Beyond Spend Classification — Examining Oracle's Latest Procurement Enhancements (Part 2)

In yesterday's column examining some of the latest solution enhancements from Oracle in the Spend Management arena, I paid particularly close attention to how the provider is attempting to become more flexible with available deployment models and application delivery and integration approaches. What I did not come out and say exactly -- though probably should have based on a question I already got from someone -- is that the latest release, when Oracle delivers it in an On Demand model, frees companies from doing a fork-lift upgrade on the back-end. In other words, organizations are free to separate ERP and IT upgrade decisions entirely from a move to a hosted Oracle procurement environment. However, Oracle is not advocating such a move in every situation. In fact, they believe many companies could potentially embrace a hybrid or dual deployment strategy leveraging both behind-the-firewall and On Demand applications at the same time.

Oracle believes this dual deployment strategy might look very different depending on the customer environment. No doubt, each organization might tailor their own strategy based on its unique set of operating and technical characteristics and requirements such as data security and heterogenous systems integration requirements. I suspect that in many cases, however, that the primary driver in each decision process for On Demand vs. installed will center on a company's back-end and related upgrade situation (i.e., a company that is on an older version of Oracle financials is much more likely to embrace an On Demand version of R12.1 procurement applications than one which is currently going through a company-wide ERP upgrade).

Still, it's likely some companies will separate out the decision based on other criteria as well. For example, Oracle suggests the case of one hypothetical organization who might opt for an On Premise version of iProcurement, Purchasing, iSupplier portal and Payables but opt for hosted instances of Spend Analysis, Sourcing, Contract Management and supplier network connectivity. In all of these cases -- even the hosted ones -- it's important to note that Oracle will not rely on a SaaS-based business model that generates economies of scale from a cost standpoint or that delivers value-added network- or content-based capabilities in the solutions, at least not as this point in time.

When it comes to overall On Demand software availability regardless of back-end environment, Oracle suggested the following applications will be available in a hosted model (either by Oracle or a partner):

  • Spend classification and spend analysis
  • Sourcing and sourcing optimization
  • Contract management
  • Supplier management
  • iProcurement
  • Pre-packaged UPK (user productivity kit) for self-service and learning
  • Pre-packaged integrations to oracle ERP

In addition to these On-Demand capabilities, Oracle introduced a number of other enhancements to its latest product release in the Spend Management area. These include enhancement contract lifecycle management capability (including their stand alone contract management module), new capabilities for simplified and major systems acquisitions in the public sector and new E&C vertically focused capabilities. And perhaps most important, the new contracts release also includes an optional decoupling from Oracle's eBusiness suite to allow non-Oracle eBusiness customers (or non-iProcurement customers) the same ability to leverage Oracle contracts regardless of their back-end or tactical purchasing environment. In addition, Oracle has bundled in new landed cost management capabilities with their new release that provides estimated and actual landed costs for globally or regionally shipped goods (including freight, duties, customs, excise, etc.). This capability is also integrated with Oracle receiving and invoicing.

Oracle has also built out its supplier portal and supplier management capabilities in their latest application to better compete against SIM pure-plays like Aravo as well as other suite competitors like Ariba. At present, Oracle's supplier management capabilities incorporate a basic set of features including supplier search, the ability to invite suppliers to register, supplier self-service registration and updating, supplier profile qualification forms/templates, credit/risk assessments (integrated with third-party data sources such as D&B) as well as contract workflow integration. The last piece of news that I'll share in this column pertains to enhancements to Oracle's supplier network offering which is now available to PeopleSoft SRM customers as well. In addition, Oracle has also focused on enhanced integration to support a range of messaging standards (e.g., cXML, OAG, EDI, CSV) that procurement organizations and suppliers may use in the requisitioning, fulfillment, invoice, presentment and payment process.

How do these new capabilities stack-up to the competition? I'm looking forward to hopefully seeing some of these capabilities in action soon. Not to mention talking to reference customers as well (which I'm waiting on in these areas as well as spend classification). After I've had the chance to see the latest updates to the solution and speak to users, I'll provide more details about how Oracle's latest announced capabilities compare with others in the market.

Jason Busch

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