implementing iprocurement: more than meets the i oaug – fall 2002 san diego, california vira...
TRANSCRIPT
Implementing iProcurement:More Than Meets the “i”
OAUG – FALL 2002San Diego, California
Vira HomickStuart Benoff
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Presentation Agenda
• Background– About Penn
– Purchasing Overview
• Business Objectives for iProcurement– Process improvements
– Enhance the effectiveness of the purchasing organization
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Presentation Agenda (continued)
• Implementing iProcurement• The Penn Marketplace• Strategic Sourcing• Catalog Content Management• Product Demonstration• Future Directions/Conclusions• Questions?
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About Penn
· Nation’s first University founded in 1740 by Benjamin Franklin
· 24,500 employees and 22,300 students· Major research institution· Annual operating budget of approximately
$3.2 Billion· Pursuit of administrative excellence is
administration’s top business objective
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Purchasing Overview
· Oracle Financials (Purchasing, Payables & GL) implemented in July 1996
· Upgraded to Release 11i in January 2002· Introduced the Penn Marketplace, Penn’s
private online exchange in January 2002· First higher education institution to
implement Oracle’s iProcurement application
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Purchasing Overview - continued
· Decentralized purchasing environment with final purchase approval <$5,000 delegated to the point-of-demand– 1600 end users across 12 schools and 20
business units– 150,000 annual PO transactions representing
$525M in purchasing dollars
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Business Objectives for iProcurement
· Process improvement resulting from customer feedback– Reduce time and effort related to order
creation– Provide easy access to supplier content for
most commonly ordered items
· Enhance the effectiveness of the purchasing organization– Focus on shifting purchasing volume to
“preferred contract suppliers”– Consolidate supplier database– Reduce maverick buying– Identify new cost savings opportunities
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Implementing iProcurement
· Introduced to the campus community as part of the Upgrade to Oracle Financials Release 11i – Delegates the item shopping and requisition
creation to the point-of-demand– Enables multi-supplier ordering in a single
shopping session– Oracle workflow used for requisition routing
and purchase order approval– Provides access to the Penn Marketplace
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The Penn Marketplace
· The Penn Marketplace – Private online exchange for most commonly
ordered products and services– Contains over 500,000 products from 28
suppliers representing 2700 manufacturers and distributors with Penn specific contract pricing
– Catalog content hosting and management services provided by Global Exchange Services (GXS)
– Robust search tools with results displayed in a consistent format
– Facilitates a seamless purchase-to-pay environment
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The Penn Marketplace - continued
· Supports strategic purchasing initiatives– Provide easy access to commonly ordered
items– Provides enhanced purchasing data to
support future contract negotiations– Focuses purchasing attention on strategic
“preferred contract suppliers” – Finding the right item quickly and easily
reduces maverick buying
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Strategic Sourcing
· Supplier recruitment
– Three tiered approach for Marketplace suppliers– High volume transaction suppliers– School and Center specific suppliers– Targeted community/minority suppliers
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Strategic Sourcing - continued
· Contract negotiations– All participating suppliers had new or newly
renegotiated pricing agreements – Supplier recruitment and contract
negotiations resulted in approximately $4.2M in new product and service cost savings (as of 10/1/02)
· Reduce maverick buying by channeling users to Penn Marketplace suppliers
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Strategic Sourcing - continued
· Supplier marketing opportunities– iProcurement provides direct access to
faculty and staff via messages on the homepage
– Web hosting of electronic promotions provided by Penn Purchasing Services
– Participation in Penn sponsored supplier trade shows
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Strategic Sourcing - continued
· Use of EDI to transmit purchase orders to Penn Marketplace suppliers and receive their invoices– Reduces process cycle time– Administrative cost savings for both
supplier and Penn– Enhances matching of invoices to PO’s– Enables negotiations for prompt pay
discounts
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Catalog Content Management
· Partnered with Global Exchange Services– Provides catalog management and hosting
services – Transforms and standardizes supplier
content– Provides supplier ramping services– Facilitates training of supplier
representatives and purchasing staff – Provides online tools for managing catalog
content
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Catalog Content Management-cont’d
· Approach to supplier content development– Based on Penn’s past purchase history– Based on other higher education and
research institution’s purchase history– Optionally, load full supplier catalog– Regularly scheduled updates to maintain
catalog “freshness” and accuracy
· Verification of content– UNSPSC, hazardous material, and pricing
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Demonstration
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Demonstration
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Demonstration
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Demonstration
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Demonstration
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Demonstration
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Demonstration
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Demonstration
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Demonstration
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Demonstration
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Demonstration
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Demonstration
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Demonstration
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Demonstration
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Demonstration
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Future Directions
· Global Exchange Services – Favorites List – Quick Order Capability for marketplace items
· Oracle– Process improvement for products and
services not in the marketplace – Oracle Exchange– Oracle’s Purchasing Intelligence
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Conclusion
· Current Status of the Penn Marketplace– As of October 1, 2002, 51% of all POs were
created from the 28 marketplace suppliers– All participating suppliers have realized
significant growth in business
· iProcurement and Penn Marketplace addressed the major concerns– Enabled creation of a requisition at the point
of demand– Enhanced our ability to manage our key
suppliers and their catalog content– Streamlined the PO creation process
