ORACLE E-BUSINESS SUITE

RELEASE CONTENT DOCUMENT

Procurement
Release 12.1 (through 12.1.3)

Prepared by EBS Product Management & Strategy

Last Updated: July 9, 2010

Version: 4.0

Copyright © 2010 Oracle Corporation

All Rights Reserved
Table of Contents

1. Disclaimer 1
2. Introduction 2
2.1. Purpose of Document 2
3. New and Changed Features in Procurement 3
3.1. Oracle iProcurement 3
3.1.1. Overview 3
3.1.2. Release 12.1.1 3
3.1.2.1. Change Management for Internal Requisitions 3
3.1.3. Release 12.1.2 3
3.1.3.1. In-line Commodity Classification 3
3.2. Oracle iSupplier Portal 4
3.2.1. Overview 4
3.2.2. Release 12.1.1 4
3.2.2.1. Dispute Resolution for G-Log Invoices 4
3.2.2.2. AP/AR Netting 4
3.2.2.3. Products and Services Search 4
3.2.2.4. Business Classification Recertification 5
3.2.2.5. Third Party Payments 5
3.2.3. Release 12.1.3 5
3.2.3.1. Work Confirmation Correction 5
3.3. Oracle Procurement Contracts 5
3.3.1. Overview 5
3.3.2. Release 12.1.1 6
3.3.2.1. Structured Terms Authoring in Repository Contracts 6
3.3.2.2. Secure Enterprise Search 6
3.3.2.3. Deliverable Payment Holds 6
3.3.3. Release 12.1.2 7
3.3.3.1. Author Individual Clauses in Microsoft Word 7
3.3.3.2. Project Manager Dashboard for Maintenance of Procurement Deliverables 8
3.4. Oracle Purchasing 9
3.4.1. Overview 9
3.4.2. Release 12.1.1 9
3.4.2.1. PO and Requisition Mass Update 9
3.4.2.2. Enable All Sites for Global Contract Purchase Agreements 9
3.4.2.3. FPDS-NG Integration 9
3.4.3. Release 12.1.2 9
3.4.3.1. Purchase Order Pricing Enhancement 9
3.4.3.2. Project Security within Oracle Purchasing 10
3.4.3.3. Procurement Web Services – Purchasing 10
3.4.4. Release 12.1.3 11
3.4.4.1. Landed Cost Management (LCM) Integration 11
3.4.4.2. Asset Lifecycle Management (ALM) Integration 11

Oracle E-Business Suite Release 12.1 Release Content Document ii

3.5. Oracle Services Procurement 11
3.5.1. Overview 11
3.5.2. Release 12.1.1 12
3.5.2.1. Time Reporting and Contractor Assignment Flexibility 12
3.5.3. Release 12.1.2 12
3.5.3.1. Oracle Projects – Work Confirmations 12
3.6. Oracle Sourcing 12
3.6.1. Overview 12
3.6.2. Release 12.1.1 12
3.6.2.1. Two Stage Evaluation of RFP 12
3.6.2.2. Two Stage RFQ – Surrogate Bids 13
3.6.2.3. Supplier Response PDF 13
3.6.2.4. Enhanced Spreadsheet Support 13
3.6.2.5. Countdown Clock 15
3.6.2.6. Price Tier Enhancements 15
3.6.2.7. Cost Factor Enhancements 15
3.6.3. Release 12.1.2 15
3.6.3.1. Earnest Money Deposit 15
3.6.4. Release 12.1.3 16
3.6.4.1. Requester Field in the Sourcing Header 16
3.6.4.2. Descriptive Flex Field (DFF) in Oracle Sourcing Header 17
3.6.4.3. Landed Cost Management (LCM) Integration 18
3.7. Oracle Sourcing Optimization 18
3.7.1. Overview 18
3.7.2. Release 12.1.1 18
3.7.2.1. Sourcing Optimization Enhancements 18
3.7.2.2. Price Tier Optimization 19
3.7.2.3. Supplier Incentives 19
3.8. Oracle Spend Classification – New Product 19
3.8.1. Overview 19
3.8.2. Release 12.1.2 20
3.8.2.1. Integration with Procurement and Spend Analytics 7.9.6 20
3.8.2.2. Knowledge Base Creation and Incremental Updates 21
3.8.2.3. Multiple Knowledge Bases 21
3.8.2.4. Easy to Use User Interface 21
3.8.2.5. Export and Import to Excel 21
3.8.2.6. Ability to Classify Data into Multiple Taxonomies 22
3.8.2.7. In-line Commodity Classification 22
3.9. Oracle Supplier Hub – New Product 22
3.9.1. Overview 22
3.9.2. Release 12.1.1+ 23
3.10. Oracle Supplier Lifecycle Management – New Product 23
3.10.1. Overview 23
3.10.2. Release 12.1.1+ 24
3.10.2.1. 360° Supplier View 24
3.10.2.2. Supplier Search 24
3.10.2.3. Supplier Profile Management (including Self-Service) 24
3.10.2.4. Extended Supplier Profile 25
3.10.2.5. Registration and On-Boarding of New Suppliers 25
3.10.2.6. Qualification Management 25
3.10.2.7. Compliance and Profile Audits 26
3.10.2.8. Performance Evaluation 26
3.10.2.9. Supplier Notifications 26
3.11. Oracle Supplier Network 27
3.11.1. Overview 27

Oracle E-Business Suite Release 12.1 Release Content Document iii

 3.11.2. Version 5.0 27
3.11.2.1. Consolidated Hub Administration 27
3.11.2.2. Production Routing Controls 27
3.11.2.3. UTF-8 Support 27

Oracle E-Business Suite Release 12.1 Release Content Document iv

1. Disclaimer
This Release Content Document (RCD) describes product features that are proposed for
the specified releases of the Oracle E-Business Suite. This document describes new or
changed functionality only. Existing functionality from prior releases is not described. It
is intended solely to help you assess the business benefits of upgrading to the specified
release of the Oracle E-Business Suite.
This document in any form, software or printed matter, contains proprietary information
that is the exclusive property of Oracle. Your access to and use of this confidential
material is subject to the terms and conditions of your Oracle Software License and
Service Agreement, which has been executed and with which you agree to comply. This
document and information contained herein may not be disclosed, copied, reproduced or
distributed to anyone outside Oracle without prior written consent of Oracle. This
document is not part of your license agreement nor can it be incorporated into any
contractual agreement with Oracle or its subsidiaries or affiliates.

This document is for informational purposes only and is intended solely to assist you in
planning for the implementation and upgrade of the product features described. It is not
a commitment to deliver any material, code, or functionality, and should not be relied
upon in making purchasing decisions. The development, release, and timing of any
features or functionality described in this document remains at the sole discretion of
Oracle.

Due to the nature of the product architecture, it may not be possible to safely include all
features described in this document without risking significant destabilization of the
code.

Oracle E-Business Suite Release 12.1 Release Content Document 1

2. Introduction

2.1. Purpose of Document

This Release Content Document (RCD) communicates information about new or
changed functionality introduced in Oracle E-Business Suite Release 12.1 and
subsequent 12.1.x Release Update Packs and off-cycle patches.

For your convenience, features are organized by product, and then by the release in
which they first became available. Release 12.1.1 was the first generally-available
release of Release 12.1. Features released in an off-cycle patch on Release 12.1.1, but
before Release 12.1.2, are designated as Release 12.1.1+. Features released in RUP2 of
Release 12.1 are designated as Release 12.1.2, and so on.

