release 12– procurement marketing overview david hope-ross

<Insert Picture Here>

Release 12– Procurement Marketing OverviewDavid Hope-Ross

© 2006 Oracle Corporation – Proprietary and Confidential

Agenda

• Market Overview & i10 Results• Messaging Design• Release 12 Primer, Messages, and Overview• Summary


Number of Key Suppliers Fall

New Skills Needed to Operate In Globally

Complex and Uncertain World

Performance Metrics Better Aligned With Company Objectives

ITSales

SuppliersBuyer

Program Manager

Sourcing Mngr

v.2 v.1

Senior Management’s Expectations

For Purchasing Grow

Requirements for increased global and regional capabilities

The Future Of Purchasing & Supply Regional & global sourcing strategies will become a critically important source of competitive advantage

CPO

Technology key to globalization and sourcing strategies enterprise wide.

More flexibility & external customer focus required to maximize supplier contributions

Source: Center For Advanced Purchasing Studies, THE FUTURE OF PURCHASING AND SUPPLY: A FIVE- AND TEN-YEAR FORECAST


34%

3,512

0.74%

54

World ClassPurchasing

Organization

36% Increase25%

% time spent on Risk Management and Decision Support

Activities

More Buying Power

7,805 Suppliers Per $Billion of

Spend

27% LowerCosts

1.01%

Total Cost of Procurement

(as % of Spend)

48% Less Staff104FTE per $Billion of

Spend

ComparisonSummary

TypicalPurchasing

OrganizationPerformance Indicator

Shift investment in procurement to higher-value activities

Reduce staff by swapping labor for technology

Goal: Achieve World Class Procurement

Source: Hackett Group & Oracle


Procurement Market OverviewA modest 6% CAGR doesn’t reflect key growth areas in specific

deployment modes, sub-segments, and geographies.

• AMR forecasts revised upwards, and then upwards again!

• 100%+ growth in SaaS but from a small base (12% of the market)

• Sourcing is a key growth engine (15% growth on 34% of the market)

• EMEA’s share is increasing (19% growth on 29% of the market).

• The market is evenly split between manufacturing & non manufacturing industries

0

100200

300400

500600

700800

9001000

2005 2006 2007 2008 2009 2010

Other*

Contract

Sourcing

Procurement

Source: AMR Research, The Procurement and Sourcing Applications Report, 2005–2010

Worldwide Sourcing & Procurement Software License Revenue Forecast

$=779M in 2006

CAGR 6% through 2010

Market Size


How Is The Competition Doing...

Mergers, Acquisitions, & Divestitures• Procuri acquired TrueSource Inc • SAP acquired Frictionless Commerce• D&B acquired OpenRatings• iMany’s on-again-off-again restructuring• Empotris acquired Mindflow, Entigma, Valuedge• PerfectCommerce acquired the remains of

CommerceOne• VerticalNet acquired B2eMarkets• ClickCommerce acquired eLance Service &

Contractor Management Business• Others…

Will SAP Ever Catch Up?• Next Release in 2010• Calls Frictionless- a “Quick Win”• According to Forrester leaves holes:

• Contract Management• Spend Analysis• Sourcing Bid Optimization• Supplier Enablement

BPO, Software, SaaS, Hosting, Consulting, Prospecting & Bidding???

Would you bet your career on this company’s software?


What About Oracle?


Since 11i10 Was LaunchedUnanimous Praise From Forrester, Aberdeen, AMR, & Gartner

eProcurement

eSourcing

Contracts

“The Oracle supply management applications are now competitive enough to be short-listed in non-Oracle IT environments.”

AMR Research


What Did Customers Think? 11i10 Drove Record Results

• 24% Growth Since 11i10…

• #’s Excludes Contracts!

