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Achieving Smart Sourcing using Oracle Procurement Cloud

Rapid globalization has led to organizations looking for different strategic avenues in terms of sourcing from suppliers in order to remain profitable and relevant with changing times. Supplier Qualification and Sourcing are two of the most critical aspects of the Procurement processes which will enable the organization to work collaboratively with suppliers and reduce costs on operational front. This article intends to highlight how Oracle Procurement Cloud can help organizations achieve Sourcing Excellence giving them competitive advantage to empower their business growth.

Traditional methods of sourcing led to inefficiencies due to incapability of organizations in managing information about supplier's qualifications, compliance with industry standards and ambiguous data across various systems resulting in higher sourcing costs and reduced profits. As organizations explore unique cost saving opportunities, they will tend to achieve Sourcing Excellence through smarter negotiation, smarter buying and smarter collaboration for both direct and indirect purchasing as opposed to the traditional methods.

Oracle Fusion Supplier Qualification Management and Oracle Fusion Sourcing provide a complete cycle from capturing the supplier information to awarding a decision to a supplier. Unique features such as Intuitive user experience for the suppliers, Real time monitoring of the negotiation process, Award analysis with different scenarios based on multiple criteria allow organizations to be agile and take smarter decisions considering the swift changes in the world economy.

Oracle Fusion Sourcing has unveiled an extremely useful feature of Two stage RFQ process for government and large public sector organizations considering the massive funds at stake.

Two stage RFQ - Oracle Sourcing

Most government and large public sector organizations tend to pursue two stage RFQ involving technical and commercial quotes. Oracle Supplier Qualification management helps identify the list of eligible suppliers, who are invited to submit technical and commercial Quotes. As a first step, technical quotes are opened and evaluated to shortlist the suitable suppliers meeting the technical criteria. Then subsequently the commercial quotes of only shortlisted suppliers are evaluated and through Award analysis based on defined parameters, an awarding decision is taken to source the contract to the winning supplier.

Two stage RFQ feature ensures transparency, reduced sourcing cycle time considering the number of suppliers involved and faster, accurate decision making as the supplier list can be entrusted upon as provided by Supplier Qualification Management.


Two_Stage_RFQ_Small.JPG

The implementation of Oracle Procurement Cloud can help organizations with useful capabilities and realize multiple business benefits like:


1.   Providing a framework for leveraging information about a supplier

Most organizations do not have the capabilities to track relevant information about the supplier which includes technical, financial capabilities, certifications (industry standards), performance history etc. Oracle Fusion Supplier Qualification Management provides the features to organize and capture the supplier information which can be vital for future sourcing purposes reducing the risks involved while selecting the suppliers which may affect the organisation and its business. By streamlining the Supplier information to Oracle Sourcing it provides an important link in execution of the sourcing process.


2.   Savings through automation of negotiation practices

Negotiation process time can be a major overhead if not dealt appropriately. Intuitive user experience provided by the Oracle allows the supplier to perform the required actions quickly depending on the stage of the negotiation process with all the information available at fingertips. Features such as embedded online training, support for common applications such as spreadsheets results in reduced complexity for suppliers and facilitating better efficiencies in the negotiation process.


Surrogate response feature will allow the organization or department which are offline to participate in the sourcing process allowing a gamut of suppliers and increasing competition leading to sustainable savings and improving the efficiency of the negotiation spend.


3.   Savings through standardization, collaboration and compliance

By providing the suppliers with standardized negotiation templates during the process of Request for information (RFI), Request for Quote (RFQ) from Suppliers and Auctions, it leads to standardized processes, easier navigation through the processes, reuse of the similar template for sourcing activities and greater benefit to global organizations which adhere to legal guidelines. Similarly online discussion and Oracle social network can be utilized for clarification or seeking information resulting in reduced effort and time for the stakeholders involved and allowing the process to reach its end conclusion.


4.   Real time monitoring of supplier bidding

As organizations move towards data analytics which is influential in decision making, Oracle Procurement real time monitoring features enable the organizations to analyse and compare the bids of the suppliers resulting in faster and accurate decisions considering various parameters in the decision making. Oracle also provides the information in form of dashboard for the ongoing negotiation process, future sourcing events along with timelines providing visibility and control over the process, thus helping sourcing managers and suppliers handle their workload more efficiently.


Negotiation_Monitor_1.PNG

Note: Above diagram shows a sample out of box negotiation monitor which can help in quick decision making for sourcing awards. The supplier names and amounts are purely for illustration purpose.

       5.  File-based Data Import (FBDI) capabilities

Oracle has provided File-based data import feature using which the users can enter large volume of business data in quick time. This feature can also be used to import large volumes of data from third-party applications. FBDIs are available for almost all key entities like Supplier Information, Requisitions, Purchase Orders, Blanket Purchase Agreements and Contract Purchase Agreements. Users can download the relevant excel template, fill in the required data and follow an easy upload process to create business data in no time resulting in productivity improvements.

Conclusion

Amalgamation of Oracle Fusion Supplier Qualification Management and Fusion Sourcing can help the organizations to move towards smarter decision making through three parameters - smarter negotiation, smarter buying and smarter collaboration resulting in enormous savings unlike seen in the traditional methods. In times to stay relevant, Smart Sourcing is one of the most crucial criterion towards sustainability and profitability of any procurement organization.

Authors: Jaskirat Singh & Ashish Oswal 


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