Existing functionality in Release 12.0, Release 12.0.x Release Update Packs (RUPs), or
prior releases is not described in this document. For a complete overview of all
functionality included in prior releases, this document should be read in conjunction with
the Release 12 and Release 12.0.x RUP RCDs. These RCDs can be found in My Oracle
Support Document 404152.1 Release Content Documents for E-Business Suite Release
12 and 12.0.x Release Update Packs.

Oracle E-Business Suite Release 12.1 Release Content Document 2

3. New and Changed Features in Procurement

3.1. Oracle iProcurement

3.1.1. Overview

Oracle iProcurement is the self-service requisitioning application that controls employee

spending. It is a key component of Oracle Advanced Procurement, the integrated suite
that dramatically cuts all supply management costs.

3.1.2. Release 12.1.1

3.1.2.1. Change Management for Internal Requisitions

In Release 12.1.1, processing for internal orders has been enhanced to offer additional
and better-coordinated change management capabilities. Now, quantity or date
information can be updated by either the Requesting or Fulfillment organization and the
updates will be accurately reflected on both the internal requisition and the internal sales
order. In addition, support is now provided for the cancellation of internal transfer
requests. All of these changes will now be visible throughout the planning, purchasing
and order fulfillment workbenches.

A requester can update Quantity and Need-By Date of an approved internal requisition.
If desired, tolerances can be set for automatic approval of updates made to the internal
requisition.

Many new synchronization features are provided. Quantity and Need-By Date changes
on the internal requisition line are automatically propagated to the internal sales order
and vice versa. Cascading of an internal sales order Schedule Ship/Arrival date with the
internal requisition is may be controlled through a profile option. Cancellation of an
internal requisition/line will automatically cancel the corresponding internal sales
order/line and vice versa. And finally, the urgent flag on the internal requisition line will
flow onto the internal sales order line as the shipment priority, based on a profile option
setting.

3.1.3. Release 12.1.2

3.1.3.1. In-line Commodity Classification

At times, requesters may need to order off catalog and create a Non-Catalog Request.
When requesters describe the purchase, there is a high likelihood of it not being
classified into an existing commodity hierarchy. This increases misclassification of
spend information, contract leakage, lower compliance and internal controls.

In R12.1.1 onwards, requesters creating Non-Catalog Requests will have the option of
category being predicted for the purchase being made. After the requester clicks on
“Add to Cart” they will be able to view a “suggested best fit” category with a list of
categories that could be alternate possibilities. The same window can also be used to
parse the complete Category hierarchy. This approach uses the Oracle Spend

Oracle E-Business Suite Release 12.1 Release Content Document 3

 Classification in real-time to assess the category of what the requester is ordering. The
requester merely picks the purchasing category and continues checking out. This
capability allows even unstructured requests to be categorized appropriately, aiding
downstream spend analysis.

This feature has a prerequisite of Oracle Spend Classification.

3.2. Oracle iSupplier Portal

3.2.1. Overview

Oracle iSupplier Portal is the enterprise application that structures all supplier
communication through a secure, Internet-based portal. It is a key component of Oracle
Advanced Procurement, the integrated suite that dramatically cuts all supply
management costs.

3.2.2. Release 12.1.1

3.2.2.1. Dispute Resolution for G-Log Invoices

In situations where suppliers include sundry charges on a G-Log invoice, it is not
uncommon for the buying organization to hold the invoice in order that the buyer can
review any discrepancies between the invoice and the original Purchase Order.
Depending on the nature of the additional charges, the buyer and supplier may negotiate
a compromise and adjust the invoice accordingly.

When such disputes occur, it is important that the supplier is able to log and track all
activities for a particular invoice. To better help suppliers in these situations, new fields
have been added to the View Invoice page so that the supplier can see the original value
for their invoice and the reason for the discrepancy.

3.2.2.2. AP/AR Netting

It is a common business practice in many industries to both purchase products or services
from a trading partner and sell products or services to the same trading partner. In cases
like this companies often offset payable and receivable invoices so that only the net
difference is paid or received. This saves you and your trading partners the expenses
associated with making multiple payments.

The new feature will give iSupplier Portal users visibility into the AP/AR netting
activity, so they can easily see which invoices will be paid standalone, which invoices
will be offset against receivable transactions, and which groups of invoices will be paid
by a single payment. On the View Invoices and Payments pages, if a particular invoice
has been netted, the users will be able to see the Netted Amount and the Reckoning
Currency. Furthermore, the users will be able to drill down to the Netting Report, which
will show all transactions that are a part of the netting batch.

3.2.2.3. Products and Services Search

A new search tool has been added to the Products and Services section of the Supplier
Profile to make it much easier for suppliers and administrators to find and select the

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 goods or services categories that identify a supplier's capabilities. This is especially
useful for those customers that have an extensive Products and Services hierarchy with
many thousands of individual categories from which to choose.

The new feature is available within both the Profile Management pages for existing
suppliers and the prospective supplier registration flow.

3.2.2.4. Business Classification Recertification

For those businesses required to track the business classification details of their
suppliers, it has always been a challenge to keep this information up to date to the
satisfaction of auditors. Now, a recertification tool has been added to the Business
Classification section of the Supplier Profile that tracks the "Last Update" date for the
supplier's classification details and allow administrators to schedule reminder
notifications to be sent to each supplier as this information becomes due.

This feature significantly reduces risk and administrative burden for buying
organizations because they will no longer need to manage the recertification process
manually.

3.2.2.5. Third Party Payments

Third party payments help parties engaged in business set off their liabilities without
directly paying them. This reduces the direct funds movements and enables transactions
to be settled easily. When customers are making payments from their Payables system,
there might be instructions from the supplier to make payment to a different party (Third
Party). In that case the remittance of the payment has to be made to the Third Party.

Establishing Third Party Payment relationship can be done from iSupplier Portal.
Suppliers can add a new relationship and find and update existing relationships.

3.2.3. Release 12.1.3

3.2.3.1. Work Confirmation Correction

At times, there may be a need to correct a previously approved work confirmation in
order to adjust a payment to a supplier. This capability enables a buyer to reduce the
scope of the original work confirmation, when an error is made during data entry for the
work confirmation. Work Confirmation Correction is possible via Purchasing
Professional Buyers Work Center and iSupplier Portal internal view. Buyers can be
granted the additional authority to make corrections as needed. Buyers that are granted
this authority will be able to make corrections to approved Work Confirmation.

3.3. Oracle Procurement Contracts

3.3.1. Overview

Oracle Procurement Contracts is the enterprise application that creates and enforces
better purchasing contracts. It is a key component of Oracle Advanced Procurement, the
integrated suite that dramatically cuts supply management costs.

Oracle E-Business Suite Release 12.1 Release Content Document 5

 3.3.2. Release 12.1.1

3.3.2.1. Structured Terms Authoring in Repository Contracts

The Contracts Repository module enables customers to easily manage all their contracts
online. It provides basic contract management capabilities and global, secure visibility
to key stakeholders. Users can create Repository contracts by capturing key attributes
about the contract (like contract party, dates, amount, etc.) and manage the document
files associated with the contract. Users can also track key deliverables and contract
expiration.

With Release 12.1.1, users can now author structured terms and conditions while
creating a Repository contract. These terms are based on standard templates, clauses and
policies defined in the contract terms library. Users can also use the Contract Expert
feature to bring in additional clauses that may be required based on the business terms of
the particular contract. The contract can then be printed for signature, or exported to
Microsoft Word for redlining/collaboration with the external party. The deviations report
functionality will provide a quick overview of all policy violations in the contract.

