How to handle centralized procurement in EBS and how to in Fusion Application?

Prior to fusion, there were two important features introduced in E-Business Suite that helped customers roll out an outsourced procurement model:

  • Global Agreements: Enabled procurement service centers to centrally negotiate and maintain agreements on behalf of its client while still allowing usage amongst these clients
  • Multi-Org Access Control: Enabled shared service centers to easily administer orders on behalf of its clients.

The Business Unit architecture in Fusion provides two key features that promote more streamlined support for outsourced procurement operations:

  • Fusion Business Unit architecture supports maintenance of formal relationship between service providers and their clients. Service providers by means of such relationship can get access to both upstream transactions (e.g. requisitions) as well as other reference data from their clients, allowing them to initiate and administer downstream transactions on their behalf.
  • The relationship will also help service providers to roll out common policies and guidelines e.g. catalog content with negotiated terms/pricing to its clients in a controlled manner that would have otherwise required replication in prior releases.

As such in Fusion Procurement it is not necessary to tie business units to the financial structure of the whole enterprise. This assists in creating models of procurement centers of excellence that can provide service to multiple business units without any regard to their affiliation to specific ledgers or legal entities.

Fusion Procurement provides the following support that enhances and enables the above mentioned features.

  • Business units can perform the requisitioning business function and identify other business units as their outsourced service providers who would perform the procurement business function on their behalf.
  • This allows requisitioning business units to:

    • Source demand from centrally maintained supply base
    • Get access to centrally negotiated catalog content
    • o Leverage sourcing and order administration services from shared service providers
  • This allows procurement service centers to

    • Easily push sourcing policies and rules to all their client business units
    • Control access to catalog content and supply based for sourcing purposes
    • Process downstream orders and negotiations on behalf of its clients in response to upstream requisitions from these clients
    • Have streamlined access to client business unit specific reference data when administering transactions on their behalf
  • Business units performing the procurement business function only are not required to associate themselves to any particular ledger or legal entity unless they also perform other business functions that generate financial transactions. This would enable deploying companies to model their procurement centers of excellence that provide service centrally to multiple business units even across ledgers and legal entities if needed.