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Best Practices in PeopleSoft Procurement
SRM PUG February 2008
Alexa Dhillon
PeopleSoft SRM Product Strategy Manager
alexandra.haytcher@oracle.com
Safe Harbor Statement
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.
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
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
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
Procurement Contracts
Manage Suppliers & Contracts
• Supplier Performance
Source
• Supplier Selections
• Negotiations and
Agreements
• Expirations & Renewals
Purchase
• Requisitions
• Approvals
• Purchase Orders
• Acknowledgments
Settle
• Receipts
• Procurement Cards
• Vouchers / Invoices
• Matching
• Payments
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
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
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
Procurement Contracts
Contract Process Options
Procurement Contract
Process Options:
Purchasing Contracts
Recurring Vouchers
Both
• Purchase Order
• Release to Single PO Only
• Recurring Voucher
• Recurring PO Voucher
• General
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
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 …
Procurement Contracts
Generating Releases from Contract to Purchase Order
Contract
Releases
Requisition
Planning
(Planned
Orders)
Other External
Sources
Contract PO
Process
PO Calc &
PO Create
Purchase
Orders
Procurement Contracts
Manually Referencing Contract on Requisition
Contract
Requisitions
with Contract
Planning
(Planned
Orders)
Other External
Sources
Requisition
Selection
PO Calc &
PO Create
Purchase
Orders
Procurement Contracts
PO Calc Looks for Available Contract if None Specified
Contract
Req without
Contract
Planning
(Planned
Orders)
Other external
Sources
Requisition
Selection
PO Calc &
PO Create
PO Stage
Process
Purchase
Orders
Procurement Contracts
Manually Associate Contract on Purchase Order
Select Contract on PO Line,
or Copy entire Contract
into PO
Contract
Purchase
Order
Purchase
Order
Purchase
Order
Purchasing Contracts
Process Flow
Consolidate
Demand
Requisition
Accrue / Relieve
Encumbrance
Conduct
Negotiation
Integrated Contracts Enforce
Negotiated Terms and
Operational Compliance
Purchase
Order
Contract /
Document /
SLAs
Analyze
and Award
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
Procurement Contracts
Recurring Voucher Releases
Create Vouchers on an as-needed basis
• Stage all releases up front, create vouchers as needed, or
• Stage and create vouchers as needed
Recurring Voucher
Releases
Voucher
Build
Vouchers
Voucher
Procurement Contracts
Recurring PO Voucher
• Encumber funds on Contract prior to Voucher Creation
• Applies to Voucher Contracts, and organizations using commitment
control
Contract
$12,000
Voucher
$4,000
Voucher
$4,000
Purchase Order
$12,000
Voucher
$4,000
Supplier Contract Management
What Is It?
Content Management
Contract Document
Authoring
Lifecycle
Management
Create and Enforce Better Supplier Contracts
Supplier Contracts : Monitoring & SLAs
Enforce Contract Compliance
Proactive Performance
Monitoring
Easily Track SLAs:
• Define On-Time Metrics
• Associate to contract
• Update metric based on
receipts
• View Results In Contracts
Monitor
Automatic Spend
Threshold Notifications
Track Spend & Performance:
• % of quality receipts
• % Correct Receipt Qty
• % On-time deliveries
• % Total Ordered versus
Received
Procure-to-Pay for Goods & Services
• Monitor contracted
Service Level
Agreements with
suppliers and take
corrective actions
• Understand current
spend vs. contract ‘at-aglance’ and accelerate
or reduce spend
accordingly
Supplier Contracts
Request Document
Supplier
Contracts
Contract Request
Document
Procurement Cards
Manage Suppliers & Contracts
• Supplier Performance
Source
• Supplier Selections
• Negotiations and
Agreements
• Expirations & Renewals
Purchase
• Requisitions
• Approvals
• Purchase Orders
• Acknowledgments
Settle
• Receipts
• Procurement Cards
• Vouchers / Invoices
• Matching
