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

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Leveraging Best Practices Across ProcurementBenefits of Integration to Your Organization:Reduce Spend on Goods and ServicesGreatly reduced processing costsLess Time on Non-Value Add ActivitiesStronger internal controlsBetter visibility into the entire processBetter communication across parties to optimize decisions and strategies

Procurement Best Practices Getting a Return on Your InvestmentCompliance Enforce Negotiated TermsLegal and OrganizationalDrive Contract Compliance

Streamline Processing Increase process effectiveness

Extend Procurement Automation to SuppliersFree Buyers and Payables Clerks to Focus on more Strategic Activities

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

Procurement Best Practices Getting a Return on Your InvestmentCompliance Procurement and Supplier Contracts

Streamline Processing Procurement CardseProcurement Approvals

Extend Procurement Automation to SupplierseSupplier Connection and Evaluated Receipt Settlement

Greater Business Insight / Analytics SRM Dashboard

Procurement Contracts

Supplier ContractProcurement Contracts vs. Supplier ContractsProcurement ContractsPart of Core PurchasingFocuses on execution of contractCaptured key information to support executionDoes not have true legal contract document will all terms and conditionsAvailable for all releasesSupplier ContractsSeparate ModuleIntegrates with Core PurchasingFocuses on Document side of Contract with MS Word IntegrationHas structured clause library, rules-based authoring, approval workflow, etc.SLA and Deliverables Management for contract complianceSupports powerful contract searchingStarting in Release 8.9

Procurement Contracts Best Practices for Purchasing ContractsAutomate sourcing and releases buyers from routine work Enforce Contract UsageEnsure 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 StartedSet UpContract Set ControlsUser PreferencesItem / Vendor Relationship

ContractCreate ContractGenerate Document (Supplier Contracts)ApproveGenerate ReleasesNotificationsReview Contract Events, Analytics, SLAs

Purchasing ContractsRecurring VouchersBoth 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 ContractsUse Purchase Order Contract whenYou want separate purchase orders for each of your contract releasesYou want to be able to close your POs once your order is received and paid

Use Single PO Contract whenYou or your supplier would like the convenience of tracking, receiving, and vouchering against one POYou are using PeopleSoft Release 8 SP2 or higher

Procurement ContractsPurchasing ContractsMaster Contract Association Track and Inquire across multiple contractsOpen Item Reference Eliminates need to define individual items on a contactCorporate vs. Non-Corporate Contract Lower maintenance by sharing contracts across multiple business unitsPrice Adjustments Permits volume discountsAutomatic Association of Contract onto PO Ensure contract complianceInquiries and ReportsDashboards and Analytics View trends, usage, and opportunitiesMilestones, Notifications, Minimum and Maximum Edits

Procurement ContractsGenerating Releases from Contract to Purchase Order

ContractPlanning(Planned Orders)ReleasesContract PO ProcessPO Calc & PO CreatePurchase OrdersRequisitionOther External Sources

Procurement ContractsManually Referencing Contract on Requisition

Procurement ContractsPO Calc Looks for Available Contract if None Specified

Procurement ContractsManually Associate Contract on Purchase Order

ContractPurchase OrderPurchase OrderPurchase OrderSelect Contract on PO Line, or Copy entire Contract into PO

Purchasing ContractsProcess FlowConduct NegotiationAnalyze and AwardRequisitionContract / Document / SLAsConsolidate DemandAccrue / Relieve EncumbrancePurchase Order Integrated Contracts Enforce Negotiated Terms and Operational Compliance

Procurement Contracts Recurring Voucher Best Practices Scheduling Vouchers for Repetitive Payments Automatic Invoice Number GenerationRetention Ensure project completion before paying full amountMaster Contract Association, Miscellaneous Charges, Milestones Tracking and Reporting

Procurement ContractsRecurring Voucher ReleasesRecurring VoucherReleasesVoucher BuildVoucherVouchersCreate Vouchers on an as-needed basisStage all releases up front, create vouchers as needed, orStage and create vouchers as needed

Procurement ContractsRecurring PO VoucherContract$12,000Purchase Order $12,000Voucher $4,000Voucher $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 ContractsContract Document AuthoringContent ManagementLifecycle Management

Supplier Contracts : Monitoring & SLAsEnforce Contract Compliance Automatic Spend Threshold NotificationsProactive Performance MonitoringTrack Spend & Performance:Easily Track SLAs:% of quality receipts% Correct Receipt Qty% On-time deliveries% Total Ordered versus Received Define On-Time Metrics Associate to contractUpdate metric based on receiptsView Results In Contracts MonitorMonitor 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

Procurement Cards

Procurement CardsBest PracticesReduce the cost associated with vendor set up, processing invoices/payments to vendorsEfficient management of cash flowIncrease Rebate PotentialImprove Controls (Policies and Procedures, Spend monitoring)Automate ReconciliationFaster Payment to VendorsGlobal Acceptance

