Global Preparer and Center-Led Shared Services in iProcurement

An Oracle White Paper March 2005

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Table of Contents Introduction …………………………………………………… 3

A. Global Preparer ……………………………………………. 3 . Setup ………………………………………………………4 . Sample Scenario ………………………………………..…5 . Technical Details ………………………………………… 9

B. Center-Led Shared Services ………………………….……10

. Limitations and Restrictions ……………………………..10

. Basic Setup ……………………………………………... 10

. Sample Scenario ………………………………………....11

. Process Flow in iProcurement ………………………...…12

. Technical Details …………………………………..…….15 Summary ………………………………………………………16

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Introduction Business are becoming more and more global where companies are finding the opportunity to get better deals buying in high volume from suppliers located anywhere in the world taking advantage of the benefits of local organization doing the transactions. Oracle Procurement offers features to enable centralized procurement or sourcing service centers encompassing all of global business units. In 11.5.9 release, Global Agreement was introduced. In 11.5.10 release, Global Agreement concept was further expanded to include Global Contract Agreement integrated with local requisitioning, purchasing, receiving, and accounting. In 11.5.10 release, iProcurement delivers Global Preparer feature to align to the centralized Procurement trend. In this document Global Preparer and Center-Led Procurement features are deployed within iProcurement context. Details are provided to help to understand the setup for these new features. First, the Global Preparer setup and a scenario is shown. Then, the Center-Led Procurement setup and usage in iProcurement is described.

A. Global Preparer/Requester Global Preparer allows employee from one business group to raise a requisition in behalf of employees from another business group. Global Requester is the requester logging to a responsibility from other business group and ordering an item for themselves from that business group. Global Preparer can view, copy, change/cancel requisitions created by them or from another requester in a different business group depending on the value of profiles HR: Cross Business Group and ICX: Override Requestor. The security rules from Purchasing responsibility > setup > Purchasing > Document Types > Purchase Requisition is valid for global preparer and requesters.

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Global Preparer will be assigned with responsibilities from different operating units. Each responsibility will have profile MO: Operating Unit pointing to the operating unit of the Business Group. Approval will follow the preparer’s approval hierarchy. Preparer’s supervisor can belong to a different business group if profile HR: Cross Business Group is set to Yes to both users. If using Position Hierarchy, the approval list will not build automatically. Setup The main setup steps to Global Preparer to create requisitions in behalf of requesters from another Business Group or another operating units within same Business Group and to give the ability to the requestors to see the requisitions created in their behalf are: 1. Profiles to set:

1.1 HR: Cross Business Group - Defines whether Single Business Group access or Cross Business Group access is used. Set this profile option to indicate whether your installation allows resources to access data in other business groups. Enter YES to allow Cross Business Group access. Enter NO to allow only Single Business Group access (only within business group) Viewing and receiving are not restricted by this profile.

1.2 ICX: Override Requestor – Determines whether users can override the default

requestor. This setting can be limited to user only, users within the same personnel organization, or users within the same business group. Enter NO to not override requestor and not see requestors in the LOV. Enter BY ALL to override requestor cross business group. Enter WITHIN ORGANIZATION to override requestor only in the same business group.

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1.3 POR: Apply Expense Account Rules to Favorite Charge Accounts

(POR_REQ_ENFORCE_EXP_ACC_RULE) – Apply Expense Account Rules to Favorite Charge Accounts to enforce category-based accounting.

Set to YES to enforce category-based accounting rules to favorite charge account. Set to NO to not enforce category-based accounting rules to favorite charge account. This is optional for Global Preparer, but it is a feature but it is a feature that can apply if needed.

2. Business Group To check in which Business Group the employee belongs to go to Human Resources responsibility > People> Enter and Maintain Employee form and Click Assignment button, then choose Purchase Order Information tab to find the Business Group.

3. Security rules by document is from Purchasing responsibility > setup > Purchasing Document Types > Purchase Requisition. Viewing requisitions

Document Types > Purchase Requisition. Viewing requisitions depend on the security defined at the document type level.

4. To define Expense Charge Account Rules go to Procure to Pay Administrator responsibility > Purchasing Setup > Financials > Accounting > Expense Account Rules 5. Favorite accounts are defined in Preferences link from iProcurement pages at the right top. Then click iProcurement Preferences link in the left sideof the page. 6. Assign responsibilities from different operating units from different or same Business Group to the Global Preparer.