• Record Setting Quarters

• #1 Marketshare in 05*

* Oracle Analyst Relations Currently In Discussions with AMR re. ‘06

Market Share

SAP, 14%

Oracle, 10%Ariba, 10%

A.T. Kearney, 4%

Emptoris, 3%

Perfect Commerce*, 2%

SAP Oracle AribaA.T. Kearney Emptoris Perfect Commerce*ePlus* Procuri LawsonDun & Bradstreet i2 Technologies IBSVerticalnet iMany Silver Oak SolutionsICG Commerce

Vendors Ranked by '05 Procurement &

Sourcing License & Hosting Revenue*

Source: AMR Research, The Procurement and Sourcing Applications Report, 2005–2010


Agenda



The CPO Asks “What’s New In R12?”

How many floors will you need?

• Hundreds of new features

• Over 300 man-years of development effort

• New integrations to Payables, Projects, AME, iSurvey

• New UI’s

• New methods for tackling critical categories


Solution: Message Matrix

• The Message Matrix is a structure and methodology for developing clear, assimilable and durable key messages for products, suites... and releases.

• It exists as:• A Positioning Statement

• 3 Key Messages• And substantiating sub-messages


Positioning StatementYour Elevator Pitch

A one-sentence existential statement for your offering that:

•Names it

•Categorizes it

•States its benefit – or says what it does

Template: •“Product Name is the product category that delivers product benefit”

Example: •“Oracle Advanced Procurement is the integrated suite that dramatically cuts all supply management costs.”


Key Messages Supports for the Positioning Statement

Three benefit statements (no features) that support your positioning statement’s claim

• Key Message Template:

•“Receive this benefit”

• Key Message Example:

•Enforce Policy Compliance

Key messages are the three “value buckets” into which you will place all of the value-propositions of your offering. No matter how many value props and features you have, they can and should be divided into three buckets—no more, no less

• Sub messages substantiate your key messages at ‘next level down’, This is the right place for features.


Product Key Message Design Goals

• Simple• Salesperson can say them at 3am after 3 beers

• Stable• Should not change with each release• New releases get their own “delta” messages

• Specific• Distinct from your other product families, individual products, and

(when appropriate) competitors


Why Three?

• Three seems to be a hard-wired natural number• Natural • Digestible• Leaves room on the ‘mental truck’

• Examples• Larry, Moe, and Curly• hazy, hot, and humid • blood, sweat, and tears• tic, tac, toe• executive, judicial, and legislative• gold, silver, bronze• win, place, show• over paid, over sexed, and over here• planes, trains and automobiles• see no evil, hear no evil, speak no evil


Equal Weight

Right Wrong

Messages at the same level should have similar “heft” and value


Structure of Release Messages

Release Positioning• Does not replace family or product messaging• Says what is different about this version of this product or family• Condenses 1486 TOI slides and 17lbs of documentation

Takes the form of ‘goodness’ tagline• The BLANK release, e.g., The Compliance Release, The Global Release• You generally don’t know what it is, but you’re pretty sure you want one.

• Self-Defending Networks• Professional Grade• Trail Rated

Key messages are required to substantiate (and define) goodness• 3 is still the number• The ‘next level down’ in the hierarchy need not be constrained to 3• This creates a stable home in which any number of features can live.


Analyst Relations

Key Message 1

Places Where Messaging & Positioning Live Consistency and Repetition Are Key

Key Message2

Key Message 3

Release Positioning Customer Presentations

Online

Public Relations


Agenda



Oracle Procurement Circa 1996 Focus On Transaction Processing Automation

Receive & Reconcile

Create & Route PO

Pay

Accrue/RelieveTax Encumbrance


Oracle Procurement Suite in 2006 Improving All Aspects Of Supply Management

Content Management

Receive & Reconcile

Approval Policies

Review / Approve

Create & Route PO

Pay Supplier

Matching Rules

Accrue/RelieveTax Encumbrance

RequisitionAnalyze Spend &

Performance

Award Optimization

Source Contract

Supplier Enablement

Lifecycle Management

Collaboration


A Decade Of Procurement InnovationWhat’s Wrong With This Picture?

2006

eProcurement

1996 2000

SourcingSupplier

EnablementContract

ManagementeInvoicing AnalyticsSpend Data

Management

Employees & Business Managers

Suppliers & IT Departments

Accounts Payable

Sourcing Managers &

Budget Holders

Data Analysts & Category Managers

Legal and Contracts Managers

Data Analysts & Project

Managers

Niche Vendors Drove Innovation “At The Edges”, Neglecting the Needs Of Procurement Professionals- especially with respect to managing their daily work-loads.