Structured terms authoring promotes standards based contract authoring and reduces the
overall time-to-contract. Risk associated with non-standard contracts is also mitigated by
ensuring approvers have visibility to all policy violations.

3.3.2.2. Secure Enterprise Search

Business and legal users sometimes wish to locate contracts containing a certain word or
phrase. Oracle Procurement Contracts now leverages Oracle’s Secure Enterprise Search
to better search against procurement, sales, and repository contracts. Business and legal
users can perform full-text queries in conjunction with structured data queries.

Secure Enterprise Search provides flexibility to match user entered keywords to search
both structured text, such as contract terms, and unstructured text, such as text contained
in attached documents. Additional structured contract attributes may be used to further
refine the search, and include: contract number, contract name, supplier/customer/party
name, contract status, start date, and end date. Unstructured data/text search
functionality requires licensing of Oracle Secure Enterprise Search (SES).

3.3.2.3. Deliverable Payment Holds

Engineering and Construction (E&C) firms have unique requirements regarding
subcontractor management, subcontractor payment, and customer billing. Pay When
Paid is a payment term common in this industry, where sub-contractors are not paid until
the customer pays the general contractor. In addition, it is sometimes necessary to require
subcontractors to maintain specified insurance coverage and other work related
certifications. The general contractor frequently reserves the right to withhold payments
to subcontractors until proof of insurance or proof of certifications has been provided.
The following features enable users to track such requirements and to automate the
payment hold process.

This feature requires additional products to be licensed for full functionality described
below, including Financials and Services Procurement.

3.3.2.3.1. Payment Hold Deliverables

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 Tracking insurance and certification requirements is often a cumbersome and
manual process. Deliverables will be used to track these requirements. Initiate
Payment Holds functionality will provide users the ability to initiate payment
holds on all future invoices when a deliverable approaches its due date or when a
deliverable becomes overdue. For example, a subcontractor may be required to
be licensed yearly. To ensure that licensing happens, the buyer or project
manager can define a deliverable to hold all payments if the subcontractor fails
to renew his license.

3.3.2.3.2. Payables Integration

In Release 12.1.1, new hold and release reasons are seeded in Oracle Payables.
A “PO Deliverable” hold can be placed on all supplier invoices that are matched
to a purchase order that has a deliverable with payment hold terms and is nearly
due or is overdue.

Releases may be automatic or manual. A concurrent process automates the

release of PO Deliverable Payment holds. The process is submitted
automatically when the user updates the Due Date for a deliverable that is within
the defined payment hold terms. Project managers can also use the
Subcontractor Payment Management Workbench to manage Deliverables. A
Payment Hold Status and Payment Indicator allow users to quickly see whether
all deliverables have been met and determine whether payments can be made to
the subcontractor. Project managers can override the automatic payment holds
caused by overdue purchase order deliverables.

3.3.2.3.3. Support for Pay When Paid Scenarios

Many construction firms adhere to a “Pay when Paid” policy for subcontract
agreements, in order to manage cash flow for a project. Specifically,
construction companies will hold the payment of subcontractor bills until the
construction firm has been paid by the owner. Now, a Pay when Paid payment
term may be specified for a subcontract to automatically result in the placing of
holds on all subcontractor invoices under that subcontract until the
corresponding customer payment is received.

A new Subcontract Payment Controls workbench allows the project manager to

manage these holds, with visibility into both the customer invoices and the
associated subcontractor invoices. Alerted by workflow notifications once the
customer payment is received, the project manager can then choose to
automatically or manually release the corresponding subcontractor invoices. The
associations between the customer invoices and the subcontractor invoices may
be automatically maintained based on the billing of project expenditures in the
case of a cost-plus contract, or manually maintained for fixed price contract
scenarios.

3.3.3. Release 12.1.2

3.3.3.1. Author Individual Clauses in Microsoft Word

Legal clauses are typically managed in Word documents. Organizations using Oracle E-
Business Suite for their enterprise contract management need to be able to create and
update clauses using a rich text editor such as Microsoft Word.

Oracle E-Business Suite Release 12.1 Release Content Document 7

 With 12.1.2, users can directly create and edit the clauses in Microsoft Word leveraging
additional formatting features. Importing clause text from Microsoft Word and
exporting clause text to Microsoft Word for edit have been incorporated into both the
Contract Terms Library and the Contract Authoring Flow. The following formats will be
preserved as defined in Microsoft Word:

• Bold, italic, text color, and underlines

• Standard bullets available in Word

• Numbering schemes (roman numerals, alphabets, numbers) and their indents

including hanging indents

• List items with non-numbered text between them

• Indent and tabs (Tab spacing/width is determined based on style sheet

information)

• Line spacing

• Text alignment (left, right, and center justification)

• Table formatting

• Hyperlinks, page breaks, and symbols defined in Unicode

This feature requires Microsoft Word Professional 2003 or 2007.

3.3.3.2. Project Manager Dashboard for Maintenance of Procurement Deliverables

A new feature in Release 12.1.1 provided support for the tracking and monitoring of
subcontract deliverables that place automatic holds on subcontractor invoices in the case
of non-compliance. For example, if a subcontractor fails to provide their insurance
certificate in a timely fashion per the subcontract terms, holds are automatically placed
on incoming invoices based on the contractual deliverable. Upon complying, the hold is
released.

Also in 12.1.1, a new Payment Controls Workbench in Oracle Projects allows the project
manager to view a checklist of all subcontract deliverables to assist in evaluating the
subcontractor status prior to releasing monthly progress payments.

Project managers are frequently responsible for subcontractor management. In 12.1.2,

the Payment Controls Workbench has been enhanced to allow project managers to
directly update subcontract deliverables. A project manager with proper security
privileges can update existing deliverables or define new deliverables to track future
subcontractor obligations. A project manager can also apply payment holds even when
the “Pay when Paid” attribute has not been checked.

This feature has a prerequisite of Oracle Projects.

Oracle E-Business Suite Release 12.1 Release Content Document 8

 3.4. Oracle Purchasing
3.4.1. Overview

Oracle Purchasing is the application for procurement professionals that streamlines

purchase order processing while strengthening policy compliance. It is a key component
of Oracle Advanced Procurement, the integrated suite that dramatically cuts supply
management costs.

3.4.2. Release 12.1.1

3.4.2.1. PO and Requisition Mass Update

Oracle Purchasing includes a new capability to mass update buyer, approver, and deliver-
to person information in Purchase Orders (PO) and preparer, requester and approver
information on requisitions to streamline the process of maintaining organizational
changes.

A new program, Mass Close of Purchase Document, allows users to mass close Purchase
documents. The Mass Close functionality applies to Purchase Orders that have been fully
processed i.e. batch processing has completed, but are not in the closed status as well as
for Purchase Orders that the user needs to manually close. The program is applicable to
Standard Purchase Orders, Blanket Purchase Agreements, Planned Purchase Orders and
Contract Agreement and Blanket Releases

3.4.2.2. Enable All Sites for Global Contract Purchase Agreements

A new feature “Enable All Sites in Global Contract Purchase Agreement” has been
introduced to allow Contracts to be referenced from any of the valid supplier sites while
creating standard PO and requisitions. This allows broader use of GCPA, such as for
suppliers with many valid sites in a single master agreement.