• Payments
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
Procurement Cards
Process Flow
Requisition with
Procurement Card
as Payment Method
Vendor Ghost Card
USBank & VISA InfoSpan
Statement Layout
Procurement Card
Stage Process
Misc. Statement
Layout
Inbound File
Publish Process
Load Statement Process
PO with
Procurement Card
as Payment Method
Statement Notification Process
Dispatch PO
Reconcile Transactions
Streamline Business
Process by
Automatically Matching
Incoming Bank
Statement with
Purchase Order
Voucher Stage Process
Voucher Build Process
Budget Check and Post
Procurement Cards
Ghost Card on Vendor
• Vendor Ghost Card can automatically be used as a
Payment Method on Requisitions and POs
Procurement Cards
Reconciling Statement
• View Transactions of all Users for which Role
has Authority
eProcurement
Approvals
Procurement Analytic Tools
• Supplier Performance
Source
• Supplier Selections
• Negotiations and
Agreements
• Expirations & Renewals
Purchase
• Requisitions
• Approvals
• Purchase Orders
• Acknowledgments
Settle
• Receipts
• Procurement Cards
• Vouchers / Invoices
• Matching
• Payments
Simplified Requisition Processing
Manage Requisitions – Release 8.9
Visibility into
Entire
Requisition
Lifecycle
Simplified Requisition Processing
Approving Requisitions Made Easier – Release 8.9
Expandable
Requisitions
Mass
Approvals
Simplified Requisition Processing
Email Approvals – Release 8.9
Approve Without Logging
into Application
Advanced Shipping Notice /
Evaluated Receipt Settlement
(Using eSupplier Connection)
Manage Suppliers & Contracts
• Supplier Performance
Source
• Supplier Selections
• Negotiations and
Agreements
• Expirations & Renewals
Purchase
• Requisitions
• Approvals
• Purchase Orders
Settle
• Receipts
• Procurement Cards
• Vouchers / Invoices
• Matching
• Payments
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
Advanced Shipping Notice / ERS
Process Flow
Buyer Side
PO Entry/Approval
Supplier Side
(eSupplier Connection)
PO Dispatch
View PO
Information
PO Acknowledged
Acknowledge PO
Receive by ASN
Ship & Record ASN
with Invoice ID
Voucher Build
Review Shipment
History
Voucher / Matching
Payment
Review Payment
eSupplier Connection
Supplier’s Dashboard
Visibility into
Transaction
History and
Supplier’s
Performance
eSupplier Connection
Advanced Shipping Notices
• Supplier
Creates ASN
On-Line
• Alternatively,
ASN loaded
through EDI
eSupplier Connection
Invoice and Payment Details
Suppliers View
Transaction
Details
On-Line
Frees Buyers to
Focus on Strategic
Activities
eSupplier Connection
Supplier Performance Metrics
• On time performance
• PO/Receipt Quantity
Performance
• Quality Performance
• Quantity
Performance
SRM Dashboard
Procurement Analytic Tools
• Supplier Performance
Source
• Supplier Selections
• Negotiations and
Agreements
• Expirations & Renewals
Purchase
• Requisitions
• Approvals
• Purchase Orders
• Acknowledgments
Settle
• Receipts
• Procurement Cards
• Vouchers / Invoices
• Matching
• Payments
Supplier Relationship Management
Insight-Driven Business Processes
Business
Insight
SRM Dashboard
• Expanded KPIs for buyers and managers
• Summary metrics at business unit level
• Supplier performance analytics pagelet
Collection of pagelets and metrics presenting
aggregated view of source-to-settle business process
for Buyers and Managers
SRM Dashboard
Pagelets and Metrics in Release 8.9
Activity Monitor Displays Buyer’s Current
Task List
SRM Dashboard
Pagelets and Metrics in Release 9.0
Mouse over bar
indicates amount
and total number of
schedules for period
98% for period 7/06, Total
Schedule Lines: 12
SRM Dashboard
Spend by Business Unit
Total Spend
by BU
SRM Dashboard
Spend by Business Unit
Filter and View
Schedules
Drill into PO
Supplier Relationship Management
SRM Dashboard – Spend by Category
Category
Spend
Broken
Down by
Vendor
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
Source-to-Pay
Best Practices
• 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
Benefits
• 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