September 1, 2017 | Written by: Sarosh Khan
Categorized: Thought Leadership
In most corporations, procurement events are based on reacting to needs as they are formed. What if there was a solution that allowed greater visibility, insight and understanding of buy and supply functions? What if you could know what you need before you need it? IBM’s research across corporations show a low procurement compliance of around 20%, too little spend under management of about 50%, with only 25% of organizations having competencies in place, and insufficient incremental savings of an average of 1-2x ROI. The Chief Procurement Officers (CPOs) are also facing increased pressures of regulations and security risks, while transforming their operating models for revenue growth.
Meeting today’s industry averages is not enough. The CPOs of the future are looking to digitize, automate, predict the future and enable their talent to deliver savings and value – not just to keep up, but to get ahead. Here is IBM’s transformational approach to leap frog the transformation of direct and indirect procurement:
- A. Digitize Processes: Transform from analog to digital for a seamless, responsive procurement organization
- B. Drive Insights: Enrich data for analytics and cognitive insights to make more informed decisions
- C. Amplify Talent: Elevate procurement capabilities and intelligence from ordinary to extraordinary
IBM infuses our approach to procurement transformation and Watson Platform into the Oracle Procurement and Sourcing Cloud. IBM will help you take a traditional, linear source to pay process and apply industry best practices, automation, cognitive, and analytics to deliver agile processes integrated with deeper insight. Here are the key elements to implement this approach with the Oracle ERP Cloud to drive benefits:
A. Digitize Processes
Oracle’s integrated ‘Source to Settle’ process along with its built-in collaboration tools, workflows and audit controls help digitize processes, minimize payment inaccuracies and eliminate rework and waste. As part of the transformation from analog to digital processes, Oracle ERP Cloud helps create a link between the sourcing contract and the procure to pay (PTP) processes to ensure the business adheres to contract requirements and therefore reduces overall risk exposure. Buyers and procurement managers spend a disproportionate amount of time and energy on direct and indirect spend. Here are some recommended use cases for automation:
- Automatic contract analysis by identifying clause deviations, maximizing T’s and C’s and minimizing exposure. Automatically guide sourcing managers to the right choice
- Automated processes to drive a “hands-off” spend under management, allowing sourcing and category managers to focus on higher value activities
- IBM would help drive rigorous category specific policies and industry best practices along with automated cognitive contract compliance to ensure correct price payment, including tiered discounts
- Digitization of payment processes, ensuring POs and invoices are matched automatically and exceptions follow an automated workflow.
PO automation through buying channels minimizes exceptions, ensuring an effective accounts payable process
Oracle Cloud also enables collaborative self-serve marketplaces, which ensures competitive suppliers and commodity prices and provides data insights, allowing for continuous innovation. Self-service strengthens supplier relationships and streamlines processes for collaborative demand planning, purchase order release, and electronic invoicing and receiving. Oracle’s procurement platform, coupled with IBM marketplace and benchmarks, allow sourcing managers to define the optimal requirement specifications and source with pre-defined strategic suppliers.
B. Drive Insights
IBM’s procurement solution on the Oracle ERP Cloud supports collaborative and dynamic forecasting, supply chain and install base visibility, market and customer insights, and industry knowledge. In addition, IBM’s ‘Cognitive Buying Assistant’ leverages deep market expertise, prior experience and natural language processing, to provide better insights and guide sourcing managers to the right suppliers and the right price.
Oracle’s ERP Cloud also helps establish supplier partnerships based on qualification, performance, expertise, deep insight, responsiveness and business outcomes. IBM’s Watson-enabled Oracle Procurement solution allows buyers to define optimal requirement specifications and to source with pre-defined strategic suppliers. Deep artificial intelligence also enables procurement managers to direct their spend to the optimal buying channels, allowing them to streamline their efforts and allocate skills to core activities.
C. Amplify Talent
IBM’s approach to accelerate your procurement transformation involves infusing teams with new skills, methods and assets. The Oracle Source to Settle solution guides users through the sourcing, procurement and payment processes to ensure adherence to standards and fast-track user adoption. IBM’s agile delivery model involves working alongside the client teams, identifying and removing inefficient, analog processes through automation to let our clients focus on their core areas of value.
Come see IBM at booth 1107 at Oracle OpenWorld and learn about our innovative offerings for Oracle Cloud ERP.