Additionally, a profile option has been added to allow a Requisition or Standard

Purchase Order to reference a GCPA from any of the Supplier Sites while the GCPA is
being amended. By default, the profile option is set to “No” to preserve current
behavior.

3.4.2.3. FPDS-NG Integration

Most U.S. Federal Government agencies must track and report their contract activity in a
variety of ways, including publishing certain contract activity to the Federal Procurement
Data System – Next Generation (FPDS-NG). Oracle Purchasing Release 12.1.1 provides
support for integration with FPDS-NG by ensuring that required contract and vendor data
elements are captured in the system and that submission data passes all required FPDS-
NG validations.

3.4.3. Release 12.1.2

3.4.3.1. Purchase Order Pricing Enhancement

Oracle Purchasing has extended its integration with Advanced Pricing to provide greater
granularity and flexibility in pricing orders and agreements. The extended integration

Oracle E-Business Suite Release 12.1 Release Content Document 9

 also provides greater transparency to the means by which a price has been determined for
orders and agreements.

Oracle Purchasing users can now:

• View the pricing modifier information for a purchase order and/or Global Blanket
Purchase Agreement line and view the pre-calculated price adjustments applied by
the price engine.

• Manually enter a price modifier, change modifier rate, and recalculate the price.

• Query existing manual modifiers and apply them to a Purchase Order and Global
Blanket Purchase Agreement unit price.

• Change the modifier rate and apply changes to PO or Global Blanket Purchase
Agreement Line.

These new features provide an accurate view of pricing information to the buyer,
increased flexibility for buyers to price an order, and streamlined supplier
communication on prices.

3.4.3.2. Project Security within Oracle Purchasing

It is common in project-centric industries like Engineering and Construction for buyers
to be assigned to projects rather than to commodities or item categories. Buyers only
have authority to transact on behalf of the projects to which they are assigned. To help
enforce this business rule, project level security is being introduced in Oracle
Purchasing. When the new security option is enabled, procurement users will only be
allowed to view and update procurement documents that are related to a project on which
the user has an active role.

This feature has a prerequisite of Oracle Projects.

3.4.3.3. Procurement Web Services – Purchasing

This feature exposes business logic contained within user forms through Java APIs.
These web services are cataloged in the Oracle Integration Repository and can be
browsed though Oracle Integration Repository Browser Interface under the respective
product family node. By clicking on the Business Entity in the Integration Repository,
you can view a full description, a list of web services for that business entity along with
the description of the web service. The description of parameters can be viewed from
the xsd definition of the service available via the generated wsdl.

As part of 12.1.2, the following web services are provided for Purchasing:

• Purchase Order: Cancel Purchase Order, Create Purchase Order, Delete

Purchase Order, Approve Purchase Order, Query Purchase Order, and Update
Purchase Order

• Requisition: Create Requisition, Delete Requisition, Query Requisition, and

Update Requisition. Note that these support requisitions in iProcurement as well
as Purchasing.

Oracle E-Business Suite Release 12.1 Release Content Document 10

 3.4.4. Release 12.1.3

3.4.4.1. Landed Cost Management (LCM) Integration

Oracle Landed Cost Management gives organizations financial visibility into their
extended supply chain costs including transportation, handling fees, regulatory duties
and taxes and helps them to determine the landed cost of the material for transactional
purposes. This allows organizations to have better control over procurement costs,
maximize profits, increase competitiveness, and ensures that complex trade activities are
compliant with regulatory mandates.

This integration allows purchasing users to simulate the Landed Costs at the creation
time of purchase orders, allowing better procurement decisions based on the estimated
Landed Cost of the items.

3.4.4.2. Asset Lifecycle Management (ALM) Integration

In EBS Release 12.1.2, the implementation of encumbrance reversal for SCM was
limited to Inventory and Expense Receiving transactions. Now in Release 12.1.3, this
functionality has been extended to ‘Shop Floor’ destination Purchase Orders, where the
distributions will be created under WIP transactions. Purchasing will support
encumbering funds for Purchase Orders generated from eAM (with a ‘Shop Floor’
destination) during the approval process.

All public sector organizations, such as municipal, state, provincial and federal
government organizations are required to encumber or reserve funds that have been
committed to a supply purchase order. Therefore, prior to approval of any purchasing
document, the available funds must be checked and reserved against the available budget
for the specified account code combination. This enhancement is key for budgetary
control.

3.5. Oracle Services Procurement

3.5.1. Overview

Oracle Services Procurement is the application that enables complete control and
oversight for services spending. It is a key component of Oracle Advanced Procurement,
the integrated suite that dramatically cuts all supply management costs.

Oracle Services Procurement further streamlines all aspects of the acquisition process for
complex services including:

• Negotiation of service contracts with emphasis on terms related to contract

financing and progress payment arrangements

• Tracking of work progress against agreed schedule in the contract

• Processing of payment requests

Oracle E-Business Suite Release 12.1 Release Content Document 11

 By supporting real time online collaboration involving key stakeholders throughout the
lifecycle, organizations can significantly improve the acquisition process of this
important spend category.

3.5.2. Release 12.1.1

3.5.2.1. Time Reporting and Contractor Assignment Flexibility

For Services Procurement, Release 12.1.1 is focused on customer driven enhancements
delivering greater flexibility for time reporting and contractor assignment. Key
capabilities included maximizing preferred supplier savings, cutting processing costs,
eliminating over-billing and providing visibility into services spending. Oracle continues
to enhance and streamline the workflow for Contingent Workers by:

• Allowing multiple PO and PO lines to be associated with each assignment so

that when workers are extended and a new requisition is added to an existing PO,
a new PO line is automatically created.

• Enabling workers to charge time to multiple projects referenced on a PO line

associated to the workers HR assignment.

3.5.3. Release 12.1.2

3.5.3.1. Oracle Projects – Work Confirmations

The workflow for work confirmations, in Release 12.1.2, is more flexible and supports
additional ways to record and display progress. Key benefits include:

• On a work confirmation for a PO, users now have the ability to enter
incremental or cumulative progress values, as absolute amount or percentage

• Users now have the complete visibility to the progress as they can view the
absolute and percentage values for both incremental and cumulative progress.

3.6. Oracle Sourcing

3.6.1. Overview

Oracle Sourcing is the enterprise application that improves the effectiveness and
efficiency of strategic sourcing. It is a key component of Oracle Advanced Procurement,
the integrated suite that dramatically cuts all supply management costs.

Oracle Sourcing enables buyers to source more of the organization’s spend at lower total
cost. Oracle Sourcing creates immediate savings through rapid deployment, and ensures
long-term savings with consistent execution and compliance.

3.6.2. Release 12.1.1

3.6.2.1. Two Stage Evaluation of RFP

In certain global markets, government organizations and some private sector enterprises
often follow a formal two stage negotiation process. The two stage negotiation process
requires the submission of bids from suppliers that can be evaluated based on technical

Oracle E-Business Suite Release 12.1 Release Content Document 12

 and commercial aspects separately to help ensure fair evaluation of supplier bids. In
Oracle Sourcing, organizations can now evaluate suppliers’ bids in two independent
stages based on the technical and commercial parts of the bids.

The first stage includes the technical evaluation of all responses to questions and
parameters pertaining to the technical aspects that are used by the sourcing organization
to evaluate the technical feasibility and capabilities of the suppliers. During this stage,
commercial aspects remain sealed so that they do not influence the decision making
process. For bids that fail the technical evaluation, the commercial part will remain
sealed. Evaluators can then analyze the commercial aspects (such as price and delivery
terms) for only those bids passing the technical stage.

