Navigating Your Options to Connect Procurement to Oracle ERP Americas: +1 (888) 778 1402 EMEA: +44 (0) 2035 744 720 www.enrich.com
Executive Summary In today s marketplace, speed, efficiency and cost control drive competitive advantage and deliver significant business benefits. Time-consuming paper-driven purchasing and quotation cycles are costly. With the Oracle Procurement Solution, you can automate, simplify and improve the control of purchased goods and services to reduce processing time and costs. This solution also helps enhance the effectiveness of your relationships with key trading partners. This white paper will explain how the correct Oracle Procurement solution can meet or exceed the needs of your IT and Procurement groups, and offer insights that will allow you to squeeze the most value out of your technology. Page 2
Introduction Increasing revenue is a goal that is at the top of every leader s to-do list. But they aren t just looking at the sales engine anymore they re also looking to the procurement team to drive results. With the competition continually evolving and consumers looking for the best possible price, organizational growth and improved efficiency is a top priority. One way that companies are looking to come out ahead of their competitors and increase revenue is through organization-wide cost savings. More and more, business leaders are realizing that the procurement function is the stepping stone to achieving such savings across the greater organization. Current State In the last few years, focus has shifted to the procurement group to achieve increased savings. In order to realize this goal, procurement leaders have looked at every possible avenue to drive savings, including unit cost impact, FTE reduction, outsourcing and even process improvements. But it has been an uphill battle as budgets are slashed, departments are downsized and overall visibility into the organization from a procurement perspective is just not there. Fortunately, a solution is available: interconnected procurement, which connects procurement to the greater organization s ERP. Today, many organizations are looking at all possible options to give procurement the visibility it needs to be successful. They are looking at cloud solutions, on-premise solutions, bolt-on solutions and integrated solutions. On top of this, there are multiple solution providers that offer one or more services to support these efforts. Unfortunately, without a clear understanding of all these options, procurement leaders are having difficulty choosing the right solution for their organization. They often find months after installation after a significant investment that the solution and provider they chose was not the right fit because they are not getting their desired results. However, the fact that procurement leaders are getting their group out in front and connected to the rest of the organization means they are heading in the right direction, no matter how challenging the road may be. Challenges Connecting procurement to your organization s ERP can seem like a daunting task. The process does pose many challenges, and without a full understanding of the process and its potential pitfalls, the connection process can fail. Implementing a procurement solution is challenging for the following reasons: They are broad they encompass the entire enterprise. They are comprehensive they cover all aspects of an organization. Their power is often misunderstood they offer many efficiency gains. They are not always well deployed resulting in frustrations from lack of capabilities. Page 3
Adding to the complexity is the internal battle between the CIO and CPO. Often, their objectives and priorities are in direct conflict: CIO Objectives Robust IT architecture within two to five years CPO Objectives Savings within six to twelve months Perception of Risks Platform stability Intrusion/security Efficiency gains Priorities Do it right the first time Cross-organization integration Never compromise security Functional View Cost center implementing robust IT architecture Perception of Risks Supplier continuity Spend under Management is not clear, unknown or just incorrect Accurate delivery of savings Priorities Speed Knowledge Expertise Functional View Profit center helping the organization to reduce cost and increase revenue The Solution Procurement leaders are familiar with developing strategic solutions for the organization, and finding the right procurement tool(s) is no different. Thinking through your longer-term goals and understanding what the organization needs is a critical step in selecting the right Oracle Procurement option. This is not a simple office supply RFx this selection can make or break your results, and shooting from the hip can severely impact the outcome, both financially and operationally. However, on the other hand, strategically aligning your long-term goals with the right Oracle Procurement options will help you exceed your organization s goals through realized savings, continuous improvement, process efficiencies and reduced cycle time. Oracle Procurement is a best-of-breed solution that can offer impactful insights into your entire organization. With its source-to-pay solutions, most commonly Spend Visibility, Sourcing, Contracts and iprocurement, Oracle Procurement provides you with the visibility, knowledge, opportunities and controls to be successful. It integrates into the rest of your Oracle ERP, bestowing interconnected procurement and complete flexibility with Cloud and On-Premise delivery models. With such a robust and flexible solution, it is not always clear which model will best connect it to the organization s ERP. Is it on-premise, in the cloud, or a hybrid of both? There are three main elements to clearly define and understand when navigating these options for connecting to your ERP: Page 4
