Advanced Procurement

1. Advanced Procurement What’s New in E-Business Suite Release 12:The Procurement Professional’s Release Mary Burns

2. Professional Buyer Employees & Business Managers Suppliers & IT Departments Accounts Payable Sourcing Mgrs & Budget Holders HR & IT Data Analysts & Category Managers Legal and Contracts Managers Data Analysts & Project Managers Procure-to-Pay Supplier Enablement Services Procurement Contract Management Spend Data Management eProcurement eInvoicing Sourcing Analytics 1995 2000 2005 A Decade Of Procurement InnovationWhat’s Wrong With This Picture? As niche start-ups drove action “at the edges”, the tools needed for the daily business of procurement were taken for granted

3. Agenda • Procurement Challenges & Opportunities • How Oracle Delivers • A Look at Release 12

4. Oracle Advanced ProcurementThe Integrated Suite that Dramatically Cuts All Supply Mgmt Costs Reduce Spend on Goods and Services Spend Categories SupplierCollaboration SpendAnalysis CategoryManagement OnlineSourcing Orders Indirect Goods SupplierPortal Streamline Procurement Processes Logistics ApprovalRouting TouchlessBuying Automated Payment Services Settlement EngineeredGoods SupplierNetwork Budget-BasedProcurement ContractManagement SupplierPerformance ProfileManagement DirectMaterials Enforce Policy Compliance

5. Reduce Spend on Goods and ServicesIncrease Sourcing Efficiency and Effectiveness RFI /Survey BlanketAgreements PurchaseOrders GlobalAgreements Requisitions RFQ Signed Contracts OnlineAuction SourcingRules Automatic Implementation Agreement Creation • Online negotiations • Online ‘expert’ collaboration • Award optimization • Automatic price & terms enforcement • Preferred supplier enforcement • Templates, standard T’s & C’s • Two-way MS Word integration • 1-click renegotiation for agreements Exploit Savings Opportunities and use Open Competition to Improve Price / Terms

6. Transaction Execution Procure-to-Pay Automation Streamline Procurement ProcessesReduce Manual Effort toFree Staff for Higher-Value Activities Apply Auto-Source Rules Apply Agreement Terms & Conditions Create Purchase Order Dispatch Electronic PO to Supplier Auto-Approve Minor Changes Receive Goods or Services; Inspect Receive ElectronicInvoice Pay Supplier(EFT) Higher Value Activities (e.g., program management) Higher Value Activities (e.g., supplier development)

7. Enforce Policy ComplianceIdentify and Rectify Policy Violations • Configurable workflow & automation of routine transactions • Automatic bubble-up of exceptions • Single point for defining and enforcing purchasing policy Rejections PurchasingProfessional Return or Modify Reqs Indirect & MRO Approvals Exceptions Buyer-Assisted DirectMaterials Purchasing Transactions Services DemandSources Demand Queue RulesConfig. Document Creation Automatic Automation Designed Mat’ls

8. Release 12 -- Rethinking the Routine Automate Routine Tasks, Focus on High-Value Activities SupplyOptimization Oracle AdvancedProcurement Strategic ContractNegotiation SpendAnalysis High Value Monitor & ReviewControls Internal Benchmark Delivery Project- Based Procurement Medium Answering Supplier Queries HelpingRequesters Managing Content Creating Manual Orders Low

9. Advanced Procurement R12The Procurement Professional’s Release • Unified Workcenter For All Procurement Responsibilities • Improved Support for Complex Goods & Services • Expanded Supplier Management and Enablement

10. Professional Buyer’s Work CenterEnable Command & Control for the Procurement Professional Professional Buyer’s Work Center • Exceptions • Agreements • Performance Analysis Supplier Management Invoicing & Payment Contracts & Agreements PO Execution Negotiations Requisitions • View exceptions across multiple applications and operating units • Create, implement, and execute agreements • Analyze performance of procurement & suppliers Single Access Point for All Responsibilities

11. Professional Buyer’s Work Center (cont.)Enable Command & Control for the Procurement Professional • Intuitive UI and streamlined workflows • Status at-a-glance • Multi-Org Access Control for shared services • Extensive options for personalization

12. Two-Way MS Word SynchronizationAutomatically Import Redline Changes for Superior Compliance • Streamline internal collaboration and supplier negotiation by allowing key stakeholders to be involved in the contract review process • Improve contracting efficiency while reducing effort • Minimize errors and risk from manual updates Contract Administrator • Oracle Procurement Contracts • Identify modified clauses • Review changes in detail • Accept / reject offline changes XML edits XML edits Legal Stakeholders Supplier

13. Two-Way MS Word Synchronization (cont.)Automatically Import Redline Changes for Superior Compliance Accept or Reject offline changes Review each change in detail Identify modified clauses at a glance

14. Advanced Procurement R12The Procurement Professional’s Release • Unified Workcenter For All Procurement Responsibilities • Improved Support for Complex Goods & Services • Expanded Supplier Management and Enablement

15. Complex Requisition Approvals Graphically View Approval Chain & Requisition Status • Position Hierarchy Support • Define approval routing structures that remain stable even if individuals / organizational structures change • Minimize workflow maintenance Parallel Approvals • Notify multiple approvers of a requisition simultaneously • Reduce approval cycle time Support for Viewers • Keep people informed of business purchases and decisions without requiring a response • Maintain key stakeholder engagement & oversight