By adding support for two stage RFP in Oracle Sourcing, organizations can help ensure a
more impartial evaluation of supplier bids based on the independent evaluation of the
technical capabilities and then the commercial terms of a supplier’s bid.

3.6.2.2. Two Stage RFQ – Surrogate Bids

The new two stage RFQ process also includes Surrogate Bidding support, allowing a
buyer to enter, in stages, bid details on behalf of a supplier(s). During the first stage, the
buyer is able to enter the surrogate quote with all the required technical details but
without price information. Once all of the supplier bids have been received, technical
scoring is done against the requirements and attributes in RFQ. For those suppliers that
score well in the technical round, their bids will be short listed for the commercial round.

During the commercial round, the buyer can then complete the surrogate bidding process
for those suppliers not carrying out their own bidding. The buyer is able to enter the
commercial terms provided by a supplier to enable scoring for the commercial round to
be completed. Upon approval of the quote, it is short-listed for placing the purchase
order or contract.

3.6.2.3. Supplier Response PDF

Organizations often have the need to keep a physical record of a supplier’s bid response
for audit, reference, or offline review purposes. Oracle Sourcing Release 12.1.1 adds the
ability to generate a PDF version of a supplier’s response, which allows suppliers to print
the PDF for draft and submitted bids. In addition, buyers can print the supplier bids
allowing buyers to review responses offline or to save for their internal records.

3.6.2.4. Enhanced Spreadsheet Support

In Release 12.1.1, Oracle Souring provides an enhanced XML spreadsheet format to
support a standard look-and-feel and streamlined usability of the spreadsheets for
supplier response creation and analysis/award. Buyers and suppliers can download all
the information in one single spreadsheet, simplifying the loading and maintaining of
spreadsheets for a negotiation.

Oracle E-Business Suite Release 12.1 Release Content Document 13

 Response – Lines

Bid Total
Calculated
Instantly
Line Filter

Predefined
List of
Link to Values
Scoring
Worksheet

2 Copyright © 2006, Oracle. All rights reserved.

Fig. 1: Line Level Response for Suppliers

The spreadsheets for supplier response creation not only has an improved and user
friendly look and feel, but it can provide immediate feedback to suppliers through the
robust formulas used to calculate scores, even when they are not connected to the
system. The enhanced spreadsheets will allow buyers and suppliers to enter the data
more efficiently and reduce the number of errors during data entry in the offline
environment, thus improving the overall user experience during the process.

Analysis – Lines
Overall Savings
Calculated Instantly

Side-by-Side
Bid
Comparison

Perform
What-If
Analysis

Award and Savings

Amount per Supplier
Calculated Instantly

4 Copyright © 2006, Oracle. All rights reserved.

Fig. 2: Buyer Analysis of Bid Responses from Suppliers

Oracle E-Business Suite Release 12.1 Release Content Document 14

 Buyers also have a more powerful tool to conduct analysis of supplier responses and
make smarter award decisions. Buyers can easily view totals and savings, conduct what-
if analysis of different award scenarios, and view side-by-side comparison of all
elements of supplier responses.

3.6.2.5. Countdown Clock

In fast-paced auctions, the countdown clock will help to promote more competitive
behavior among suppliers. Suppliers will know the exact amount of time left to create
and submit their bids or quotes. The countdown clock updates automatically if there are
changes in the negotiation close date (for example, if AutoExtend is triggered). The
performance of the countdown clock is also optimized so that unnecessary use of
network bandwidth is minimized. Buyers who monitor the negotiations from Live
Console will also be able to monitor precisely how soon the negotiation will be closing.
Buyers who monitor supplier activities will also see the time ticking down without
manually refreshing the page. In addition to auctions, the countdown clock will apply to
additional negotiation types of RFQ and RFI.

3.6.2.6. Price Tier Enhancements

Suppliers have flexibility to offer different unit prices depending on the volume of
business that the buyer is willing to commit for a given product or service. Typically, a
supplier will provide preferential pricing for a larger volume purchase. Quantity based
price tiers allow buyers to specify different price points for each quantity range on
negotiations with standard purchase order, blanket or contract purchase agreement
outcomes. Suppliers can respond to the tier structure defined by the buyer, or they can
provide their own price tiers.

Users can define quantity based price tiers when creating negotiations for Blanket
Purchase Agreements. Buyers can select whether they want to have price breaks,
quantity based, or no price tiers in the negotiation. When price tiers are enabled, buyers
can define the quantity range and the target price for each tier within a line. Similarly,
suppliers can create their own price tiers when they submit a bid. The award price is
based on the tier that corresponds to the award quantity assigned to each supplier.

3.6.2.7. Cost Factor Enhancements

Cost factors allow buyers to model the total cost of a product or service. Cost factors
operate under one of these three pricing basis: (1) per unit cost (2) percentage of the unit
price (3) fixed amount for the line.

This enhancement improves the calculation of the per unit total cost when fixed amount
cost factors are used and the buyer awards a supplier a quantity that is either equal to or
lower than the response quantity. Whereas before Oracle Sourcing used the response
quantity to calculate the per unit total cost, the new formula utilizes the award quantity to
distribute the fixed amount cost factor resulting in a more accurate award amount
calculation.

3.6.3. Release 12.1.2

3.6.3.1. Earnest Money Deposit

In certain global markets, particularly in APAC and EMEA, government organizations
and some private sector enterprises often follow a formal process of taking EMD

Oracle E-Business Suite Release 12.1 Release Content Document 15

 (Earnest Money Deposit) from their suppliers. A supplier, unless exempted, has to pay
the EMD amount to the buying organization in order to participate in any Sourcing
negotiation. This EMD amount is usually refunded after the negotiation is completed.
Buying organizations can leverage these capabilities to ensure the supply base is
seriously interested in providing a competitive bid.

Oracle Sourcing supports various EMD payment methods, namely:

a. Cash
b. Check (Cheque)
c. Demand Draft
d. Corporate EMD. Corporate EMD is a practice where a supplier deposits a large
amount with the buying company and the EMD is adjusted against this amount.
e. Bank Guarantee

EMD is received by the EMD Administrator, a new responsibility made available for
EMD transactions, or can be paid online by the suppliers (Corporate EMD).

The EMD Administrator can exempt a supplier from paying EMD, or refund or forfeit
the EMD amount, depending on the business policies.

There is an out-of-the-box integration with Oracle Financials, so that the receipt, forfeit
and refund of EMD can leverage Oracle Receivables and Oracle Payables. For customers
not using Oracle Financials, there is a non-integrated EMD deployment process where
the company can still use the EMD feature in Oracle Sourcing. There are reports
available for the buying organization to validate the EMD status and details for different
negotiations and suppliers.
This feature in Oracle Sourcing ensures that the end-to-end sourcing process for the
buying organization can be performed using Oracle Sourcing application, and customers
will not have to rely on processes outside the application to complete their sourcing
negotiations. This shortens the sourcing cycle which otherwise can lead to delays in
receiving and returning the EMD amount and affects the productivity of buying
organization due to manual checks and coordination. Also, all EMD related information
is retained in the application which can be leveraged for future reference and audit
requirements.

3.6.4. Release 12.1.3

3.6.4.1. Requester Field in the Sourcing Header

At times, there is a need to capture the name of the business owner of the negotiation or
in the case where the owner/sponsor is separate from the person running the negotiation.
The requester field is available in the negotiation header (RFI, RFQ and Auctions).
The default value is the buyer, but it can be updated as shown in the screenshot below.

