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Oracle Fusion Sourcing – Smarter Negotiations

Oracle Fusion Sourcing delivers the structure, tools and information you need to
maximize the value of supplier negotiations, you can negotiate enforceable
agreements that comply with policies and deliver realized savings. You can use
negotiations in Fusion Sourcing to manage your Request for Quote, Request for
Information, or Reverse Auction processes. Oracle Fusion Sourcing also provides you
with award analysis tools that allow you to quickly determine the best award decision
for your business based on factors such as price, quality and value.

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The total lifecycle of a sourcing business process begins with identifying
sourcing opportunities and key suppliers to defining and executing the
plan. Sourcing allows companies to make buying decisions as part of an
overall strategy for achieving business goals, with a view toward building
long-term relationships with key suppliers.

Oracle Fusion Sourcing in the Cloud will help you to automate your
sourcing practices to drive down your total cost, while at the same time
delivering improved efficiencies.

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With the use of Oracle Fusion Sourcing, information is integrated and streamlined
within the Oracle Fusion Procurement suite. With Self Service Procurement, you can
find requisitions to create your negotiation and when you have completed your award,
you can generate purchasing documents for further processing. When creating a
negotiation, you can surface contract terms from Procurement Contracts for suppliers
to review. With Supplier Qualification, you can search for qualified suppliers when you
are inviting suppliers to a negotiation.
Oracle Fusion Sourcing – Maximize the Value of Experts

Y ou can collaborate across your organization and with suppliers on negotiation events. Fusion Sourcing provides tools such as Online Messaging
and the Oracle Social Network to help facilitate the collaboration and communication of all parties involved. When it comes to creating an event like
a Request for Quote or Reverse Auction, we make the process much easier by providing negotiation templates that you can reuseand having a
guided negotiation creation process. Y ou can keep track of all Sourcing events with the Calendar and Recent Activity. Fusion Sourcing also
provides powerful Award Analysis tools when it comes time to make the final award decision. Oracle Sourcing provides:

Simple Event Creation:

• Guided Navigation
• Intuitive Design
• Negotiation Templates
• Negotiation Styles

Easy Collaboration:
• Oracle Social Network
• Online and Off Line Bib Submission and Analysis
• Online Messaging

Straightforward Oversight:
•Negotiation Calendar
•Activity Tracking
•Recommended Actions
•Award Analysis

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You can use the Negotiation Overview to view information that is important to daily
sourcing activities, for example:

• You can easily view recent activity and ongoing events.

• You can use your negotiation calendar to see the status of your negotiations that are
in progress.
• You can easily manage draft negotiations

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Sourcing provides many features to provide a flexible and easy process for creating
negotiations.

• Negotiation Styles simplify the data requirements and functionality

• Guided negotiation process streamlines negotiation creation
• Negotiation templates allow for reuse of best practices
• Support for three different types of negotiation – auction, RFQ, RFI
• Support for different purchase document outcomes – standard purchase order, blanket
purchase agreement, contract purchase agreement

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You can use the Request for Information (RFI) negotiation type when you want to get
information from your suppliers. A request for information (RFI) is a standard
business process whose purpose is to collect written information about the capabilities
of various suppliers. An RFI is primarily used to gather information to help make a
decision on what steps to take next. In addition to gathering basic information, an RFI
is often used as a solicitation sent to a broad base of potential suppliers for the
purpose of conditioning suppliers' minds, developing strategy, building a database,
and preparing for an RFP, RFQ, etc.

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A request for quotation (RFQ) is a standard business process whose purpose is to
invite suppliers into a bidding process to bid on specific products or services. You can
use the Request for Quote (RFQ) negotiation type for complex procurement
negotiations such negotiations having many lines or lines with detailed price
adjustments (for example price breaks). You can also use RFQs for negotiations with
extended response windows such as government negotiation that must be conducted
according to legal guidelines. Specialized response rules allow you to control the
quoting process.

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You can use the auction negotiation type for a variety of procurement situations such
as negotiations having a limited number of lines or negotiations that have a shorter
response time line. The shorter window for suppliers to submit their responses leads
to more competitive behavior based on price. In Oracle Fusion Sourcing, you can
define additional auction controls such as setting up Auto Extensions (where the
system can automatically extend the auction based on specified criteria) or stagger
the closing of lines.

