Automating the

Procure to Pay Process

“Garbage at the Speed of Light”
or
“Billion Dollar Company Syndrome”
Overview of Presentation

‹ Automating Processes
‹ Suppliers
‹ Items and Catalogs
‹ Requisitions/Quotations
‹ Purchase Orders/Contracts
‹ Receiving
‹ Inventory
‹ Processing Invoices
‹ Accounting
‹ Reporting

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Automating Business Processes
Procure to Pay Process
Sourcing
Develop
Identify Obtain Item Perform Perform Approved Supplier Monitor
Establish Sourcing Decide
Start Contract Information Spend Lists Quotation Lists and Performance
Contracts Awardee
Sources from Manf . Analysis Process Contracts
A
B

Operational
Budgets

Identify Purchase Locate Material Lists Establish Select Route for Review Approved
Requirement Procurement Generate Requisition
Start Product Designs and Supplier Requisition and Approval
Lists Requisition
Catalog Specifications Catalogs Templates of Request

Purchasing
Establish Establish and Generate Transmit Generate
Establish Perform Purchase Purchasing Approve Purchasing Purchasing
Update Existing
Start Procurement Quotation Documents Purchasing Documents Analysis
Prices/Disc. Contracts and Contract
Sources Process Documents
Agreements

Yes No D
B
A Maintain Item Inventory
Updated Purchasing
Created Blanket Create Purchase Control
Master Purchasing Correction
Release Order
Information Information Process
Project Cost Control

Accounts Payable Specs Yes

Complete Supplier
Supplier Request Supplier Matching Provides
Existing or Update Supplier Electronic Process
Form No Up-to and Approval Goods or
Duplicate Infromation Invoices Invoices
Date? Process Service
C
Yes
C Hold and
Payment
Create Update Supplier Variance Process Receiving
No Register
Supplier Site Information Process
Invoice Information

Treasury
Cash Flow Disbursement
Remit to Update Payment Create
Report Correct? Payment
Issue Register Cash
Information Information
Payment Management
Batch

Accounting

Commitment General Cost Budget

Budget Project Tax Reporting
Reports Fixed Asset Ledger Control
Information Accounting Accounting
Accounting Accounting
D

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Procurement Priorities

‹Strategic lever for bottom line improvement

‹Assess for insight and opportunities
‹Source for cost savings
‹Enable buyers and suppliers to turn contracts into
commerce
‹Transact though management tools in order to
capture savings, compliance and efficiency
‹Manage continuous improvement in order to
maximize procurement performance

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Automation Opportunities

‹Business Processes – Workflow, BPEL (10%)

‹Enterprise Service Bus/Web Services (30%)

‹Batch Processing and Interfaces (50%)

‹Automation Tools (100%)

z “Automate, Integrate and Accelerate”

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Tools for Automation

‹Business Process Management Suite (BPMS)

z Business Process Modeling (BPM)
z Business Activity Monitoring (BAM/BPA)
‹Enterprise Service Bus (ESB)
z Web services
z SQL Programs / Interfaces
‹Automation Tools
z Scheduling Tools
z Automation Tools

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Oracle Modules (Advanced Procurement)

‹ Sourcing – improves strategic sourcing

‹ iSupplier Portal – secure portal with supplier
‹ Supplier Network – electronic transaction service
‹ iProcurement – seamless ordering with web interface
‹ Purchasing – streamline processing along with compliance
‹ Approval Manager – enhanced approval process
‹ Procurement Contracts – creates and enforces contracts
‹ Service Procurement – control and oversight of services
‹ eCommerce Gateway – allows for electronic transfer
‹ Purchasing Intelligence – provides reports for compliance

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Suppliers and Employees
“Data Generation”
Supplier Management

‹Supplier Registration (iSupplier)

z Initial setup and contact updates
‹Eliminate Supplier Setup form by using BPEL to
execute process flow
z Provides immediate update process
‹Periodic updates using batch updates
‹Allow for immediate updates
‹Use of data hubs in Release 12 and TCA approach

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Business Process Execution Language