16. Technical Team • John = 90 • Mary = 85 • Sue = 80 Technical Capabilities (40% weight) Quote ABC Commercial Team Technical Capabilities Price Past Performance = 34 • Sue = 75 • Doug = 80 • Tina = 85 = 32 Price (40% weight) = 17 TOTAL SCORE:83 Quality Control Team • Alan = 90 • Mark = 80 Past Performance (20% weight) Team Scoring of Requirements • Each team member scores the assigned section • Oracle Sourcing calculates averageof individual score sheets to determine section score • Sum of team scores determines overall response score (as input to optimization)

17. Procurement for Complex ServicesSource to Settle Support for Complex Payments Supplier Collaboration Request for Service Negotiate Agreement Advances Receipts Invoice Payment Negotiate Payments: Make Payments: Validate: Match: Enforce: Examples: • Milestones • Rates • Advances • Retainage • Lump sums • Facilities services • Landscaping services • Architectural services • Track project details • Timecards • Receipts • Work confirmations • Agreements • Invoices • Receipts • Terms • Recoupment of advances • Release of retainage Drive Consistent Execution of NegotiatedTerms & Conditions in All Spend Categories

18. Procurement for Complex ServicesDefine Progress Payment Schedule Define progress payments - rate, lumpsum & milestone pay items • Suppliers provide timecards, receipts, and work confirmation information that are matched with agreements and invoices • Settlement drives release of recoupment of advances & retainage

19. Advanced Procurement R12The Procurement Professional’s Release • Unified Workcenter For All Procurement Responsibilities • Improved Support for Complex Goods & Services • Expanded Supplier Management and Enablement

20. Supplier Requests Supplier Registration Review & Approval Prospective Supplier Registration Reduce Overhead with Self-Service Registration • Configure qualification details captured during registration • Define req. elements of supplier profile • Include customized questionnaires* as part of registration • Use request details to customize approval flow • Enable approvers to update details • Notify suppliers via email once registration request has been approved / rejected • Use corporate website to allow interested prospective suppliers to register * Requires iSurvey

21. Supplier Management User-InterfaceStreamlined Supplier Profile Management To Do List for requests Create supplier Search or drill down to supplier details

22. Unified Catalog ArchitectureEstablish a Single Authoring, Ordering, & Maintenance Environment Sourcing User Add new items from award lines Buyer Catalog Admin Punchout & transparent punch-out Bulkload / online author & update content Catalog Supplier Approval workflows Requester Upload and maintain content Buyer View, approve, add, edit, and delete items Reduce Maintenance Efforts and Drive Spend Visibility

23. ü ü X A Suppliers ü ü ü B Content Zone 1 ü ü X C ü X Y Z X Categories Catalog ü X X A Suppliers ü X B Content Zone 2 ü X C X Y Z Categories Content Security with Content ZonesProvide the Right Content to the Right People Combine zones to create stores Grant access by OU or responsibility Partition content into zones Marketing Exec Promotional Items Professional buyer Industrial MRO Maintenance • Improve control over what end users can see & user buying experience • Execute organizational unit-specific procurement strategies • Reduce risks associated with sensitive categories

24. Within Requester’s tolerance? Within Buyer’s tolerance? PO changes within limits? Tolerance Based Auto-ApprovalsAutomate Processing of Routine Change Requests Touchless Processing Exception Processing Approver Supplier Change Orders / Requests Route to Requester’s hierarchy No Supplier Portal Yes Buyer No Route changes to Buyer OSN*/ XML / EDI Yes PO updated & submitted to approval workflow eMail Yes Purchasing Mgr No Route changes to buyer’s hierarchy PO Approved Fax

25. Self-Service Supplier ScorecardingDrive Improvements w/ Access to Supplier Performance Management Supplier management KPIs Spend analysis trend

26. 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 and what-if analyses • Automatic bid scoring and award (Sourcing Optimization) • Shared services procurement • Requisition “SmartForms” • LPN & lot/serial receiving • Supplier managed banking CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract

27. Evolution of Oracle Advanced Procurement New in R12… • PLUS… • Shared services support • Supplier catalog authoring • Advanced pricing integration • eTax integration • Document styles • Negotiation styles • Negotiation drafts • Automatic scoring of requirements • Supplier knockout criteria • Payment advances & recoupment • Progress payments based on milestones, rates, & lump sums • Professional Buyer’s WorkCenter • 2-way MS Word integration • Complex requisition approvals w/ requestor-directed procurement, parallel & position hierarchy approvals • Team scoring of sourcing rqmts • Procurement for complex svcs • Prospective supplier registration • Supplier mgmt user interface for supplier profile management • Unified catalog architecture • Content security w/ content zones • Tolerance based change order auto-approval • Self-service supplier scorecarding • Work confirmations • Retainage & authorization of release • PO lifecycle tracking • Non-PO invoices • Clause usage & compliance analysis • Supplier-managed user admin CONFIDENTIAL: All capabilities and dates are for planning purposes only and may not be used in any contract