Looks for Available Contract if None Specified

Contract

Planning (Planned Orders)

Requisition Selection

PO Calc & PO Create

Purchase Orders

Req without Contract

PO Stage Process

Other external Sources

Procurement ContractsManually Associate Contract on Purchase Order

ContractPurchase

Order

Purchase Order

Purchase Order

Select Contract on PO Line, or Copy entire Contract into PO

Purchasing ContractsProcess Flow

Conduct Negotiation

Analyze and Award

Requisition

Contract / Document /

SLAs

Consolidate Demand

Accrue / RelieveEncumbrance

Purchase Order

Integrated Contracts Enforce Negotiated Terms and

Operational Compliance

Procurement Contracts Recurring Voucher Best Practices

• Scheduling Vouchers for Repetitive Payments • Automatic Invoice Number Generation• Retention – Ensure project completion before paying full

amount• Master Contract Association, Miscellaneous Charges,

Milestones …• Tracking and Reporting

Procurement ContractsRecurring Voucher Releases

Recurring Voucher Releases Voucher Build

VoucherVouchers

Create Vouchers on an as-needed basis• Stage all releases up front, create vouchers as needed, or• Stage and create vouchers as needed

Procurement ContractsRecurring PO Voucher

Contract$12,000

Purchase Order $12,000

Voucher $4,000

Voucher $4,000

Voucher $4,000

• Encumber funds on Contract prior to Voucher Creation

• Applies to Voucher Contracts, and organizations using commitment control

Supplier Contract ManagementWhat Is It?

Create and Enforce Better Supplier Contracts

Contract Document Authoring

Content ManagementLifecycle

Management

Supplier Contracts : Monitoring & SLAsEnforce Contract Compliance

Automatic Spend Threshold Notifications

Proactive Performance Monitoring

All policy deviations are reported to approvers alongside clause deviations in the Contract Deviations Report, guiding approvers to exceptions in the contract along with the standard values.

Track Spend & Performance:Easily Track SLAs:• % of quality receipts

• % Correct Receipt Qty

• % On-time deliveries

• % Total Ordered versus Received

• Define On-Time Metrics

• Associate to contract

• Update metric based on receipts

• View Results In Contracts Monitor

• Monitor contracted

Service Level

Agreements with

suppliers and take

corrective actions

• Understand current

spend vs. contract ‘at-a-

glance’ and accelerate

or reduce spend

accordingly

Procure-to-Pay for Goods & Services

Supplier ContractsRequest Document

Supplier ContractsContract Request Document

Source Purchase Settle

• Supplier Selections

• Negotiations and Agreements

• Requisitions

• Approvals

• Purchase Orders

• Acknowledgments

• Receipts

• Procurement Cards

• Vouchers / Invoices

• Matching

• Payments

Manage Suppliers & ContractsManage Suppliers & Contracts

• Supplier Performance • Expirations & Renewals

Procurement Cards

Procurement CardsBest Practices

• Reduce the cost associated with vendor set up, processing invoices/payments to vendors

• Efficient management of cash flow• Increase Rebate Potential• Improve Controls (Policies and Procedures, Spend

monitoring)• Automate Reconciliation• Faster Payment to Vendors• Global Acceptance

Procurement CardsProcess Flow

USBank & VISA InfoSpan

Statement Layout

USBank & VISA InfoSpan

Statement Layout Misc. Statement Layout

Misc. Statement Layout

Procurement Card Stage Process

Procurement Card Stage Process

Inbound File Publish Process

Inbound File Publish Process

Load Statement ProcessLoad Statement Process

Statement Notification ProcessStatement Notification Process

Reconcile Transactions Reconcile Transactions

Voucher Stage Process Voucher Stage Process

Voucher Build Process Voucher Build Process

Budget Check and PostBudget Check and Post

Requisition with Procurement Card

as Payment Method

Requisition with Procurement Card

as Payment Method

Vendor Ghost Card Vendor Ghost Card

PO with Procurement Card

as Payment Method

PO with Procurement Card

as Payment Method

Dispatch PO Dispatch PO

Streamline Business Process by

Automatically Matching Incoming Bank Statement with Purchase Order

Procurement CardsGhost Card on Vendor

• Vendor Ghost Card can automatically be used as a Payment Method on Requisitions and POs

Procurement CardsReconciling Statement

• View Transactions of all Users for which Role has Authority

Source Purchase Settle

• Supplier Selections

• Negotiations and Agreements

• Requisitions

• Approvals

• Purchase Orders

• Acknowledgments

• Receipts

• Procurement Cards

• Vouchers / Invoices

• Matching

• Payments

Procurement Analytic ToolsProcurement Analytic Tools

• Supplier Performance • Expirations & Renewals

eProcurement Approvals

Simplified Requisition ProcessingManage Requisitions – Release 8.9

Visibility into Entire

Requisition Lifecycle

Simplified Requisition ProcessingApproving Requisitions Made Easier – Release 8.9