Oracle E-Business Suite Release 12.1 Release Content Document 16

 Fig. 3: Requester Field in the Sourcing Header Page

Please note that the field, by default, is not available in the application and can be made
available though personalization.

3.6.4.2. Descriptive Flex Field (DFF) in Oracle Sourcing Header

Often, buyers have a need to provide additional information on the header page, for
example, information on contract value, final project approver, etc. Headers attributes
are of two types: a) Visible to Buyers only (who have access to negotiation) and b)
Visible to both the buyer and supplier. As shown in the figure below, there are two DFFs
in the negotiation header page which helps to capture these attributes:

- Additional Header Attributes (Buyer Only)

- Additional Header Attributes (Buyer & Supplier)

Fig. 4: Descriptive Flex Field in Oracle Sourcing Header Page

The buyer can create different contexts which will control the different attributes
displayed. For example, in this case the context additional supplier information selection
displayed the contact address, contact number and budget sanctioned attributes. These
fields can be used to convey additional negotiation related information to the buyer and
supplier community.

Please note that the DFFs, by default, are not available in the application and can be
made available though personalization

Oracle E-Business Suite Release 12.1 Release Content Document 17

 3.6.4.3. Landed Cost Management (LCM) Integration
Customers sourcing overseas (25% or more) find that the item cost (procurement price)
accounts for more than half of the cost to acquire the product. From a strategic sourcing
perspective, Oracle has tried to give users some visibility into these potential costs,
however, at PO creation time, users need the same and even more refined insight. The
integration with Landed Cost Management (LCM) allows them to make more tactical
decisions about how to source an item. Additionally, it gives an organization better and
early visibility into what their potential liabilities might be. For bigger ticket items
(heavier or bulkier goods), users can run through a number of different scenarios and
compare the potential output before firming up the estimate. Then, once they prepare to
receive an item, they can use this estimate as basis for that receipt. With LCM more
closely tied to Procurement, Oracle is giving customers the information they need to
make better tactical decisions and is giving them early insight into their outstanding
liabilities. In fact, many of our customers don't want to approve a PO without having
visibility into this. Finally, we observed that virtually all retailers, wholesale distributors
and customers require this functionality and have modified their systems to give some
visibility into this today. When faced with an upgrade, they will have to migrate these
solutions to R12 or will need a solution like LCM.

3.7. Oracle Sourcing Optimization

3.7.1. Overview

When allocating business to suppliers, buyers often must strive to meet multiple
purchasing goals and business policies. For example: “award at least 10% business to
minority-owned suppliers,” “no single supplier should get more than 80% of the total
business,” or “at least half of the business should go to incumbent suppliers”. It can be
challenging to achieve maximum savings while meeting such business policies,
particularly if there are many line items and a large number of competitive bids.

Oracle Sourcing Optimization can help by allowing the buyer to create scenarios that can
be automatically optimized to determine the best award, while adhering to policies and
goals defined on the scenario. This results in better and faster award decisions.

3.7.2. Release 12.1.1

3.7.2.1. Sourcing Optimization Enhancements

Sourcing Optimization has several enhancements to assist buyers in making optimal
award decisions.

Buyers can now determine a constraint priority for award optimization by indicating the
importance of a given constraint. The concept of setting up priorities for constraints will
help the optimization engine identify which constraints can be automatically relaxed
when, otherwise, no solution exist. By automatically relaxing a constraint, the engine
may find an acceptable solution, saving the buyer time and avoiding an iterative process
for optimizing.

Upon optimizing a scenario, buyers will be able to analyze the cost of a particular
constraint. Buyers typically want to evaluate by how much an award decision results on
a more expensive award because of a business constraint (i.e., the additional cost

Oracle E-Business Suite Release 12.1 Release Content Document 18

 imposed by a business constraint). Cost of constraint refers to the difference in price (or
cost or score) that occurs in an optimized award solution vs. what would be achievable
were that constraint removed. Oracle Sourcing will now simplify the cost of constraint
analysis by allowing buyers to select the constraint that they want to evaluate and
returning the cost associated to the selected constraint. With the cost of constraint
feature, buyers can determine how much more expensive is an award decision because of
a business constraint.

Buyers will also have the ability to view award optimization scenarios side-by-side to
compare the results of different optimization approaches. Buyers will select what
scenarios they want to display side-by-side and Oracle Sourcing will show award
amounts and savings for those scenarios. Buyers will be able to effectively see the
before and after effects of changes made to the optimization criteria and/or weightings
when reviewing optimization results.

With Quantity based constraints, buyers can now indicate award allocation not only in
terms of award amount, but also in terms of award quantity. For example, 15% of all
units should be awarded to minority owned suppliers allowing for more control over the
optimization constraints.

3.7.2.2. Price Tier Optimization

Suppliers typically have their own price tiers that meet their business realities. Analyzing
dissimilar tier structures is a very complex and time consuming activity. This process is
greatly streamlined by the use of Oracle Sourcing Optimization. When Oracle Sourcing
Optimization is used to find the best award scenario in a negotiation, the optimization
engine analyzes all combinations of price tiers submitted by suppliers to determine the
best award recommendation. Award quantities specified in the award recommendation
are used to assign the correct unit price to the resulting purchasing documents.

3.7.2.3. Supplier Incentives

Suppliers often provide incentives to increase the level of business transacted with the
buying organization. The incentives can be in the form of a fixed amount (e.g., signing
bonus), a tiered rebate structure (e.g., rebates that occur when a predetermined level of
business is reached), or both. These additional savings through incentives may directly
impact the award decisions that buyers make. How much business a buyer awards to
each supplier determines whether additional rebates apply, and, therefore, the additional
savings need to be factored in the award scenario analysis.

Oracle Sourcing Optimization allows buyers to enter the incentives given by suppliers.
Buyers can enter the current total spend and rebate percentage for each supplier, and the
rebate structure for any extra award made on top of the current spend. In addition, a fixed
amount incentive can be specified to account for a signing or transition bonus. Oracle
Sourcing Optimization uses these values to calculate the additional savings yielded by
the incentives, and adds the amount to the total savings in the award scenario. Buyers can
then use the information to make more informed award decisions.

3.8. Oracle Spend Classification – New Product

3.8.1. Overview
One of the biggest benefits from business intelligence applications that analyze spend
derives from the consolidation of spend data from multiple sources. Whether from many

Oracle E-Business Suite Release 12.1 Release Content Document 19

 sources, or just one, it is generally true that spending data is inadequately categorized for
use by procurement. One of the reasons is an emphasis on recording accounting
information, which often reveals little of the purchasing category. In most organizations,
a majority of spend data is not categorized, categorized incorrectly, or categorized as
miscellaneous. This leads to a skewed picture of the breakdown of spend, resulting in
poor visibility to identify saving opportunities.
Oracle Procurement and Spend Analytics (P&SA) includes adaptors that load data from
many sources, including Oracle E-Business Suite 11i9, 11i10, R12, Oracle Peoplesoft
Enterprise 8.9, 9.0, legacy, and other sources.

Spend Classification processes the data contained in P&SA and predicts appropriate
category information for each invoice line. To be able to do the predictions, Spend
Classification uses existing categorized data from PS&A to create a knowledge base.
Features in Spend Classification allow data stewards to test and validate the learning
performance, ensuring the knowledge base is performing classification at adequate
levels. Once the knowledge base has been built, the product can be used to classify
spend data residing in P&SA.

