Implementing
iProcurement:
More Than Meets the 00i>i00/font>
OAUG 00FALL 2002
San Diego, California
Vira Homick
Stuart
Benoff
2
Presentation
Agenda
Business Objectives for iProcurement Process improvements Enhance the effectiveness of the purchasing organization
3
Presentation
Agenda (continued)
4
About Penn
5
Purchasing
Overview
6
Purchasing
Overview - continued
7
Business Objectives
for iProcurement
8
Implementing
iProcurement
9
The Penn Marketplace
10
The Penn Marketplace
- continued
11
Strategic Sourcing
Three tiered approach for Marketplace suppliers High volume transaction suppliers School and Center specific suppliers Targeted community/minority suppliers
12
Strategic Sourcing
- continued
13
Strategic Sourcing
- continued
14
Strategic Sourcing
- continued
15
Catalog Content
Management
16
Catalog Content
Management-cont00
17
Demonstration
18
Demonstration
19
Demonstration
20
Demonstration
21
Demonstration
22
Demonstration
23
Demonstration
24
Demonstration
25
Demonstration
26
Demonstration
27
Demonstration
28
Demonstration
29
Demonstration
30
Demonstration
31
Demonstration
32
Future Directions
33
Conclusion
34
Questions
Vira Homick : homickv@pobox.upenn.edu
Stuart Benoff: benoff@isc.upenn.edu
Thank You!
1
Good afternoon Ladies and Gentlemen 00First off, thank you for joining us on the last session of the conference, we intend to get through this presentation rather quickly so that you can enjoy the rest of your stay here in San Diego.
I would like to introduce myself and my colleague, my name is Vira Homick and I00 the eProcurement manager with Purchasing Services and my colleague Stuart Benoff , the Project Lead from the Information Services Department of the University of Pennsylvania.
We will give you a brief overview this afternoon of the University00 version of the 11i implementation.
2
Let00 start with our agenda;
We00l have a brief background and history of the University and a current description of Purchasing Services Department functions and operations as they relate to eProcurement..
After the initial implementation of Oracle
for Purchasing, Accounts Payable and General Ledger in 1996 the University
and a core committee decided to conduct an assessment of the business
process with the user population which identified the functional areas
for improvement and reassessed the current catalog hosting process.
3
The implementation of the Penn Marketplace and iProcurement has enabled our strategic sourcing efforts, streamlined the purchase order process and brought us into a new world of catalog content management.
We00l then jump into our product demo and conclude with the future directions of the application from the Purchasing perspective.
We will be happy to answer your questions
at the completion of the presentation.
4
The University of Pennsylvania was the nation00 first University and was founded by Ben Franklin in 1740. The campus comprises of 140 buildings and on 275 acres and is located in West Philadelphia.
Currently the University is the second largest employer in the state of Pennsylvania, surpassed by Wal-Mart, with a student body of approximately 22,000 with an annual operating budget of over $3 billion dollars.
The University of Pennsylvania is one of the premier research and teaching institutions in the nation along with Wharton being one of the highest ranking business schools.
The University00 mission is to focus
on the highest standards of education, research and community service
and to best support this mission the central administration of the University
must effectively manage the resources by reducing administrative costs
and redeploying these resources.
5
The University is the first higher education institution in the nation to implement the integrated web based financial and eCommerce solution using Oracle00 iprocurement application in January of this year. Recently the Chronicle of Higher Education called Penn00 eCommerce applications 000the clearest glimpse into the future of electronic purchasing00
Penn00 financial management system, also known as BEN (Business Enterprise Network) Financials is comprised of Oracle00 General Ledger, Purchasing, iProcurement and Accounts Payable application.
The University end users of the procurement system are of a diverse base, their purchasing needs vary from research materials to office supplies, from MRO items to capital equipment. All these requirements can be attained from their desktops because of the decentralized Purchasing environment at the University.
There are currently 1600 en users of
the procurement system with an additional 40 to 60 system users
added on a monthly basis. It is our anticipation that we should have
in the vicinity of 2500 to 3000 users on the system. These 1600
users represent purchase requirements across 12 schools and 20 business
operating units. I do want to mention that the Hospital of the
University of Pennsylvania is a separate entity and has a completely
separate financial system.
The annual 150,00 PO transactions representing $525 million purchasing dollars flows through the BEN application.