Mass Approvals

Expandable Requisitions

Simplified Requisition ProcessingEmail Approvals – Release 8.9

Approve Without Approve Without

Logging into Logging into

ApplicationApplication

Source Purchase Settle

• Supplier Selections

• Negotiations and Agreements

• Requisitions

• Approvals

• Purchase Orders

• Receipts

• Procurement Cards

• Vouchers / Invoices

• Matching

• Payments

Manage Suppliers & ContractsManage Suppliers & Contracts

• Supplier Performance • Expirations & Renewals

Advanced Shipping Notice / Evaluated Receipt Settlement (Using eSupplier Connection)

Advanced Shipping Notice / Evaluated Receipt SettlementBest Practices

• Streamline Receipt Creation Process by having your Vendors Send Advanced Shipping Notices (ASN)

• Generate Vouchers without Waiting for Vendor Invoice using Evaluated Receipt Settlement (ERS)

• Enables Touchless Receipt and Voucher Creation to reduce data entry time and errors

• Useful for vendors with whom you have a trusting relationship

Advanced Shipping Notice / ERS Process Flow

PO Entry/ApprovalPO Entry/Approval

PO DispatchPO Dispatch

Receive by ASNReceive by ASN

View PO Information

View PO Information

Ship & Record ASN with Invoice ID

Ship & Record ASN with Invoice ID

Buyer Side Supplier Side (eSupplier Connection)

Review Shipment History

Review Shipment History

PO AcknowledgedPO AcknowledgedAcknowledge POAcknowledge PO

Voucher BuildVoucher Build

Voucher / MatchingVoucher / Matching

PaymentPayment Review PaymentReview Payment

eSupplier ConnectionSupplier’s Dashboard

Visibility into Transaction History and Supplier’s

Performance

eSupplier ConnectionAdvanced Shipping Notices

• Supplier Creates ASN On-Line

• Alternatively, ASN loaded through EDI

eSupplier ConnectionInvoice and Payment Details

Suppliers View Transaction Details On-Line

Frees Buyers to Focus on Strategic

Activities

eSupplier ConnectionSupplier Performance Metrics

• On time performance

• PO/Receipt Quantity Performance

• Quality Performance

• Quantity Performance

Source Purchase Settle

• Supplier Selections

• Negotiations and Agreements

• Requisitions

• Approvals

• Purchase Orders

• Acknowledgments

• Receipts

• Procurement Cards

• Vouchers / Invoices

• Matching

• Payments

Procurement Analytic ToolsProcurement Analytic Tools

• Supplier Performance • Expirations & Renewals

SRM Dashboard

Supplier Relationship ManagementInsight-Driven Business Processes

BusinessInsight

• Expanded KPIs for buyers and managers• Summary metrics at business unit level• Supplier performance analytics pagelet

SRM Dashboard

Collection of pagelets and metrics presenting aggregated view of source-to-settle business process

for Buyers and Managers

SRM DashboardPagelets and Metrics in Release 8.9

Activity Monitor Displays Buyer’s Current Task List

SRM Dashboard Pagelets and Metrics in Release 9.0

98% for period 7/06, Total Schedule Lines: 12

Mouse over bar indicates amount and total number of schedules for period

SRM DashboardSpend by Business Unit

Total Spend by BU

SRM DashboardSpend by Business Unit

Filter and View Schedules

Drill into PO

Supplier Relationship ManagementSRM Dashboard – Spend by Category

Category Spend Broken Down by Vendor

Procurement Best Practices Getting a Return on Your Investment

• Compliance • Procurement and Supplier Contracts

• Streamline Processing • Procurement Cards• eProcurement Approvals

• Extend Procurement Automation to Suppliers• eSupplier Connection and Evaluated Receipt Settlement

• Greater Business Insight / Analytics • SRM Dashboard

Source-to-PayBest Practices Benefits

• Simplification• Eliminate paper• Reduce manual entry and errors

• Standardization• Validation of master and transaction

data• Automation

• Matching, payment and dispute resolution

• Manage and control enterprise spend• Consolidation

• Shared services• Supplier collaboration

• Strategic alignment of finance activities with overall corporate goals

• Gain visibility and control over spending

• Focus on strategic activities• Improve internal policy

compliance• Better visibility into the entire

process• Better communication across

parties to optimize decisions and strategies

• Leverage supplier base