Procurement organizations are always challenged to help the business keep costs under control. To do this they need to expand their influence across the business to ensure that employees are buying from approved suppliers and ensure customer satisfaction. They also need to keep up with increasing volumes without adding headcount. That means procurement must become more efficient
Procurement organizations report that many critical factors are not even being addressed by procurement. Such as addressable spend—purchases by employees that could have resulted in savings had there been a vendor under contract. And even when they do, as we said before, contract leakage still occurs when purchases are made that don’t comply with negotiated contract terms. Overall, their processes are highly inefficient and make poor use of automation. Probably the worst situation is when spend isn’t linked to a purchase order. This could be a case of an employee “going around” the approved procurement process. However, it causes tremendous aggravation later when the vendor invoice shows up in Accounts Payable and there’s no purchase order to reconcile against. It forces the AP person to try to track down who made the purchase and do other research to validate that the invoice is indeed legitimate.
On the strategic side, the business wants CPOs to play an active role in managing supplier risk. This is where the changing dynamics are most acutely felt. The perception of supply risk is rising. Yet only 50% of CPOs say they play an active role in managing risk in their organizations. When you look at their relatively low influence levels, this is not surprising. However, many CPOs are starting to invest in the upfront process of supplier appraisal and qualification and increasing investments in contract management systems to formalize the agreements and compliance. Ryan will talk about other measures they can take after suppliers are on board in his segment
What we see is a shifting role for procurement. There is a move away from P2P transactional procurement, to higher level activities such as supplier selection and managing risk. Business growth due to available capital is driving the executive’s agenda. This means greater demands on procurement but they won’t get the headcount increases they need. These range from missed cost savings to inconsistencies across the negotiation, contracting and risk management processes that prevent them from leveraging best practices and standard contract terms across all vendors. Procurement also struggles to make sure the suppliers they do business with are properly qualified around attributes such as financial stability and business practices. However, what may be worse, they have difficulty leveraging negotiated contract terms into actual purchases. This so called “Contract leakage” results in higher costs. Becoming a better partner means working with the business to achieve their goals. 97% of procurement professionals say the CFO is their most important business partner and here is where they can shine. Better ideas on cost savings and helping prevent business disruption by partnering with the business to select, qualify and manage the best, most financially stable and compliant suppliers
Where procurement really begins to stand out as a valued business partner is when they become “ruthlessly efficient”. That means minimizing the time spent on transactional activities and focusing on the more strategic. The first step is making sure the the procure-to-pay cycle is automated and streamlined. Employee requisitions, automated approval workflows and PO issuance to vendors which helps increase efficiency and productivity. Vendor invoices are routed to AP where POs, invoices and goods receipts are automatically reconciled. The only manual touch is exception handling. This allows procurement leaders to focus on more strategic activities such as assessing and sourcing the best suppliers. Managing risk is becoming more and more critical and its incumbent on the procurement organization to properly assess potential suppliers and ensure their profiles are up to date. Procurement also needs to increase its influence in the business. Whether its influencing CFOs to focus on controlling costs through more rigorous sourcing and all employees channeling their requisitions to approved vendors using self-service procurement.
There is a way to address this problem. Only Oracle provides a solutions that gives procurement key capabilities to address these problems and at the same time improve their efficiency through collaboration and process standardization
Oracle delivers an integrated solution for the entire “Source-to-Pay” or as its sometimes referred to the “Source-to-Settle” cycle. Following the red arrows, the upfront “Manage Suppliers” is the initial qualification process of determining if suppliers conform to certain corporate risk mitigation policies such as financial viability, minority owned business standards and the like. This process flows all the way through the Sourcing function—that is selecting specific suppliers for certain goods and services at the best price and value, formalizing the agreement in a contract and them making sure the contract terms flow through the actual buying of goods and services. Finally, at the end, the vendor who supplied the goods submits an invoice—that invoice has to be validated by Accounts Payable to determine if the goods were received and the invoice terms match the purchasing documents. When completed, they are submitted to a queue for payment
SLIDE TRANSITION: Let’s look more closely at why only Oracle delivers a tier one ERP Procurement in the cloud.