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The University is the first higher education institution in the nation to implement the integrated web based financial and eCommerce solution using Oracle00 iprocurement application in January of this year. Recently the Chronicle of Higher Education called Penn00 eCommerce applications 000the clearest glimpse into the future of electronic purchasing00
Penn00 financial management system, also known as BEN (Business Enterprise Network) Financials is comprised of Oracle00 General Ledger, Purchasing, iProcurement and Accounts Payable application.
The University end users of the procurement system are of a diverse base, their purchasing needs vary from research materials to office supplies, from MRO items to capital equipment. All these requirements can be attained from their desktops because of the decentralized Purchasing environment at the University.
There are currently 1600 en users of
the procurement system with an additional 40 to 60 system users
added on a monthly basis. It is our anticipation that we should have
in the vicinity of 2500 to 3000 users on the system. These 1600
users represent purchase requirements across 12 schools and 20 business
operating units. I do want to mention that the Hospital of the
University of Pennsylvania is a separate entity and has a completely
separate financial system.
The annual 150,00 PO transactions representing $525 million purchasing dollars flows through the BEN application.
7
After the initial implementation of the
Oracle Applications in 1996, Penn Purchasing Services together with
representatives from Accounts Payable, Finance and Information Systems
assessed the procurement business process to evaluate the feasibility
of introducing enhanced eProcurement capability.
The University conducted a customer survey
to identify potential areas for improvement. The areas identified
included enhancements to existing capabilities and functionalities and
the development of entirely new processes.
Along with this need for the end users,
Penn Purchasing Services wanted to take advantage of the connectivity
and speed of the internet to provide analysis reporting for continuous
evaluation and optimization of the supply chain.
8
The survey identified some areas for
improvement that would be addressed by the Oracle software upgrades
but others were found to be outside the scope of the normal upgrades
and would require custom solutions.
One of the overwhelming concerns voiced
by the end users was the need to improve the PO creation process.
The system required too much data entry for the Business Administrators
(BA) which were the individuals who were creating the orders for multiple
end users. At that time we did not include the online requisitioning
capability and therefore the BA00 were receiving the ordering requirements
via requisitioning shadow systems, email messages, sticky notes and
the like.
A potential process improvement would
be to drive down the data entry responsibility to the level were the
requirements were being incurred. The data entry would be required
by every person who had the requirement and then routed to the next
person in their approval hierarchy. This could potentially reduce
the amount of errors and incorrect items ordered and reduce the amount
of rework by the BA00.
9
The Penn Marketplace is at the core of the BEN applications suite, providing and facilitating a seamless purchase-to-pay environment.
The Penn Marketplace is private online exchange for goods and services with Penn specific contract pricing which is intended for the sole use of Penn users.
The online catalogs and their content are hosted and managed in collaboration with Penn Purchasing Services by Global Exchange Services (GXS). The TPN product provides the access to GXS. GXS has recently been acquired Francisco Partners a venture capital group out of California. This completes the full integration of the BEN applications suite for the end user.
To date 51% of all PO transactions flow through the 28 Marketplace suppliers. These suppliers include our strategic partners as well as community and minority owned business.
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The favorites is the most sought out enhancement as we here from users today, where it will provide the end user the capability to create multiple shopping carts. These carts can be identified with a favorite name and then the most frequently ordered items can be chosen from those carts for their requirements for any particular day.
The quick order capability will enable the end user to create an order by listing the items they wish to order along with quantities, the system will then populate the shopping cart with the appropriate information.
Some process improvements that our end users are looking for have been addressed in some later versions of 11i, such as favorite account numbers (billing information) and the retention of the supplier information when ordering more than 1 item per supplier. The most clear need for the our end users is to have the ability to enter several line items with quantities on one screen. This in particular becomes an issue when creating non-catalog requests
Oracle Exchange 00will give us the option of being able to punch out directly to supplier sites with configurable items ( such as microscopes, systems furniture and the like) We are also considering in using this capability for high volume suppliers whose product line is large and is volatile in nature.
Integrated purchasing intelligence provides an easy-to-use portal that will help us analyze our spend, provide advanced analyses of productivity measures and accurate supplier performance information. With this knowledge we can quickly identify savings opportunities , improve supplier relationships and service, optimize operational efficiencies and make strategic decisions that reduce costs.
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