Procurement CardsProcess Flow

Procurement Cards Proxies Enhanced Security and Mass MaintenanceEach card can have a unique set of proxy usersEach proxy user is assigned a Procurement Card RoleMass Assign Proxy enables management of proxies for multiple cards

Procurement CardsGhost Card on VendorVendor 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

eProcurement Approvals

Simplified Requisition ProcessingManage Requisitions Release 8.9Visibility into Entire Requisition Lifecycle

Simplified Requisition ProcessingApproving Requisitions Made Easier Release 8.9

Simplified Requisition ProcessingEmail Approvals Release 8.9 Approve Without Logging into Application

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

Advanced Shipping Notice / Evaluated Receipt SettlementBest PracticesStreamline 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 FlowPO Entry/ApprovalPO DispatchReceive by ASNView PO Information Ship & Record ASN with Invoice IDBuyer SideSupplier Side (eSupplier Connection)Review Shipment HistoryPO AcknowledgedAcknowledge POVoucher BuildVoucher / MatchingPaymentReview Payment

eSupplier ConnectionSuppliers Dashboard Visibility into Transaction History and Suppliers Performance

eSupplier ConnectionAdvanced Shipping NoticesSupplier Creates ASN On-LineAlternatively, ASN loaded through EDI

eSupplier ConnectionInvoice and Payment DetailsSuppliers View Transaction Details On-LineFrees Buyers to Focus on Strategic Activities

eSupplier ConnectionSupplier Performance MetricsOn time performance

PO/Receipt Quantity Performance

Quality Performance

Quantity Performance

SRM Dashboard

Supplier Relationship ManagementInsight-Driven Business ProcessesBusinessInsightExpanded KPIs for buyers and managersSummary metrics at business unit levelSupplier performance analytics pageletSRM DashboardCollection of pagelets and metrics presenting aggregated view of source-to-settle business process for Buyers and Managers

SRM DashboardPagelets and Metrics in Release 8.9Activity Monitor Displays Buyers Current Task List

SRM Dashboard Pagelets and Metrics in Release 9.098% for period 7/06, Total Schedule Lines: 12

SRM DashboardSpend by Business UnitTotal Spend by BU

SRM DashboardSpend by Business UnitFilter and View SchedulesDrill into PO

Supplier Relationship ManagementSRM Dashboard Spend by CategoryCategory Spend Broken Down by Vendor

Procurement Best Practices Getting a Return on Your InvestmentCompliance Procurement and Supplier Contracts

Streamline Processing Procurement CardseProcurement Approvals

Extend Procurement Automation to SupplierseSupplier Connection and Evaluated Receipt Settlement

Greater Business Insight / Analytics SRM Dashboard

Source-to-PayBest Practices BenefitsSimplificationEliminate paperReduce manual entry and errorsStandardizationValidation of master and transaction dataAutomationMatching, payment and dispute resolutionManage and control enterprise spendConsolidationShared servicesSupplier collaborationStrategic alignment of finance activities with overall corporate goals

Gain visibility and control over spendingFocus on strategic activitiesImprove internal policy complianceBetter visibility into the entire processBetter communication across parties to optimize decisions and strategiesLeverage supplier base

Reduce Spend ContractsReduce Processing Costs PCards, ASN/ERS - streamlineImproved Cash Management Procurement CardsStronger Internal Controls Contracts, MatchingBetter Visibility Contracts, eSettlements life cycleBetter Communication eSettlements using dispute settlements

Need to get file from bank, they need to be able to support the format.

PCard information communicated with vendorVendor passes PO information onto card issuing bankBank passes PO information to customer in PCard bank statementStatement Load loading process attempts to use PO ID, along with transaction date and dollar amount, to try and match transaction with PO information

Two notifications: Bank statement workflow and Grace Period Expired Workflow

Procurement Cards on Requisitions and Purchase OrdersTo reduce the overhead costs associated with processing invoices and paymentsto suppliers companies are increasingly turning to procurement cards as apreferred payment method. To assist customers in streamlining theirprocurement and payables business process, Purchasing 8.9 enables users tospecify Procurement Cards as a payment method on their requisitions andpurchase orders. The users have an option of using their departmental cards or aghost card on their transactions with various secure options to transmit the cardnumbers to suppliers. With this information available, the system canautomatically match the incoming bank statements with purchase orders,accurately assigning costs to the right accounts. This enables companies toreduce their settlement costs with suppliers without sacrificing controls or accessto spend information.

To ease the administrative burden of procurement cards, mass maintenance features have beenadded to this release. Since an organization can have a large number of procurement card users,administration of the individual cards can become very time intensive. The Mass Assign Proxyenables the management of proxies for multiple cards reducing the amount of time needed toadminister and manage procurement cards. If, for example, a user that was an administrator formultiple cards leaves the company and is replaced by another, the existing set of cards can bemoved to the new administrator.

