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Best practices for optimizing PeopleSoft procurement
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2. <Insert Picture Here>
Best Practices in PeopleSoft Procurement
SRM PUG February 2008
Alexa Dhillon
PeopleSoft SRM Product Strategy Manager
alexandra.haytcher@oracle.com
3. 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
4. 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
5. 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
6. 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
8. Supplier Contract
Procurement 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
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
10. Procurement Contracts
Tips 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
11. Purchasing Contracts
Recurring Vouchers
Both
• Purchase Order
• Release to Single PO Only
• Recurring Voucher
• Recurring PO Voucher
• General
Procurement Contract
Process Options:
Procurement Contracts
Contract Process Options
12. Procurement Contracts
Purchase 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
13. Procurement Contracts
Purchasing 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 …
14. Procurement Contracts
Generating Releases from Contract to Purchase Order
Contract
Planning
(Planned
Orders)
Releases
Contract PO
Process
PO Calc &
PO Create
Purchase
Orders
Requisition
Other External
Sources
15. Procurement Contracts
Manually Referencing Contract on Requisition
Contract
Planning
(Planned
Orders)
Requisition
Selection
PO Calc &
PO Create
Purchase
Orders
Requisitions
with Contract
Other External
Sources
16. Procurement Contracts
PO 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
17. Procurement Contracts
Manually Associate Contract on Purchase Order
Contract
Purchase
Order
Purchase
Order
Purchase
Order
Select Contract on PO Line,
or Copy entire Contract
into PO
19. 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
20. Procurement Contracts
Recurring 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
21. Procurement Contracts
Recurring 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
22. Supplier Contract Management
What Is It?
Create and Enforce Better Supplier Contracts
Contract Document
Authoring
Content Management
Lifecycle
Management
23. Supplier Contracts : Monitoring & SLAs
Enforce Contract Compliance
Automatic Spend
Threshold Notifications
Proactive
Performance
Monitoring
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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
27. Procurement Cards
Best 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
28. Procurement Cards
Process 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 TransactionsReconcile Transactions
Voucher Stage ProcessVoucher Stage Process
Voucher Build ProcessVoucher 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 CardVendor Ghost Card
PO with
Procurement Card
as Payment Method
PO with
Procurement Card
as Payment Method
Dispatch PODispatch PO
Streamline Business
Process by
Automatically Matching
Incoming Bank
Statement with
Purchase Order
29. Procurement Cards
Ghost Card on Vendor
• Vendor Ghost Card can automatically be used as a
Payment Method on Requisitions and POs
36. Advanced Shipping Notice /
Evaluated Receipt Settlement
Best 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
37. 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 Acknowledged
Acknowledge POAcknowledge PO
Voucher BuildVoucher Build
Voucher / MatchingVoucher / Matching
PaymentPayment Review PaymentReview Payment
43. Supplier Relationship Management
Insight-Driven Business Processes
Business
Insight • 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
45. 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
49. 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
50. Source-to-Pay
Best 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
Need to get file from bank, they need to be able to support the format.
PCard information communicated with vendor
Vendor passes PO information onto card issuing bank
Bank passes PO information to customer in PCard bank statement
Statement 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 Orders
To reduce the overhead costs associated with processing invoices and payments
to suppliers companies are increasingly turning to procurement cards as a
preferred payment method. To assist customers in streamlining their
procurement and payables business process, Purchasing 8.9 enables users to
specify Procurement Cards as a payment method on their requisitions and
purchase orders. The users have an option of using their departmental cards or a
ghost card on their transactions with various secure options to transmit the card
numbers to suppliers. With this information available, the system can
automatically match the incoming bank statements with purchase orders,
accurately assigning costs to the right accounts. This enables companies to
reduce their settlement costs with suppliers without sacrificing controls or access
to spend information.
To ease the administrative burden of procurement cards, mass maintenance features have been
added 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 Proxy
enables the management of proxies for multiple cards reducing the amount of time needed to
administer and manage procurement cards. If, for example, a user that was an administrator for
multiple cards leaves the company and is replaced by another, the existing set of cards can be
moved to the new administrator.
Change, delete, copy & move proxy rights for Cards
Transaction details for line
Performing key requisition processing tasks from the Manage Requisitions page accelerates and streamlines the requisition process, making users more efficient and effective
You’ll see enhancements in a bit
Prior to 8.9, lifecycle on separate page
Revisit your approval rules and heirarchy before implementing
automation
SRM Dashboard
The 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 KPI’s, which include the addition of the following metrics:
For the Buyer Role: Total PO Spend, Percentage Contract Spend, Category Spend, and Supplier Spend
For the Manager Role: Requisition Approval Notification, Total PO Spend, Category Spend, and Supplier Spend
Business Unit Level Summaries includes reporting information summarized for a user defined business unit, including the following metrics:
Requisition Transaction Summary by Month
Purchase Order Transaction Summary by Month
Receipt Transactions Summary by Month
Supplier Performance Analytics allows for the inclusion of a pagelet containing supplier performance information
Contract Mgmt
Following 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 supplier’s 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 Procurement
Time 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.
Requisitioning
Amount-only reqs -- Before PeopleSoft Enterprise Purchasing 9, the requisition was quantity-based. Amount only
requisitions enable requesters to order goods and services specifying only a dollar amount
and not quantity. PeopleSoft Enterprise Purchasing 9 extends support for amount only
requisitions, so requesters now can place an order, receive the order, and pay for an order
based 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 to
buyers. 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 process
Automation of routine or repetitive tasks
Consolidation of redundant resources
Standardization of data and processes
Strategic alignment of finance activities with overall corporate goals
Shared Services:
Consolidation of redundant resources
Standardization of data and processes
How:
Centralized ERP Processing
COA Validation
Accounting plus inter/intra company
Allocations
Statutory Reporting
Industry Support & Best Practice
Express Capitalization
Configurable Matching (up to 4 way)
Expense Analysis & Control
Electronic Invoice/Bill Presentment & Payment for Supplier and Customer collaboration
Centralized Payment platform to improve yield on cash assets & improved working capital
Contracts
PCard
ERS
Supplier Collaboration
POAs
Analytics
Duplicate Vendor Checking
Matching (4 way)
Gain visibility and control over spending – which reduces spend on goods and services
Focus on Stretegic activities because spending less time on non-value activities – supplier collab
Other best practices:
Electronic invoices (XML)
Supplier self-service
Online approvals
Online dispute resolution
Email notifications
Matching at header, lines
Tolerances functionality
Exceptions workflow
Virtual approver
Central payment factory
Real-time bank connectivity
Workflow