<Insert Picture Here>
Strategic Sourcing
Cynthia Pavana
SRM Product Strategy
Agenda
• Source to Settle Overview
• Strategic Sourcing Highlights
– Overview
– Total Cost Modeling
– Award Optimization
– Project Planning
– Event Line Import
– Integration with Supplier Contracts
• Evolution of Strategic Sourcing
• Features for the Future
• Additional Resources
<Insert Picture Here>
<Insert Picture Here>
Gartner Group
“Strategic sourcing applications
are providing the triggers for
cultural change, higher
productivity and, above all, return
on investment.”
Source to Settle Business Process
Sourcing At-a-Glance
Identify
Opportunities
Implement
Agreement
Approve
and Issue
Identify Suppliers,
Define Strategy
Buying
Professional
LOB
Stakeholder
Supply
Base
Define & Plan
Event
Analyze
and Award
Conduct
Event
Enterprise Release 9.0 Strategic Sourcing
Identify
Opportunities
& Suppliers
Define
Strategies &
Negotiations
Conduct
On-Line
Negotiations
Analyze
& Award
Approve
& Issue
Make Savings Stick
Source More of
Your Spend
Source for Lowest
Total Cost
Structured
Event Support
Cross-Functional
Collaboration
Rapid
Deployment
Change
Management
Knowledge
Capture / Re-use
Total Cost
Analysis
Create Immediate and
Long-Term Savings
Automated
Negotiations,
Bid Mgmt and
Award*
Enterprise
Integration
Real Time
Decision
Support
Integration
Contract
Management
Purchasing
Finance
Operations
Sourcing Knowledge Capture
Drive Optimal Results by Re-Using Best Practices
Bidding Rules
Supplier Lists
Sourcing Policy Rules
Sourcing Templates
BID Factors
Scoring Methods
Negotiation Event Style
Knowledge from
Past Sourcing
Events
New Sourcing Event
Total Cost Analysis Multiple Bids
Evaluate Tangible and Intangible Costs
European
Supplier
$16 vs.
$23*
North American
Supplier
$21 vs. $21*
Latin
American
Supplier
$14 vs. $26*
• Example:
• Supplier Bid
• System Added
Freight
Tariff
Risk
• Transformed Bid =
$14
$6
$4
$2
$26
*Bid vs. Transformed Bid
Asian
Supplier
$20 vs. $23*
• Capture Total Cost
- Tangible (e.g., freight)
- Intangible (e.g., switching costs)
• Quantify Supplier “Premiums”
- Cost of shorter lead times & warrantee
- View Impact of Sourcing Policy
• Evaluate Transformed Bids
- View Transformed or Un-Transformed
- Visible During Analysis and Award
Award Optimization
Perform Online “What If?” Analysis
Minimum 60%
to incumbent
supplier
$100k Annual
Maximum
Maximum of
5 Vendors
• Relaxed Sourcing Policy?
•Exceeded Planned Budget Constraints?
•Exceeded Tender Quantity?
•Accepted Lower Quality?
•Accepted Alternate Technology?
•Cherry Picked Offers?
Award Optimization
New Award
Recommendation
Multiple
Suppliers
Strategic Sourcing Project Plan
Identify Tasks and
Subtasks of complex
sourcing cycles
Establish Milestones
and Take Action To
Eliminate Bottlenecks
Identify and engage
sourcing stakeholders
Reuse “Favorites” Lists
of Approved Suppliers
Event Line Import – Event Summary
Event Line Import – Select File
Event Line Import – Event Lines to Copy
Integration to Supplier Contract Management
Drive Contract Compliance
• Convert event into
contract at award
Agreement
Management
• Monitor transactionalbased agreements
Auto-Source
Requisitions
• Enforce price & terms
with preferred supplier
Performance
Contract Award
Awards
• Include clauses from
centralized library
Contract
Authoring
• Link contract document
and transaction
eProcurement
Purchasing
Agreements
Event Creation
Supplier Contract
Management
Clauses
Strategic
Sourcing
Execute
Purchasing
• Collect and share
performance data
Master Data
Vendors
Buyers
Items
Accounts
Evolution of Enterprise Strategic Sourcing
Base Features…
• Web-based Sourcing Event
creation and Execution
• Forward and Reverse
Auctions
• Multi-attribute Rfx and
auction scoring
• Requisition Demand
Aggregation
• Purchasing integration for
award processing
• Online Supplier Registration
New in 8.8…
• Revamped UI
• Multi-round sourcing events
including offer/counter-offer
• Tiered pricing/volume
discounts
• Cross-business unit
requisition consolidation
• Supplier Self-Categorization
• XML/ MS Excel based
bidding
• Event versioning and
change control
• Msg boards and real-time
“chat” with Suppliers
• Streamlined RFI transaction
• BOM and Planning Order
integration
• Price Component Breakouts
• Integration to E1
New in 8.9 / 9.0…
• Optimization of sourcing
awards
• Cost Contribution Bid Factors
for Total Cost Model
• Policy and Constraint capture
and use in analysis
• Sourcing Plans for total lifecycle management
• Integrated Supplier Contract
Management module
• Allow excess award quantities
• Automated UOM conversions
• Quick-Highlight of delta in
supplier bids
• UDDI Integration for supplier
discovery
• Event Line Import
Beyond 9.0 for Enterprise Strategic Sourcing
Features being considered for the future…
• Line Groupings
•Ability to group items together on the buyer and suppler side for group price, etc.
• Multiple categories on Event for supplier selection
•To maximize the number of suppliers as potential bidders to an event, the buyer will have the ability
to select multiple categories on the event during supplier selections
• No Bid per Line
•Ability for suppliers to designate certain lines that they do not wish to bid on as “No Bid”
• Third Party Notification
•Provide integration between PeopleSoft Sourcing and Third Party Bid Notification Services
• Usability
•Improve usability in several areas of PeopleSoft Sourcing, such as, the Award and Analysis pages
Additional Resources
• For More Information about our Products
• http://www.oracle.com/products/
• For More Information about Education
• http://www.oracle.com/education/index.html
• For More Information about Support
• http://www.oracle.com/support/
• Oracle Product Documentation:
• http://www.oracle.com/technology/documentation/application
s.html