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Sample Scenario A simple scenario where a Global Preparer belonging to Vision Corporation Business Group and Vision Operations operating unit can create a requisition in behalf of a requestor from Vision France Business Group is outlined below. User: Requestor_US - Employee from Vision Corporation Business Group Responsibilities: iProcurement – Vision Operations Purchasing – Vision Operations iProcurement – Vision France Profile: HR: Cross Business Group set to Yes at the user level ICX: Override Requestor set to BY ALL at the user level POR: Apply Expense Account Rules to Favorite Charge Accounts set to Yes User: Requestor_France – Employee from Vision France Business Group Responsibilities: iProcurement – Vision France Purchasing – Vision France Profile: HR: Cross Business Group set to Yes at the user level ICX: Override Requestor set to No at the user level POR: Apply Expense Account Rules to Favorite Charge Accounts set to No

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Logged as Global Requestor user Requestor_US using responsibility iProcurement – Vision France.

Creating the requisition as the Requestor_US using iProcurement – Vision France, global requestor can see requestors from France’s Business Group in the requestor LOV

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Requisition forwarded to an approver from France Business Group, using Position Hierarchy.

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Approval history actions.

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Logged as Requestor_France and can see the requisition created by Requestor_US. From here the requisition can follow the process like a requisition created by the requestor. Technical Details Following Workflow Processes involved in Global Preparer feature:

1. Worfklow Process Account Generation (file poxwfrag.wft – item type: POWFRQAG) has three nodes to handle category-based accounting rules to favorite charge account:

. Get Favorite Charge Accpunt – Get the user’s favorite charge account. . If Enforce Expense Acount Rules – Check if the expense account rules should be enforced through profile POR: Apply Expense Account Rules to Favorite Charge Accounts

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. If Rules Exist for All Segments – Check if the expense account rules exist for all segments. 2. The Workflow procedures and functions are in the package PO_WF_PO_RULE_ACC ( files POXRUACS.pls and POXRUACB.pls).

B. Center-Led Procurement Shared Services Center-Led Procurement Shared Services is known also as Centralized Procurement. It allows to have one or more centralized locations creating Global documents to be shared/used by operating units from different Business Groups. There are many benefits in this feature like cost reduction by volume negotiation, standard terms and conditions, and other advantages by invoicing from local office of the supplier site. The two Global documents are Global Contract Agreement and Global Blanket Purchase Agreement which allows to standardize terms and conditions across all enabled organizations when transactioning with a supplier. Global Blanket Agreement was delivered in 11.5.9. In 11.5.10 Global Contract Agreement was added to enable centralized business relationships among the business groups and suppliers. Requisitions and Standard Purchase Orders can reference global documents if they belong to the operating units enabled on the document. Limitations and Restrictions Cross-Operating Unit Procuring is not supported when: . Inter-Company Transaction Flow are not defined or not valid . Encumbrance is 'ON' in either Requesting or Purchasing Operating Units. . Project/Task is specified with expense destination. . Requisition line is VMI enabled (see Oracle Inventory User Guide). . Requisition shipment has a consigned relationship (see Oracle Inventory User Guide). . Destination inventory organization is OPM enabled (See Oracle Process Manufacturing User Guide) . Master/Organization Item is not defined in the requesting or purchasing operating unit, destination inventory organization, or logical inventory organization (as defined in

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Transaction Flow). Description based items can be added to GBPA. . For Service Line Types, if HR: Cross Business Groups profile = No then the Requesting and the Purchasing Operating Organizations must be in the same business group. . Using P-card for Master/Organization items belonging to another organization. Basic setups Some of the basic setup for Global documents are: 1. Create a Global Buyer user and set profile option HR: Cross Business Group to Yes at the user, responsibility or site level. If HR: Cross Business Group profile is set to No, buyer name will be on the Purchase Order (PO), but not in the buyer LOV for the users (requesters/buyers) from other Business Groups.

2. Enable Global Document Creating Global Contract or Global Blanket Agreement check Global flag in PO forms in Purchasing responsibility. 3. Enable Organizations While creating a Global Document in Purchasing responsibility, in PO Form > Tools Menu > Enable Organizations. Choose the organizations to enable. If the document is approved, enabling organizations will requires re-approval. 4. Define transaction flows To define the procurement relationship between different operating units go to Oracle Inventory responsibility > Setup > Organizations > Intercompany Transaction Flows. Define the transaction flows according to the business process. 5. Enable receiving organization in iProcurement > Receiving > Receive Items using Personalization.

