Attempting to Be the Oracle of Oracle Spend Management (Part 4)

As I previously discussed in my first two posts on Oracle R12, many of the enhancements that Oracle chose to focus on were driven by core procurement needs to better manage the procure-to-pay process. Among these enhancements is a significantly enhanced capability around the eProcurement process that includes managing basic supplier information (not a full SIM-suite, but basic details). In fact, Oracle uses Aravo internally to manage their own supplier data if that tells you anything about how critically they view this function. Still, iSupplier Portal in R12 does offer some decent capabilities including a range of new capabilities including support for the supplier change order process and supplier onboarding. Specific to the change order enhancements are new multi-change order request capabilities, the ability to more flexibly route change requests internally and enhance supplier approval management, the iSupplier Portal takes advantages of the new UI as well.

The R12 Purchasing module forms the core of the R12 procurement suite. Here, the application serves, in Oracle's words, as the "primary interface to set and enforce procurement policy." Central to R12 Purchasing is a "Professional Buyer's Work Center" concept that brings improvements in the area of UI, hierarchy and process management. The new HTML-based UI within Purchasing provides tighter linkages to other R12 procurement modules and capabilities including surveys, scorecards, daily business intelligence, sourcing, etc. Some of the more important enhancements in R12 Purchasing include multi-organizational support for companies running a shared-services environment -- or one that requires centralized administration with decentralized execution. Integration with Oracle's e-Business tax module also now ties current tax codes and group computations within the procure-to-pay workflow, potentially eliminating manual rework. Perhaps the largest enhancement to R12 purchasing are new services procurement capabilities. But these warrant another post entirely. While I would not yet run out and recommend Oracle R12 services procurement over Fieldglass, IQNavigator, Click or ProcureStaff, it's a novel effort -- especially for an eProcurement vendor. Even SAP SRM 7.0, which will not go G/A until next year, does not quite match the capabilities in R12 that Oracle developed nearly five years before.

I briefly mentioned Oracles new optimization capabilities in a previous post, and it's worth quickly revisiting here. Based on an ILOG solver -- as are virtually all of the other sourcing optimization capabilities in the market -- R12 sourcing allows users (who have licensed the optimization package separately) to create scenarios and define basic buyer/supplier constraints at the item level. It also lets users perform what-if analyses across basic scenarios (e.g., split of business). All in all, not a bad little optimization feature set.

So how do all of these enhancements stack up to the competition? First and foremost, it's worth reiterating that R12 is a giant leap forward, but all of these capabilities are only available if you're running the same version of Oracle financials. Also, there are some challenges of the mythical single instance. By example, if you need to take down accounting, HR and procurement are going to come down as well. This approach also makes acquisition integration challenging -- unless of course, your target company happens to be an Oracle shop running the same version of the applications. But having said this, Oracle R12 procurement does compare favorably to SAP across the board -- and is superior to SAP SRM 5.0 in a range of areas. SRM 7.0 is a more difficult comparison because the final version is not out yet. I suspect in SRM 7.0 SAP will finally bridge much of the gap in the area of services procurement, but from what I've been able to glean, Oracle will remain ahead in this area. But I would give SAP the nod from an operational procurement perspective in its latest release.

What about Ariba, Ketera, Coupa, Global eProcure, Enporion, BasWare and other eProcurement competitors? I'd suggest that in each case, companies do some serious comparative work to understand the relative strengths and weaknesses of Oracle R12 compared to the others. Still, it's worth calling out that Oracle has done a noteworthy job bringing together a catalog-based shopping environment with the concept of helping the professional buyer spend less time managing the everyday transactional details while retaining the capacity to intervene when necessary. And a final thought -- if you like the look, feel and general capabilities of R12, but you're on a budget (and are willing to forgo some flexibility and functional breadth and depth), then it's worth taking a specific look at Coupa, considering that its entire management team was the development brainchild behind R12. Coupa represents their latest thinking.

- Jason Busch

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