1. Available implementation models 2. The right procurement mix 3. Post-implementation services There are three main implementation models: on-premise, in the cloud or a hybrid. All three models offer different pros and cons, including cost, time to deploy, Capex vs. Opex, and so on. It is important to keep your implementation timeline, IT architecture and budget in mind when reviewing these options. Selecting the right procurement mix is the next step. This is slightly more involved, because not only do you need to choose which procurement modules to implement, but you must also determine who is impacted by your choice of procurement tools and how best to implement them. Depending on your budget, timeline and needs, you might only choose the Spend Visibility and Contract modules to start. From there, you must choose what implementation model will align with your long-term goals. As stated above, you can implement these models on-premise, in the cloud or using a hybrid approach. Lastly, and perhaps most importantly, you must choose your support services. This is often the most underestimated and undervalued piece of the navigation puzzle. Once you have implemented your selected modules, you will need on-boarding, enablement and ongoing support services, such as internal and external training. Without sufficient end-user training, testing and support, adoption will suffer and you will not extract the most value from the tools. Understanding how the solution works is essential for users to achieve its full benefits. This is a vital component to maximizing the benefits of the tool and expanding these results into the organization. Benefits of Leveraging Oracle Procurement Oracle Procurement helps businesses increase visibility into corporate spend and the complete source-topay process, which helps reduce costs, enhance profitability, and gain a competitive advantage. Organizations using Oracle Procurement benefit from increased visibility into corporate spend as well as the complete source-to-pay process, with comprehensive analyses of procurement performance, supplier performance, supplier payable trends and employee expenses. By gaining complete end-to-end insight into the spend patterns and visibility across the procurement processes, organizations can significantly reduce costs, enhance profitability, increase customer satisfaction, and gain a competitive advantage. Needless to say, these benefits will also help satisfy the priorities of both the CIO and the CPO. Page 5
Procurement Risks Unreliable spend data Low user adoption Inadequate supplier management Uncontrolled purchasing and low contract compliance Deployment timeline overruns Resource constraints Solution Implementing Oracle s Spend Visibility solution will allow procurement groups to identify where they are spending their money and with whom. Having insight into your spend can prevent leaving money on the table and help you identify future opportunities. Enrich s end-to-end support services ensure users are properly trained on the tool. Enrich has also developed solutions to enhance the user experience and increase user adoption. Enrich can effectively manage your supply base, eliminating many of the hassles and time-consuming tasks related to supplier management. Oracle s iprocurement module can ensure buyers are purchasing goods and services via negotiated contracts or catalogs. Enrich has developed pre-built integration components and conversions to significantly reduce implementation timelines. Enrich s support services minimize the tactical tasks your resources must perform, allowing them to focus on more strategic activities for example, forecasting, trends, make vs. buy analysis, and so on. The procurement team will experience specific benefits from the application, as they: Slash procurement costs by cutting transaction overhead, controlling maverick spending and realizing the full value of your preferred supplier agreements Streamline procurement while controlling material and component costs Quantify supplier performance to develop more profitable relationships Manage suppliers more effectively, decrease the risk of material shortages and ensure timely payments to the best-performing suppliers Achieve greater visibility into where and how both direct and indirect spending occurs across the organization Gain greater efficiencies through the ability to continually monitor and improve procurement while better managing costs Streamline employee ordering by eliminating error-prone paper processes with selfservice ordering, while also improving productivity and control Page 6
Enforce purchasing policies with unprecedented control and governance support The solution will also have a significant impact on the IT group, as they: Accelerate deployment of a Procurement & Spend data warehouse Integrate supplier and product data from multiple sources to provide business users with a complete view of procurement and spend business processes Tailor analytics to specific procurement and spend functions, including supplier management and sourcing Adapt to changing external and internal needs by leveraging, not replacing, existing investments Reduce the burden on internal IT resources with comprehensive user self-service capabilities By combining Oracle s best-of-breed procurement platform with Enrich s end-to-end solutions, you can meet or exceed your organizational goals while satisfying the requirements of both the CIO and CPO. At Enrich, we believe that our unmatched service capabilities will help you dollarize the benefits. Our solutions help minimize scope creep, increase decision speed, create business case realization incentives and provide advanced user preparation and adoption. We offer a rich user interface and mobile apps to help boost adoption, along with enhanced product innovation and supplier management capabilities. Conclusion When navigating your options for Procurement software, it is important to consider your specific business goals and requirements. While the CPO and CIO may seem to have opposing goals, it is possible to meet all of their needs with a comprehensive solution. If you take the time to review your possible options, available implementation models and functionality, you can integrate a complete solution that can help cut costs and streamline internal processes. Key Contributor: Mike Mohr, Practice Lead Strategic Procurement Mike Mohr has over 10 years of Strategic Sourcing, Procurement, and Supply Chain experience across multiple industries. As an Enrich Practice Lead, Mike is responsible for managing our Global Strategic Procurement accounts. Mike has a proven track record for leading complex cost reduction and business process optimization projects across a number of industries including manufacturing, government, media, telecommunications, pharmaceutical and utility. Page 7
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