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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 Oracles
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

Al
po
icy
de
via
tio
ns
ar
re
or
ed
to
ap
pr
ve
s
alo
ng
sid
e
cla
us
de
via
tio
ns
in

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
Requisitionwith
with
Procurement
ProcurementCard
Card
as
Payment
Method
as Payment Method
Vendor
VendorGhost
GhostCard
Card

USBank
USBank&&VISA
VISAInfoSpan
InfoSpan
Statement
Layout
Statement Layout

Misc.
Misc.Statement
Statement
Layout
Layout

Procurement
ProcurementCard
Card
Stage
StageProcess
Process

Inbound
InboundFile
File
Publish
PublishProcess
Process

Load
LoadStatement
StatementProcess
Process

PO
POwith
with
Procurement
ProcurementCard
Card
as
Payment
Method
as Payment Method

Statement
StatementNotification
NotificationProcess
Process

Dispatch
DispatchPO
PO

Reconcile
ReconcileTransactions
Transactions

Streamline Business
Process by
Automatically Matching
Incoming Bank
Statement with
Purchase Order

Voucher
VoucherStage
StageProcess
Process
Voucher
VoucherBuild
BuildProcess
Process
Budget
BudgetCheck
Checkand
andPost
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
POEntry/Approval
Entry/Approval

Supplier Side
(eSupplier Connection)

PO
PODispatch
Dispatch

View
ViewPO
PO
Information
Information

PO
POAcknowledged
Acknowledged

Acknowledge
AcknowledgePO
PO

Receive
Receiveby
byASN
ASN

Ship
Ship&&Record
RecordASN
ASN
with
withInvoice
InvoiceID
ID

Voucher
VoucherBuild
Build
Voucher
Voucher/ /Matching
Matching
Payment
Payment

Review
ReviewShipment
Shipment
History
History

Review
ReviewPayment
Payment

eSupplier Connection
Suppliers Dashboard

Visibility into
Transaction
History and
Suppliers
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 Buyers 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