Change, delete, copy & move proxy rights for Cards

Transaction details for linePerforming key requisition processing tasks from the Manage Requisitions page accelerates and streamlines the requisition process, making users more efficient and effective

Youll see enhancements in a bit

Prior to 8.9, lifecycle on separate pageRevisit your approval rules and heirarchy before implementing automationSRM DashboardThe SRM Dashboard was introduced in Release 8.9, is a collection of pagelets and metrics presenting aggregated view of source-to-settle business process. It provides the ability to view Purchasing and eProcurement-related information in one centralized location. We have improved business insight in Release 9.0 through the expanded KPIs, which include the addition of the following metrics:For the Buyer Role: Total PO Spend, Percentage Contract Spend, Category Spend, and Supplier SpendFor the Manager Role: Requisition Approval Notification, Total PO Spend, Category Spend, and Supplier SpendBusiness Unit Level Summaries includes reporting information summarized for a user defined business unit, including the following metrics:Requisition Transaction Summary by MonthPurchase Order Transaction Summary by MonthReceipt Transactions Summary by MonthSupplier Performance Analytics allows for the inclusion of a pagelet containing supplier performance informationContract MgmtFollowing up on the initial launch of PeopleSoft Enterprise Supplier Contract Management in release 8.9, release 9.0 contains the following key enhancements:Request for Contract When creating a requisition, the requester can create a supplemental request that captures needed information pertaining to a contract request and any additional information in the supporting document. When you award the requisition to a contract, the contract specialist can reference the original request document and refer to the requesters responses within that request document to help drive the content and enter required data on the actual contract. The benefit of this process is that by the time the contracting specialist gets involved, the requestor has already been prompted for and provided all of the necessary information.SLA Compliance Sometimes contracts contain service level agreements or supplier performance clauses that specify measurable goals or expectations for the supplier. Examples include on-time commitments, shipment accuracy, and shipment quality. Previously, PeopleSoft could only list SLAs. PeopleSoft Enterprise Supplier Contract Management 9 enables you to define these targets as part of the contract agreement and contract deliverable structure and have the application proactively notify you concerning the suppliers performance. Evaluating the transactional data and then notifying the interested party if the supplier falls out of compliance, makes managing performance on an exception basis easier.Services ProcurementTime reporting -- Customers using PeopleSoft Enterprise Services Procurement 9 to manage resource-based contingent labor can now have Service Providers report time based on shifts, assignments, or both. A shift is essentially a specified period of time that groups of people work such as day shift, swing shift and graveyard shift. Assignments relate to the work being done or conditions of work. For example an assignments can be when a person is on-call and when they are called out. Service providers will be able to report standard time as well as shifts and assignments all in the same user interface.Expanded roles - Customers will now be able to define a Service Provider with the additional ability to manage the process as a Service Coordinator. By allowing a service provider to act as a services coordinator, PeopleSoft Enterprise Services Procurement 9 streamlines the management of these service providers and integrates them completely into the PeopleSoft Enterprise Services Procurement application. This provides a lower total cost of ownership, better rate compliance, enhanced performance analysis, and easier replacement of service providers.RequisitioningAmount-only reqs -- Before PeopleSoft Enterprise Purchasing 9, the requisition was quantity-based. Amount onlyrequisitions enable requesters to order goods and services specifying only a dollar amountand not quantity. PeopleSoft Enterprise Purchasing 9 extends support for amount onlyrequisitions, so requesters now can place an order, receive the order, and pay for an orderbased solely on the amount that is purchased.Off-catalog requests Item catalogs may not contain all items for which a requestor is searching. The Special Request feature enables users to request off-catalog items by providing item information tobuyers. Typically requesting an item using the Special Request feature is more time consuming than selecting an item from a catalog. If the same item were to be requisitioned repeatedly using the Special Request feature, the requisitioning process would be greatly streamlined for users requesting that common, off-catalog item if it were part of the catalog. Additionally, after the item is added to the catalog, better spend control will occur and the procurement organization may be able to negotiate contracts for this item. According to Hackett Group:Simplification of finance processAutomation of routine or repetitive tasksConsolidation of redundant resourcesStandardization of data and processesStrategic alignment of finance activities with overall corporate goals

Shared Services:Consolidation of redundant resourcesStandardization of data and processes

How:Centralized ERP ProcessingCOA ValidationAccounting plus inter/intra companyAllocationsStatutory Reporting

Industry Support & Best PracticeExpress CapitalizationConfigurable Matching (up to 4 way)Expense Analysis & ControlElectronic Invoice/Bill Presentment & Payment for Supplier and Customer collaborationCentralized Payment platform to improve yield on cash assets & improved working capitalContractsPCardERSSupplier CollaborationPOAsAnalyticsDuplicate Vendor CheckingMatching (4 way)

Gain visibility and control over spending which reduces spend on goods and servicesFocus on Stretegic activities because spending less time on non-value activities supplier collab

Other best practices:Electronic invoices (XML)Supplier self-serviceOnline approvalsOnline dispute resolutionEmail notifications Matching at header, linesTolerances functionality Exceptions workflowVirtual approverCentral payment factoryReal-time bank connectivityWorkflow