‹Automate data generation flow

‹Immediate updates vs. nightly batch
updates
‹Eliminate Supplier form for both additions
and updates
‹Update supplier information across multiple
systems
‹Notify relevant parties when completed
‹Build rules into process
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Data Hubs

‹Provides central data repository for master files

‹Provides for sharing consistent information
between applications
‹Designed to work with APIs
‹Part of Fusion Middleware
‹Currently for Customers and Items
‹Suppliers part of Release 12 – TCA model
‹Product Lifecycle Management

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Enhanced Supplier Management

‹Closer and enhanced relationship with suppliers

‹Viewed as integral part of supply chain
‹Enhanced sharing of information between entities
‹Sharing information more readily and electronically
‹Built in supplier contracts and long term
relationships
‹Maximized interaction with supplier
‹Electronic communication – iSupplier

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Items and Catalogs
Item Master/
Product Lifecycle Management

‹Maintaining item master is data maintenance

challenge and is ever increasing
‹Front end of purchasing process
‹Data hub especially with PLM, enhanced Item
Master process
‹Great application for the use of BPEL
‹Supply Chain focus on product lifecycle
z Extensive quoting and purchasing integration
‹Essential for most modules in procurement suite

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Sourcing

‹Enhanced procurement process

‹Usually part of enhanced supply chain
‹Seeded functionality and module in Oracle
‹Provides lists of items and preferred suppliers
‹Drives preferred supplier spending
‹Should be tied to procurement contracts
‹Automation opportunity for efficiency
‹Requires maintenance and attention

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Supplier Catalogs
‹Requires item strategy
‹Seeded functionality
‹Data from multiple sources
‹Can simplify item master process
‹Can be updated using EDI 832 (Catalog and Price)
‹XML becoming preferred method
‹Supplier maintained content
‹iProcurement Punch-out
‹Some organizations using supplier numbers only

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Requisitions and Quotations
“Data Integration”
Requisition Import

‹Significant automation feature

‹Imports requisition data from numerous sources
z Other modules, applications and data sources
‹Provides for single source of data
z Eliminates duplicate entry
‹Alternative to iProcurement
‹Provides validation and standard format
‹Remaining steps in process can be automated
and/or controlled as much as possible
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RFQ and Quotations

‹Historically limited functionality

‹Important to requisition process, especially in three
bid environment with regulatory requirements
‹Most companies using outside process, either
manual or development based
‹Can be interfaced with EDI
‹Can issue put through iSupplier
‹New enhancements with RFP, RFI, RFQ and
Quote
‹Automation from quote to BPO to catalogs

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Self Service Purchasing

‹iSupplier
‹iProcurement, Supplier Punch-out
‹iExpense, PCard integration
‹iPayment
‹XML Publisher
‹Budgets
z Commitments
z Purchasing Spend
‹Projects and HR integration
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iProcurement

‹Self service requisitioning, simple or complex

z Other alternatives available
‹Serves wide range of users
‹Finally viable as 11.5.10, Services Integration
‹Supplier motivated to assist with integration
‹Can be expensive based on licensing
‹Extensive personalization
‹Essential to driving automation
‹Key to getting data right (i.e. account generator)

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Purchase Orders/Contracts
Quotation Process

‹Requires management, extensive data entry

‹Significant source of data
‹Dependent on spend analysis
‹Beginning of contract and automation process
‹Links into RFI and RFQ process
‹Holds significant data for strategy and decisions
‹Can be electronically imported
‹Used in both standard and blanket processes

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Standard Purchase Orders

‹Most often used process, primarily manual

‹Can AutoCreate from requisitions but still requires
review
‹Manual requisitions often input at this point
‹Certain data fields can be updated through
automation
‹Often requires second approval process
‹Often requires many manual steps or workarounds
‹Requires extensive down stream processing

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Automatic Blanket Release

‹Greatest opportunity for automation

‹Requires extensive setup initially
z Tied to item number and pricing (Advanced Pricing)
‹Provides consistent downstream information
‹Automate the AutoCreate process
‹Will combine multiple requisitions
‹Does not require approval process but can
‹Needs additional automation checks