HR & IT

Services Procurement


What’s Wrong With This Picture?


What’s Wrong With This Picture?(If You’re Trying to Sell Licenses?)

Vendor Tool Examples:Vendor Tool Examples:Addeco- WorkCardAddeco- WorkCardBeeLine.com- Modis Professional GroupBeeLine.com- Modis Professional GroupDirectsource- Manpower AssociatesDirectsource- Manpower Associates


Services Procurement Must Transcend Contingent Labor To Become Viable

Service spend averages $1.8B for the typical Fortune 1000 company (11% of revenue or 31% of spend)

This means tackling the hardest problems, including those that transcend arbitrary product or department boundaries


Where is the focus today?

20%

23%

25%

27%

43%

60%

0% 20% 40% 60% 80%

Reduce Maverick Spend

Centralize Procurement Processes

Improve Spend Visibility

Reduce Transaction Costs

Improve Compliance

Automate Procurement Processes

Source: September, 2006

Pressures for Procurement Technology Adoption


Where is the focus going to be?

Solution Area % Selected

Contract compliance 21%

Supplier performance management 21%

E-Sourcing 18%

Invoice reconciliation & payment applications/services/network 16%

Travel & entertainment expense management 15%

Catalog management tools/services 14%

Contract repository/authoring solution 14%

Extending Procurement Solutions – Planned Investment over Next 12-24 Months

Source: September, 2006


Advanced Procurement R12The Procurement Professional’s Release

• Unified work-center for all procurement responsibilities

• Improved support for complex goods-and-services

• Expanded supplier management & enablement






•Professional Buyer’s Workcenter

•Unified Catalog

•Two way Word Synchronization


Professional Buyer’s Work Center Command and control for the procurement professional

• Multi-Org Access

• Reduced pop-ups and duplicate screens

• Re-designed and streamlined entire workflows

• Reduced the number of steps to complete key tasks

• Improved overall look & feel and visual style

• Increased personalization capabilities


Unified Supplier Catalog A Single Catalog for all Procurement Uses

UnifiedCatalog

Approve

iSP

Supplier

SourcingSourcing

Professional

Award

PBWC

Buyer

Bulkload /Online author

iP Admin

CatalogAdmin

PO

Buyer

iP

Requester

External Supplier Sites


Microsoft Word Synchronization Maintain structured contracts with Word

Create Contract

Apply Template

Download in .rtf format

Modify Offline

Upload as attachment

11.5.10 CU1

Create Contract

Apply Template

Download in .rtf or MS Word .xml

formatModify Offline

Upload as attachment or synchronize

Release 12.0

New in Release 12.0






•Complex Requisition Approvals

•Complex Sourcing Awards

•Complex Work Procurement

•Requestor Driven Procurement


What’s New in Approvals?

• Parallel Approvals• Several approvers can be simultaneously notified for a given

requisition, thus speeding up the requisition approval process

• Support for Viewers• Allows flexibility in keeping a person/role informed of business

purchases and decisions, without requiring a response

• Position Hierarchy Support• Allows customers to define approval routing structures that remain

stable even if individual employees leave their organization or transfer within it

• Graphical Approval Path UI Display• Provides preparers and approvers a simple and intuitive graphical

view of the approval chain and requisition status for a given requisition


Advanced Approvals Enhancements

The Approval Graphical View shows the following:

― Jon Alba has approved the requisition as indicated by the green checkmark icon

― The requisition is currently pending approvals from the Facilities Management Group and Jessie Bauer as indicated by the clock icon


Procurement for Complex ServicesDefine Progress Payment Schedule

Capture Progress Payment Schedule

• Flexible Progress Payments - Rate, Lumpsum & Milestone Pay Items• Pay Item Owner• Project Details, Attachments


Team Scoring of Requirements

• Each Team Member scores each response

• Each Team Member scores the assigned Section

• Oracle Sourcing calculates average of individual score sheets to determine Section score