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Click Personalize link on top of receiving page. Enable Purchasing Organization column on the Receive Requisitions page. 6. Assign Purchasing and iProcurement responsibilities to the Global Buyer from each operating unit. 7. Create supplier site in each enabled organization. Sample scenario Following a sample scenario of center-led procurement: - Center-Led Procurement Shared Services organization is in US. The organization creates Global Contract Agreement and Global Blanket Purchase Agreement as a result of sourcing negotiation. Sourcing could be done using Oracle Sourcing module from Oracle Applications. - Supplier is in France. This is the supplier registered in Purchasing/iSupplier. - Buying organization is in France. It will own the Purchase Orders generated from the Global document. - Supplier Site is in Canada. This is the supplier site registered in Purchasing/iSupplier. - Demanding/Receiving organization is in Canada. It is the deliver-to location. It owns the requisition and does the receipt. This is one of multiple scenarios feasible to create using Center-Led Shared Services features. Other combinations are possible according to the business needs and processes involving worldwide procurement. Process Flow in Procurement Once Global Contract Agreement or Global BPA is negotiated, catalog can be bulkloaded or items be available from Punchout across the organizations. Requesters can search items in iProcurement and create requisitions against the Global documents.

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Going forward, all catalog content should be stored in Global Blanket Purchase Agreement. Processes involved in Center-Led Shared Services emphasing iProcurement: 1. In Oracle Inventory, define transaction flows. Transaction flows define the procurement relationship between different operating units. Create transactions flows to support advanced intercompany invoicing and intercompany invoicing for global procurement business flows.

2. Create items in Purchasing responsibility > Master Items form enabling the items to the inventory organizations across Business Groups.

3. Extract items after added them to Global Purchase Agreement

documents. Execute Catalog Extract Classifications and Items if the items are in Master/Organizations items in core Purchasing.

4. Bulkload items referencing Contract documents in iP if the items

are not from the extract process. Go to iProcurement Catalog Administration responsibility > Load Data and Schema > Upload Items. Choose Operating Unit and enter Contract Purchase Agreement.

5. Requesters from the enabled organizations can create requisitions

from punchout above or using the items from the extraction process or bulkload in iProcurement. Requestors or preparers can execute search in iProcurement and create the requisitions.

6. Purchase Orders can be created automatically or manually in

AutoCreate form by/for the buying organization.

7. Receiving center can record the receipts in iProcurement. Logged as Global Buyer and creating Global Blanket Agreement and Global Contract.

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Global Blanket Purchase Agreement created by Global Buyer. The global flag is checked.

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Global Contract Agreement created by Global Buyer. The global flag is checked.

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Enabling Global Blanket Purchase Agreement (BPA) to requesting and purchasing organizations. Once enabled the Global documents, they are available in the organizations to create requisitions and purchase orders by global buyers, global preparers or requestors. Technical Details Following the details of where changes were done to fit Center-Led Shared Services in Procurement: 1. Workflow Processes: PO Create Doc (poxwfatc.wft – item type: CREATEPO) PO Account Generator (poxwfpag.wft – item type: POWFPOAG) 2. Destination Charge Account and Destination Variance Account are in the Purchase Order and Purchase Order Summary forms at Distribution

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level. These accounts are derived by the PO Account Generator Workflow. They correspond to accounts valid to the Receiving Organization (Requesting Organization). Inter-company invoice transactions will occur automatically after receipt and deliver. 3. To support centralized procurement, the destination charge accounts are included also in the Import Standard Purchase Orders – POXPDOI. Destination charge account shares the same charge account fields (segment1, segment2…) on PO_DISTRIBUTIONS_INTERFACE table. 4. New table added for this feature is PO_GA_ORG_ASSIGNMENTS.

Summary Global Requestor and Center-Led Shared Services provide a multitude of possibilities to automate the global negotiation activities. The documents are shared across organizations allowing users to collaborate in the procurement process. Deliverables and clauses can be managed using the new feature with Contracts in Procurement. Buyers can benefit using Oracle Sourcing to source suppliers, executing auctions where suppliers are invited to participate from anywhere in the world in real time negotiation. Once supplier(s) is chosen, Global Blanket Agreement or Global Contract can be created. Suppliers can view the purchase orders as well interact in the approval and change request process from iSupplier. Procurement module from Oracle Applications encompass iProcurement including Services, Purchasing including Contracts, iSupplier, and Oracle Sourcing to give a comprehensive solution to multinational companies doing business with worldwide suppliers. In this context iProcurement contributes with Global Requestor and integration with center-led shared services to allow requisition creation and receiving be done by requestors across business groups.

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Global Preparer and Center-Led Shared Services in iProcurement March 2005 Author: Clarina Allen Oracle Corporation World Headquarters 500 Oracle Parkway Redwood Shores, CA 94065 U.S.A. Worldwide Inquiries: Phone: +1.650.506.7000 Fax: +1.650.506.7200 www.oracle.com Oracle is a registered trademark of Oracle Corporation. Various product and service names referenced herein may be trademarks of Oracle Corporation. All other product and service names mentioned may be trademarks of their respective owners. Copyright © 2003 Oracle Corporation All rights reserved.

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