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Oracle Fusion Sourcing’s intuitive user experience also benefits suppliers. A
comprehensive overview of sourcing activity makes it easy for suppliers to understand
current status and take action. Support for commonly used applications, such as
spreadsheets, makes submitting bid responses very straightforward. And Oracle
Fusion Sourcing even offers embedded online training that makes it easy for suppliers
engage in every part of the sourcing processes.

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Sourcing provides many displays you can use to monitor a negotiations progress.
These displays are updated in real time. You can access a negotiation’s displays by
clicking on the Monitor icon for that negotiation on the Negotiation Overview. With the
Negotiation Monitor, you can:

• Improve visibility with real time access to supplier activity

• Provide multiple embedded analytics for graphical view of activities and projected
savings
• Allow category managers to take action directly from the live negotiation monitor

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Manually compiling and comparing supplier proposals is time consuming and can lead
to poor sourcing outcomes. Fusion Sourcing’s Award Analysis provides powerful tools
so you can perform “what if” analysis on different award scenarios and determine the
best way to allocate your business among suppliers. Sourcing provides you with many
different award options. You can award a negotiation to a single supplier, award
different lines to different suppliers, and split a lines business among multiple
suppliers.

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Sourcing provides robust displays and graphs that allow you to perform in-depth
analysis of the supplier responses you receive for a negotiation. You can analyze
supplier response data using side-by-side and graphical comparisons. These analysis
tools let you experiment with different award scenarios, as a result you can quickly
determine the best award for your business based on multiple metrics like price,
quality and value

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There are several processes that potentially involve much date entry or manipulation.
For these tasks you can use Sourcing’s spreadsheet capability. This allows you to
download a spreadsheet and enter the necessary data and then upload the
spreadsheet back into the application. Spreadsheets allow you to perform these data
heavy tasks offline.

• Upload requirements to streamline negotiation creation

• Allow suppliers flexibility to respond offline using familiar tools
• Spreadsheet formatting support list of values, optional vs. required fields, color coding

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Your application may use the approval management system to track and manage
approvals of both your negotiation document and your award decisions. You can
approve the negotiation document, the negotiation award, or both. When approvals
are used, internal reviewers view and OK the details of the negotiation document and
the final award decision.

When the negotiation document requires approval, it can be automatically submitted

for approval when you publish the document. For award approval, you submit the
award for approval once you have saved your award decision and prior to
generating purchasing documents.

Whether a document or award needs approval depends on the approval rules. For
example, a negotiation could be subject to approval because it includes items from a
particular category, or an award decision could need approval because the award
amount is over a certain limit.

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A surrogate response is a negotiation response that you enter on behalf of a supplier
company. This feature allows suppliers who are not able to directly enter a response
online to still participate in the negotiation.

Supplier companies may submit their responses using different communication

methods such as faxing or mailing paper documents, emailing PDF documents or
spreadsheets. Once you receive the supplier response, you enter this response in the
application as a surrogate response. Surrogate responses are handled by the
application the same as responses entered by suppliers with online access.

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Throughout a negotiation, there may be times when you need to communicate with
the buying organization or other suppliers (if allowed by the type of negotiation) to
provide additional information or request clarification. You can use online messaging
for these communications.

You can participate in multiple online conversations within the context of a negotiation.
All messages you initiate are addressed to the buying organization and can be viewed
by all members of the buying organization who are also participating in the
negotiation. You can reply to message you are sent by an individual participant of the
buying organization.

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Government organizations and departments as well as other public sector enterprises
such as banks often follow a two-stage RFQ process. This process involves the
submission of two separate sealed quotes - one contains what is termed the technical
quote, and the other contains what is called the commercial quote. The technical
quote includes supplier responses to questions pertaining to the technical aspects that
are used by the sourcing organization to evaluate the technical feasibility and the
capacity of the suppliers. The commercial quote addresses the issues of price and
other factors associated with the execution of the sourced items. The technical quotes
are opened and evaluated first to determine a list of qualified suppliers, and only then
are the commercial quotes of the qualified suppliers opened and evaluated.

This two stage process is prevalent among some public sector and many government
organizations where it is sometimes mandated by law that the buying organization
offer the tender or sourcing contract to the lowest price bid from the qualified bidders.
The buying organization initially assesses the suppliers to be technically qualified
before their price quotes are unsealed and evaluated. This is done to ensure no bias
in awarding the contract.