Fig. 5: Oracle Spend Classification, Classification Summary Page

3.8.2. Release 12.1.2

3.8.2.1. Integration with Procurement and Spend Analytics 7.9.6

Spend Classification is integrated with Oracle Procurement and Spend Analytics 7.9.6
(P&SA), a component of Oracle BI Applications. It processes data from OBIA tables for
invoice, purchasing, and requisition information. After Spend Classification predicts
purchasing categories for spend lines, it reassigns categories in P&SA where it has a high
confidence rating of a successful match.

Oracle E-Business Suite Release 12.1 Release Content Document 20

 3.8.2.2. Knowledge Base Creation and Incremental Updates
Spend Classification uses a sample of existing and accurately categorized spend data to
learn successful categorization based on a wide range of an organization’s data. The
product allows the users to enrich the knowledge base with incremental data as data
evolves to increase classification accuracy over time.

3.8.2.3. Multiple Knowledge Bases

Spend Classification provides functionality to create a standard knowledge base that can
predict categories at various levels of the purchasing category hierarchy.
Spend Classification uses Oracle Data Mining as its engine for predictive analytics.
Advanced users may use Data Mining to create any of the alternate supported Data
Mining knowledge bases and then reference these knowledge bases from Spend
Classification to process future spend data.

3.8.2.4. Easy to Use User Interface

Spend Classification uses Oracle Business Intelligence Enterprise Edition, a component
of Fusion middleware, for its user interface. Pages provide dynamic sorting of data,
column level search, and filters. Users can drill down to segments of data directly from
various Key Performance Indicators (KPIs) defined for classification results.

Fig. 6: Oracle Spend Classification, Classification Details Page

3.8.2.5. Export and Import to Excel

Spend Classification integrates seamlessly with Microsoft Excel. It allows users to
export all data to Excel in order to do offline processing. If manual updates are made in
Excel, the Excel file can be uploaded into OBIA. For example, this might be used in
cases where the user decides to manually reassign categories.

Oracle E-Business Suite Release 12.1 Release Content Document 21

 3.8.2.6. Ability to Classify Data into Multiple Taxonomies
Spend Classification can categorize spend data into different category taxonomies.
Category taxonomies that are supported include:

• The category setup in a source financials system

• UNSPSC

• Three additional custom category taxonomies

There is no restriction on the number of levels defined for a category hierarchy.

3.8.2.7. In-line Commodity Classification

At times, requesters may need to order off catalog and create a Non Catalog Request.
When requesters describe the purchase, there is a high likelihood of it not being
classified into an existing commodity hierarchy. This increases misclassification of
spend information, contract leakage, lower compliance and internal controls.

In R12.1.1 onwards, requesters creating Non Catalog Requests will have the option of
category being predicted for the purchase being made. After the requester clicks on Add
to Cart they will be able to view a “suggested best fit” category with a list of categories
that could be alternate possibilities. The same window can also be used to parse the
complete Category hierarchy. This approach uses the Oracle Spend Classification in real
time to assess the category of what the requester is ordering. The requester merely picks
the purchasing category and continues checking out. This capability allows even
unstructured requests to be categorized appropriately, aiding downstream spend analysis.

3.9. Oracle Supplier Hub – New Product

3.9.1. Overview

Many organizations track supplier data in multiple ways, driven by the needs of different
business units or unconnected business processes The result is disparate supplier
definitions that make it difficult to have a complete and coherent summary of each
trading partner.

Oracle Supplier Hub is a new application that provides a portfolio of Master Data
Management tools to enable organizations to better manage their supplier master records
centrally. Built on the foundational technology used to support mastering of customer
information, Supplier Hub can be used by both organizations that need to aggregate
supplier data from a range of application systems and also by those running a single E-
Business Suite instance.

Supplier Hub consolidates supplier information from disparate systems and business
lines into a single repository, provides cleansing and third party enrichment tools for
effective data management, and provides the resulting "single point of truth" supplier
data as a service to consuming applications, enterprise business processes and decision
support systems.

Supplier Hub is a complementary solution to Supplier Lifecycle Management (SLM). It

can be implemented to extend the SLM capabilities by providing comprehensive quality

Oracle E-Business Suite Release 12.1 Release Content Document 22

 management functionality to cleanse the underlying supplier identity information that
has been enriched through the SLM tools.

Deployment of Supplier Hub enables organizations to have a consistent understanding of

the trading partners that they use to procure the various goods and services required to
support their business. This clarity is essential in order to be able to carry out effective
analysis of spending patterns so that appropriate tactical and strategic decisions can be
made about specific supplier relationships and overall company procurement policies.

3.9.2. Release 12.1.1+

Oracle Supplier Hub provides the following set of features:

• Supplier Master Profile

• Supplier Classification Management

• Supplier Hierarchy Management

• Supplier Data Import and Source Management

• Supplier Data Quality Management

• Supplier D&B Data Enrichment

• Supplier Data Publication and Synchronization

Full details about the capabilities of the Supplier Hub application can be found in the
Master Data Management Release Content Document.

3.10. Oracle Supplier Lifecycle Management – New Product

3.10.1. Overview

Oracle Supplier Lifecycle Management (SLM) is a new application that provides an

extensive set of features to support the qualification, profile management and
performance assessment of suppliers as well as tools to track ongoing supplier
compliance with corporate and legal requirements. Utilizing these capabilities,
organizations can exercise proper control over suppliers throughout the lifecycle of their
relationship with the organization; from initial discovery, through qualification and on-
boarding, to ongoing maintenance and possible obsolescence.

A key factor in improving the quality of an organization’s supplier master file is to

establish proper processes to formally qualify different types of prospective suppliers.
Supplier Lifecycle Management enables any and all of the peculiar information required
to assess a prospect to be gathered and then routed through the organization to ensure
efficient review of the supplier’s credentials.

Once a supplier has been approved, SLM also enables organizations to gather feedback
from key stakeholders as part of an overall supplier performance tracking process. In
addition, Supplier Lifecycle Management also allows key stakeholders to identify and

Oracle E-Business Suite Release 12.1 Release Content Document 23

 track critical compliance documents and attributes that need to be gathered from
suppliers on a periodic basis in order for the two parties to maintain an active business
relationship.

3.10.2. Release 12.1.1+

3.10.2.1. 360° Supplier View

One of the challenges with managing supplier information is that the pieces of
information gathered about a supplier can be stored in a variety of applications and
systems. This data disbursement can hamper organizations as they look to review
supplier performance or to comply with audit requirements.

Supplier Lifecycle Management provides a repository for storing information from

disparate sources and then enabling a 360° view of the data to be provided to the key
business users within the organization. As well as access to basic supplier information -
such as Address, Contact, Business/Diversity Classification, General Classification,
Product and Services category and Banking details - users will be able to review
qualification and on-going evaluation details for the supplier, view key documents that
have been included in the supplier’s profile and check the status of Deliverables that the
supplier is required to provide to maintain their status within the system.

3.10.2.2. Supplier Search

To assist administrators charged with managing the vendor master for their
organizations, Advanced Search capabilities enable them to efficiently find and retrieve
supplier records.

The Advanced Search allows any of the standard and extended profile attributes to be
used as search criteria and for the results to be viewed using multiple display formats.
The profile information retrieved from the search can be exported in spreadsheet format,
modified and then re-imported to enable mass data changes to be handled in an efficient
manner. The Advanced Search criteria and display formats can be personalized both at
the administrator and business user level.