When we talk to customers these are the differentiators against our competitors that our customers care about
From a solution perspective we’ll explore complete, global, insight driven, and digital
And from a cloud perspective personalized, connected and secure
Only Oracle has a complete, end-to-end cloud source to settle solution. It completely automates the transactional procure-to-pay process and provides robust solutions for managing the strategic procurement functions of supplier management with a complete supplier qualification management solution, a robust sourcing solution that streamlines the negotiation process and utilizes powerful analytics to compare supplier bids and select the best one across multiple criteria. Finally, we provide a full contract management solution that also helps streamline the contract authoring process and provides a searchable repository and notifications when contracts are expiring
Industry leader provides shared wireless infrastructure to enable commercial wireless services for the New York City Transit Authority riders within the underground subway stations. Oracle Procurement Cloud –
Fusion Procurement Contracts
Fusion Purchasing
Fusion Self Service Procurement
Fusion Sourcing
Fusion Supplier Portal
Fusion Transactional Business Intelligence for Procurement
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CyraCom implemented the following Oracle Procurement Cloud products. They also use Oracle Financials Cloud which allows the to automate much of their vendor invoice processing.
Fusion Purchasing
Fusion Self Service Procurement
Fusion Procurement Contracts
Fusion Transactional Business Intelligence for Procurement
Global Focus
For many CFOs, emerging markets and new geographies comprise the next great business opportunity. Yet capitalizing effectively on these opportunities can be dauntingly complex. And so when we set about building the Oracle ERP Cloud, to grow with you. It has the most robust support for multiple subsidiaries and localizations for nearly 50 countries, with data centers in 19 countries to comply with data residency requirements.
This allows you to rapidly establish a new presence or expand existing operations in virtually any region without having to invest in getting the technical skills and equipment in place, substantially minimizing both your capital investments and your risk. Your new offices can operate and share information seamlessly with other business units and with HQ.
This is an approach that we at Oracle took ourselves, where we’ve been running our Indian subsidiary on ERP cloud since July 2013, while we work on transitioning from our core E-Business Suite to the cloud fully by 2017. Other customers like GE or Posco, which are multibillion conglomerates, are doing this too. Because they see it as a lifeline to get out of on-premises ERP in a safe way that mitigates risk to their core operations.
SLIDE TRANSITION: Oracle’s modern cloud empowers you and your employees to personalize your cloud application experience to maximize productivity and satisfaction.
You can easily change your cloud experience to fit your business and create new features and applications – that are maintained across updates.
You can tailor dashboards, configure screens, modify workflows, collaborate and capture every piece of data unique to your role. Even tailor reports on the fly.
Then if you need to go beyond the Oracle Cloud application you can Extend/Enrich it by creating new applications or extensions using standards-based development tools
Oracle Cloud Platform provides a standardized set of development tools that your IT team most likely already uses/knows today, all running on the Oracle technologies in the cloud
You can innovate much faster with less cost using Oracle’s standards based Cloud Platform
And any applications you develop are completely portable to other platforms
And, configuration changes are update safe
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SLIDE TRANSITION: Another key unique differentiator for Oracle is secure data isolation.
Each Oracle Cloud customer accesses their own database in a physically isolated environment while benefiting from the advantages of the Cloud, hardware resource pooling for unlimited performance and rapid elasticity for unexpected demand. Oracle uses Oracle components, all engineered to work together in a single Oracle technology stack.
This service delivery model offers 3 primary business benefits;
Risk Mitigation via better security by physically isolating your data from other customer data
Upgrade on your business calendar, not ours. You choose when you want to initiate your upgrade.
Reduced ‘noisy neighbor syndrome’. Because customers are in their own physically separate environments their batch processing such as payroll and financials processing period does not affect you. This can be a problem in traditional multi-tenant deployments.
SLIDE TRANSITION:
Nowhere else is that transformation more dramatic than in the world of ERP. Over the last 24 months, we’ve seen the world shift into a market that is taking advantage of what we do best.
Essentially that market shift has moved cloud adoption from departmental solutions like sales force automation or recruiting to mission critical applications like ERP in the cloud, and we’ve seen great progress – we now have over 1,600 customers of which over 450 are live represents 4x growth in last four quarters. We also continue to deliver rapid innovation with over 500 features in that last 2 releases, which speaks to the maturity of our solutions.