• Sum of Team scores determines overall response score (as input to Optimization)

Quality Control Team

Technical Team

Technical Capabilities (40% weight)

Commercial Team

Price (40% weight)

Past Performance (20% weight)

Quote 988

• John = 90• Mary = 85• Sue = 80

• Sue = 75• Doug = 80• Tina = 85

• Alan = 90• Mark = 80

Technical Capabilities = 34

Price = 32

Past Performance = 17

TOTAL SCORE FOR QUOTE:

83





• Expanded supplier management & enablement •Supplier Catalog Authoring

•Supplier Scorecarding

•Supplier Registration


Supplier Request ProcessReduce Overhead with Self-Service Registration

SupplierSupplierSupplierSupplier

BuyerBuyer

Configurable Registration Form

Review & Approval- Configurable approval flow (AME)- Approver has option to update details

Upon approval, supplier record

automatically created

Supplier Self-Service Registration

Supplier

Requests


Supplier Management User-InterfaceStreamlined supplier profile management

Create supplier

Search, or drill down to supplier details

To Do List for requests


Supplier Catalog Management

• Suppliers can upload and create on-line catalogs• Supplier edits blanket agreement to add items• Difference summaries to buyer

• Buyers only need to approve the uploaded or modified catalog


System assess changes…

• Tolerances for auto-approval• Percentage• Absolute

• Determine if requester should review

• Quantity, Promise Date, Price

• Route up approval hierarchy • Based on user authorization limits

Supplier Change OrdersNew capabilities for process automation

+- %,x

Supplier can create single change request across multiple POs


Supplier Management KPIs

Spend Analysis Trend

Supplier ScorecardSelf-service supplier performance management


Agenda



New in 11i.10…Base Differentiators…• Self-service enterprise

requisitioning from suppliers or internal stock

• Integrated asset and production planning

• Supplier Self-Service

• Flexible invoice matching including match to receipt

• Automatic invoice and debit memo generation

• Project- and budgetary-based purchasing

• Multi-attribute scoring for reverse auctions and RFQs

• Packaged spend, supplier , and commodity intelligence

• Advanced pricing capabilities

• Transparent Punchout

• Global Agreements

New in R12…• Services procurement –

contingent labor & bus services, negotiation through payment

• Procurement contracts – global T&Cs standards, negotiation, doc & change mgmt, compliance

• Formula-based pricing & tiered discounts (Advanced Pricing)

• Retroactive pricing including automated invoice adjustments

• Negotiate with subjective scoring and what-if analyses

• Automatic bid scoring and award (Sourcing Optimization)

• Shared services procurement

• Requisition “SmartForms”

• LPN & lot/serial receiving

• Supplier managed banking

• XML publisher for .pdf printing

Evolution of Oracle Advanced ProcurementRelease 12, The Procurement Professional’s Release

• Professional Buyer’s Workcenter

• 2-Way Word Integration• Unified Catalog Architecture• Shared Services Support• Requestor Directed

Procurement• Prospective Supplier

Registration using iSurvey• Supplier Catalog Authoring• Tolerance Based Order Change

Auto-approval• Supplier Scorecarding • Prospective Supplier

Registration• Advanced Pricing Integration• Team Scoring of Sourcing

Requirements• Parallel Approvals• Position Hierarchy Approvals• Complex Work Procurement• eTax Integration


Oracle Advanced Procurement 12.0 The Procurement Professional’s Release

Unified work-center for all Unified work-center for all procurement responsibilitiesprocurement responsibilities

Improved support for complex Improved support for complex goods and servicesgoods and services

Expanded supplier Expanded supplier management and enablementmanagement and enablement


If You Remember Nothing Else…

• 11i10 was and is a strong release and with strong up-sell opportunities

• R12 further strengthens our capabilities• Over 3 man-centuries of development work invested• 100’s of new features• Aimed squarely at the Procurement professional • Improvements in core transaction processing as well as

strategic competitive functionality

release 12– procurement marketing overview david hope-ross

Documents