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Sourcing Functionality – Demo and Activities

Demo – Basic Functionality

Practice – Basic Functionality
Demo – Advanced Functionality
Demo – Two Stage RFQ with surrogate response
Demo – Online Messages
Practice – Advanced Functionality

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You use the Functional Setup Manager to implement your Sourcing product. There is
a task group called Define Sourcing Configuration that contains the implementation
tasks you use to set up Sourcing. There are initial implementation tasks you perform
in FSM when first setting up Sourcing. You can also use FSM to perform ongoing
maintenance tasks after you have implemented Sourcing.

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(N) > (H) Setup and Maintenance > Manage Implementation Projects > Search on
“implement project name” > Procurement > Define Sourcing Configuration

The setup and maintenance tasks are contained in the Define Sourcing Configuration
task group.

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If the majority of the negotiations that category managers create contain the same features,
for example, line attributes, price breaks, cost factors, response controls; or negotiation data
such as negotiation lines, invited suppliers, or values for certain fields, you may want to
create a negotiation template they can use each time they create a new negotiation. A
template specifies the target negotiation type (auction, RFQ, RFI) and negotiation outcome.

Using a template saves time by streamlining the creation process. When category
managers create new negotiations using templates, they use the template as a shell for the
negotiation. They add to and edit details of the negotiation as necessary, and then publish
the negotiation.

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A negotiation style is a tool users can use to streamline the creation of negotiation. When
you create a negotiation style, you select which negotiation features to include and/or
omit. A negotiation style therefore only displays the creation features necessary to create
the particular type of negotiation. Any features not needed by the negotiation are not
displayed using that negotiation style.

For example, the style being created above does not provide instructions on the different
edit pages. It also doesn’t use requirements or a collaboration team. It doesn’t support cost
factors or price tiers, and omits procurement contract deliverables.

Additionally, you can create negotiation styles for use with any negotiation type (RFQ,
auction, or RFI), or create a negotiation style and enable it only for a particular negotiation
type.

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(N) > (H) Setup and Maintenance > Manage Implementation Projects > Search on
“implement project name” > Procurement > Define Sourcing Configuration > Manage
Requirement Section Lookup > (I) Go to task

When creating new lookups, you must specify both internal and display information:
• Lookup code - the internal designator for the lookup value
• Display sequence - the position in the list of values
• Enabled - whether the lookup value is available for use
• Start date - date the lookup value becomes available for use
• End date - the date the lookup value becomes unavailable for use
• Meaning - the value name that is displayed to users
• Description - the description displayed to users
• Tag - an optional name for use in searching.

Until the new lookup value is enabled, it cannot be used. The start and end dates can also
be used to specify a time window of availability.

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Cost factors identify additional costs in addition to response price (the price offered by the
supplier for one unit of the line item/service). Using cost factors allows buyers to identify and
take into account these additional costs when negotiating with suppliers. These can include
tangible costs, such as transportation or storage, or intangible costs, such as the risk
associated in dealing with a new supplier.
Cost factors are defined as either a
• Fixed amount for the entire line.
• An amount for each unit.
• A percentage of the line price (price * quantity)
Several related cost factors can be defined to a cost factor list. The list of cost factors can
then be applied to a particular negotiation line within the sourcing document.

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 When creating attribute lists, you can first define Attribute Groups which would be logical
names for groups of attributes. When you create your attribute list you can assign attributes
to groups.

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Line attributes make your negotiation line more descriptive and can also be used to ensure
that all responses submitted for the line include specific details not included elsewhere in
the line information. You can define line attributes at the line, lot, lot line, and group line
levels. When defining attributes, you must enter or select values for the following:
Attribute - The name of the attribute as it appears to the supplier.
Response - Values can be: Display Only, Optional, or Required.
Value Type - the data type allowable for responses, for example, text, numbers (digits with
decimals allowed), date, or URL
Target - a target value for the attribute.
Weight - an indication of the attribute's importance relative to the other attributes.
Acceptable Values - a list of allowable response values.
Score - for each acceptable value, a score denoting the desirability of that value among the
other acceptable values.

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There are many situations during the lifecycle of a negotiation when the applications
generated notifications and sends them to appropriate participants. For example,
when you invite a supplier to a negotiation, the application sends a notification to the
contact you specify in the negotiation document. This notifications invites the supplier
contact to participate in the negotiation. Or if the category manager who created the
negotiation closes it early, notifications are sent to the participants.

There are many notifications which the application creates. If you wish to use only a
subset of the notifications, you can indicate the ones you wish to use by subscribing
to those notifications . The notifications to which you don’t subscribe are not
generated by the application.

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Demo - Implementing Sourcing

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