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Services Procurement

‹ Long been problematic for Oracle Purchasing

‹ Advanced Procurement Suite
z Oracle Services
z Oracle Procurement Contracts
z Interfaces with existing modules
‹Provides better system process
‹Enforce Contracted Pricing with Embedded Terms
and Conditions, Contract Authoring
‹Control and oversight for services spending

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Receiving
Self Service Receiving

‹ Limited automation opportunities

‹ Necessary requirement for control
‹ SOX misconceptions
‹ Performed in different ways
z iProcurement
z iSupplier/SAN
z EDI/ASN
‹ Impacts to matching and accrual processes
‹ Can be automated through receiving API

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Hand Held Receiving

‹Automation of receiving using symbol technology

‹Use programmable hand-helds
‹Perform more than one transactions
‹Use for multiple transaction sets
‹Use for multiple modules
z Inventory transactions
z Fixed Assets
z Physical Inventories
‹Have a backup plan

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Evaluated Receipt Settlement

‹Quick pay for only those items received

z “Pay on Receipt”
‹Supplier negotiated receiving process
z Requires trust and proper data exchange
z Designed for high volume
‹Tied to contracts
‹Supercedes the matching process
‹Requires minimal setup by supplier

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Inventory
Inventory Transactions

‹Hand Held Transactions (Eliminate manual)

z Inventory moves
z Issues and receipt
‹Automate multiple step processes
‹Execute replenishment programs
‹Master carton and RFID transactions
z Cross Docking

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Inventory Counting

‹Cycle Counting
‹Physical Inventories
‹Serialized Transactions
‹Locator Transactions
‹Spot Checks
‹Fixed Assets

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Processing Invoices
Invoice Import

‹Can be highly automated

z From scanning to straight through processing
z Dependent on suppliers capabilities
‹Extensively used for PCards and Expenses
‹Can be done as an EDI transaction – 810
z Best done after EDI PO transaction set – 850
‹Alternative ways for smaller vendors
‹Required by larger vendors
‹Can be controlled using invoice approval workflow

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Pay on Receipt

‹Quick pay based on receiving

‹Must be contractual
‹Associated with Advance Ship Notice
z EDI 865
z iSupplier
‹Well Established Process
‹Must have reconciliation process

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Invoice Approvals

‹Standard Practice
z Copies made and passed for signature (Non-POs)
‹Best Practice
z Accounts Payable receives all invoices, entered into
system
z Controlled within system
‹Invoice Approval Workflow
‹Approval Manager enhances the process
‹Time to process is the significant metric (>10 days)

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 Accounting
“Data Reporting”
Project Accounting

‹Material transactions to projects

z Drop ships
z Expenses
‹Requisitions capturing project information
‹Services contracts tied to project performance
‹Taxable versus non-taxable transactions
‹Use-tax
‹Extensive contracts tied to purchasing process

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Fixed Assets

‹Capitalized Transactions
z Receiving services and freight after the fact
‹Tied to asset accounting
z Account Generator
‹In and out of service
‹Asset move transactions
‹Asset inventories
‹Coupled with other asset applications

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Accrual Accounting

‹Most ignored process in the procure to pay cycle

‹Requires complete understanding of system
‹Requires defined process
z Receiving
z Month End
z Reconciliation
‹Often requires custom reports
‹Needs to be managed upstream
‹Often done outside system

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Month End Close

‹Great opportunity for automation

‹Requires synchronization between AP and PO
‹Need to check multiple parameters
z Period Close
z Pending Transactions
z Invoice Sweep
z Invoice Holds
‹Beginning of Close Process

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Reporting

‹Run Standard Set of Reports

‹XML Publisher
‹Budget Reporting (New Feature)
‹Discoverer reports
z Commitment reports
z Budget Reports
z Purchasing Spend
z Spend Analysis

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Action Plan

‹Map Business Process

‹Establish Priorities for automation
‹Decide on which protocol to use
‹Prepare implementation plan
‹Execute in a logical sequence
‹Don’t try to do it all
‹Make sure it works and obtains desired
results
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Questions and Answers

Thank you!
Paul Cyphers
[email protected]

www.solutionbeacon.com

Real Solutions for the Real World.®

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