3.10.2.3. Supplier Profile Management (including Self-Service)

Most organizations maintain a team of administrators to deal with the flow of
administrative updates from trading partners containing changes to their company profile
details. To make this process more efficient, Supplier Lifecycle Management extends
existing iSupplier Portal functionality to allow supplier users to be given online access to
maintain a wider range of their own profile details.

The supplier user can maintain standard company profile details; Address, Contacts,
Business Diversity Classifications, Products and Services category and Banking Details.
Changes they provide can then be reviewed by internal administrators before approval.

Suppliers are also able to access qualification and on-going compliance information that
they are required to provide to the buying organization to maintain their status in the
system.

Oracle E-Business Suite Release 12.1 Release Content Document 24

 3.10.2.4. Extended Supplier Profile
To better understand the capabilities of suppliers in key product categories, Supplier
Lifecycle Management utilizes User Defined Attribute technology to allow
administrators to add an unlimited range of attributes to the supplier definition and to
group these into logical Profile sections. Typically, this is the sort of information stored
in paper-based systems that are maintained by different departments throughout an
organization. In addition to the attribute name, administrators are able to add descriptive
text to help explain the purpose of the attribute.

Fine-grained access control tools allow administrators to manage which users can have
access to the individual attributes in the extended set of profile details. This is
particularly important when sensitive information is stored in the profile and access
needs to be restricted to appropriate users either internally or at the supplier.

3.10.2.5. Registration and On-Boarding of New Suppliers

To help manage the stream of inquiries that come from supplier prospects interested in
doing business with the buying organization, many companies now use their corporate
websites to have potential suppliers register their interest in establishing a business
relationship. This allows the organization to get key information from the supplier that
can be used to qualify whether they are a suitable trading partner.

Supplier Lifecycle Management provides a supplier registration feature that can be

configured by business unit to gather the data elements required to assess each
prospective supplier request. The registration form can be configured to include
Address, Contacts, Business Classification, Product and Services category, Banking
detail and any of the Extended Supplier Profile attributes. The prospective supplier can
also upload attachments as part of their registration packet.

To support sophisticated and conditional qualification procedures, administrators can

also establish RFI documents that allow various profile and compliance information from
the prospect to be captured using a questionnaire format.

In addition to the walk-up process, buyers can pre-register and send invitations to
prospective suppliers, requesting them to provide additional details for pre-qualification
and approval using the self-service capability.

To support complex or lengthy supplier registration, prospective suppliers can save their
draft registration request at any time, and return to it at a later date. Once a prospective
supplier has registered, their request is routed through an approval hierarchy for review.

3.10.2.6. Qualification Management

For many organizations, the processes for assessing new supplier relationships are
cumbersome and inefficient. In an effort to ensure that “business gets done”, companies
often support multiple channels for receiving new supplier requests and then follow a
very limited or haphazard procedure to review supplier credentials. Oftentimes, this is a
poorly coordinated manual process that requires tasks to be sequenced and tracked across
multiple departments as credit checks are carried out, customer references called, quality
standards reviewed and production facilities inspected.

Supplier Lifecycle Management leverages the Approval Management Engine to allow

companies to generate customized approval flows for processing supplier requests and

Oracle E-Business Suite Release 12.1 Release Content Document 25

 registrations. The details for each new supplier can be passed to multiple stakeholders
across many departments within the buying organization.

Approvers are notified when they are required to review a request and can check
graphically the overall approval status for a given request.

As part of the approval routing, SLM includes the qualification information collected
from the supplier as well as incremental feedback provided by business users assessing
the request. This allows basic supplier profile and qualification details to be gathered,
deliverables like Insurance certificates and Code of Conduct documents to be stored and
Products and Services information to be recorded within the Qualification packet.

The buying organization can apply business rules that will use the details in the request
to customize the approval flow so that the appropriate approvers can look at the details.

Once a registration request has been approved or rejected, the supplier is automatically
notified by email. Following approval, the qualification details provided by a supplier
become part of their profile that can be updated at a later date.

3.10.2.7. Compliance and Profile Audits

Whilst there are regulatory requirements for some types of organization to keep key
supplier profile elements up to date, this is also an important process for a lot of non-
regulated organizations that are looking to meet Corporate Social Responsibility
standards that they have set for themselves.

Supplier Lifecycle Management enables administrators to utilize the RFI tools to gather
and manage supplier compliance and profile information that are required on an
anniversary basis. They can define key compliance information that is required from
suppliers and then store the feedback provided by the supplier into the supplier master
profile record.

3.10.2.8. Performance Evaluation

Companies recognize that employees who interact with suppliers can provide insightful
feedback on “soft” performance metrics for the supplier. Being able to canvas opinion
from these key stakeholders and then use the information to help drive an overall
assessment of a supplier’s performance is a key part of any collaborative program
intended to help improve supplier relationships.

Supplier Lifecycle Management will allow administrators to generate internal RFI

documents that can be sent to key personnel within the organization to evaluate and
score specific aspects of a supplier’s overall performance. This will allow stakeholders
in a diverse range of departments, such as Procurement, Finance, Supply Chain,
Manufacturing, Quality, Design and Legal, to combine their opinions into a rating of
how well the supplier is doing.

The feedback gathered about the supplier is stored in the supplier profile allowing
performance trends to be tracked and risk to be effectively managed.

3.10.2.9. Supplier Notifications

To assist with supplier communication, Supplier Lifecycle Management provides tools to
allow notifications to be selectively communicated to a company’s supply base.

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 Administrators enter notification information and then use search tools to generate the
list of suppliers that are to receive the message.

3.11. Oracle Supplier Network

3.11.1. Overview

The Oracle Supplier Network (Oracle SN) enables Oracle Purchasing customers and
their suppliers to accelerate collaboration and deliver significant efficiency savings by
conducting business electronically. Buying organizations are able to achieve quick cost
savings by leveraging the community of enabled suppliers on Oracle SN where
thousands of XML transactions are exchanged daily.

An Oracle-run service utilizing an Internet-based hub transaction model, Oracle SN

provides a wide range of features that are designed to ease the challenges of electronic
messaging.

• Single Connection: Oracle SN is a messaging hub so each organization need only

setup a single connection to get access to the community of buyers/suppliers

• Multiple Document and Transformation Support: The buying organization and

its suppliers can exchange Purchase Orders, PO Acknowledgments, PO Change
Requests, Advanced Shipment Notices and Invoices that can be automatically
converted between OAG and cXML formats

• Self-Testing: Trading partners do not have to coordinate connectivity testing.

Instead, Oracle SN allows each partner to utilize a Test Hub to send and receive
sample documents to validate their connection

• Supplier Punch-in access to multiple customer Oracle iSupplier Portal

applications

3.11.2. Version 5.0

Oracle SN 5.0 is the most recent release and offers a range of new features.

3.11.2.1. Consolidated Hub Administration

Streamlined account administration tools allow administrators to manage all the
messaging configurations for both their test and production transactions from a single
account login. Users no longer migrate account setup between hubs. Instead users
control separate transaction delivery parameters centrally for routing over the Oracle SN
Test Hub and the Oracle SN Production Hub.

3.11.2.2. Production Routing Controls

Users can restrict specific trading partners from exchanging production messages.

3.11.2.3. UTF-8 Support

UTF-8 message encoding enables Oracle SN to route messages containing multibyte
languages.

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