Oracle Advanced Procurement: Strategy, Update and Roadmap

2. Oracle Advanced Procurement: Strategy, Update and Roadmap Paulo Back, Vice PresidentBarbara Fox, Senior Director

3. Safe Harbor Statement The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decision. The development, release, and timing of any features or functionality described for Oracle’s products remains at the sole discretion of Oracle.

4. Program Agenda • E-Business Suite Update • Procurement Opportunities • Product Update and Roadmap • Product Strategy Summary • Conference Highlights

5. Oracle E-Business Suite 12.1 & 12.2 Roadmap Continued Releases & Innovation, Easy to Uptake Released Planned 12.1 12.1.2 12.1.3 12.1.3+ New Features Dec2009 Aug 2010 May 2009 12.2 12.2.3 12.2.4 12.2.x User Experience Innovation, Functional Advancements Sep 2013 Product Releases for Both 12.1 & 12.2 Financials, Procurement, Contracts, Project Manufacturing, Quality, SSHR Manager, MDM Hubs, more 16 products EBS Extensions for Endeca Time Entry, Projects, Procurement, Order Mgt, Manufacturing, Quality, Maintenance, Approvals, Employee Directory, more Field Service, Expenses Mobile Apps In-Memory Cost Mgt, Outsourced Mfg, SCEM,EBS Testing Automation In-Memory Apps& Other New Products More In-Memory Apps, Yard Mgt , Advanced EBS Testing Packs, more …..

6. E-Business Suite Support Timelines Reinforce Customer Choice to Use 12.1 or 12.2 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Dec 2019 Dec 2016 May 2009 12.1GA May 2009 Premier Sustaining Extended 1 2 Sep 2018 Sep 2013 Sep 2021 12.2GA Sep 2013 Sustaining Premier Extended Jan 2012 Jan 2015 Dec 2015 Nov 2013 Nov 2010 12.0GA Jan 2007 Sustaining Premier Extended 11.5.10GA Nov 2004 Exception Premier Extended Sustaining 3 • Support updates as of Sep 2013 • 12.1 Premier Support through Dec 2016 (from May 2014; additional 31 months) • 12.1 Extended Support through Dec 2019 (from Dec 2018; additional 12 months) • 11.5.10 Sustaining Support Exception through Dec 2015 (from Dec 2014; additional 12 months) 1 2 3 For more info, see Oracle Lifetime Support Policy: Oracle Applications

7. Oracle E-Business Suite Investment Priorities Continued Innovation for Years to Come Lower Cost of Ownership Functional Advancements User Experience Innovation • Information-Driven Navigation with EBS Extensions for Endeca • Mobile Apps • Simplified User Interfaces • OAF Enhancements for Productivity and Mobile Support • Customer Driven Enhancements • Industry Roadmaps • In-Memory Apps • New Products • Online Patching • Test Automation Framework and Content • New Capabilities on Both 12.1 & 12.2 • Leverage Oracle Technologies

8. Key Issues for Procurement in 2013 Source: The Hackett Group 2013 Key Issues Study

9. Top Priority Capabilities Desired Source: The Hackett Group 2013 Key Issues Study

10. Average 47% of Revenue on External Spend Total Spend as a Percentage of Sales, up 15% since 2004 … and Rising Pharmaceuticals 56% Financial Services 22% Aerospace & Defense 47% Semiconductor 56% Indust. Mfging. 55% Chemical 53% Utilities 39% Metals & Mining 44% DOE/NNE Contractors 46% Other Industries 48% Petroleum 43% Eng. & Const.53% Strong procurement is a fundamental fiduciary responsibility. Source: CAPS Research

11. Creating Alignment Via Key Value Drivers Source to Settle Extend Reach of Procurement Knowledge Concept to Commercialize Creation to Fulfillment demand Products Acquire to Retire Planning to Production assets supply

12. Procurement Business Process Value Driven Procurement: Supporting Complete Cycle Process Efficiency Supplier Collaboration Supplier Collaboration Supplier Management Supplier Management Data Mgmt Risk Mgmt Data Mgmt Risk Mgmt • Intelligent Spend Optimization • Collaborative Supplier Management • Predictive Risk Management Cost Savings

13. Procurement Value Generation Grow Capability over Time

14. Product Update and Roadmap

15. Procurement Progression Continuing your progression from cost management to value driven Table Stakes Expand Scope & Influence Strategic Partner

16. Business Challenges: Tablestakes Efficient Processes and Procedures • Indirect Spend • Provide User Friendly/Intuitive Application • Manage Catalog and Non-Catalog Requests • Enforce Policy • Procure to Pay • End-to-End Automation • Streamline approval process • Minimize Supplier Inquiries • Support Global Requirements • Services Procurement • Create visibility into service spending • Eliminate Over-Billing and Overruns • Support complex agreements

17. Procure to Pay Automation Eliminate Paper and Wasted Time Purchasing Professional Exception Processing Consolidate Demand Source & Allocate Receive & Reconcile Demand / Approved Requisitions Create & Route PO Review / Approve Payment Settlement Automatic Processing Financials Integration • Efficiently process demand with least manual work via demand workbench • Automatically allocate spend to suppliers via embedded sourcing rules • Speed receiving and settlement via integration to financials Suppliers

18. Center-Led Procurement Support Achieve Global Savings Via Multiple Models Request Source Buy Pay Request Source Buy Pay BU 1 BU 1 Shared Service BU 2 BU 2 BU 3 Central Sourcing, Local Execution Decentralized Automatedfinancialreconciliation Request Source Buy Pay Request Source Buy Pay BU 1 BU 1 Automatedfinancialreconciliation Shared Service Shared Service BU 2 BU 2 Complete Shared Services Transfer to Local Business Unit

19. Key Customer-Driven Improvements • MS Word Integration/ Formatting Improvements • AME Approval Management • Requisition and PO Mass Update • Web Services • Usability Enhancements • Recent Enhancements Customer Satisfaction

20. Requestor Buyer Services Procurement At-a-Glance Collaborate • Submit candidates or bids • Negotiate agreements & contracts • Input work confirmations • Update invoices / payment requests Suppliers Identify Service Requirements Review / Approve Source / Order Budget Holder • Negotiate agreements, rate cards, & contract financing • Source requisitions to negotiated agreements • Approve payment requests confirmations/ • Initiate service order • Specify service rqmts • Screen & select candidates and services providers • Track deliverables • Verify budget & policy compliance • Assess available budget and expenses • Approve work confirmations

21. Example: Procurement for Complex Services Source to Settle Support for Complex Payments • Suppliers provide timecards, receipts, and work confirmation information that are matched with agreements and invoices • Settlement drives release of recoupment of advances and retainage Define progress payments - rate, lump sum & milestone pay items

22. Key Customer-Driven Improvements Contingent Worker • Multiple Active PO Assignments • Project Selection during Time Entry Complex Work • Percent Complete Progress Entry • Work Confirmation Corrections • Recent Enhancements Customer Satisfaction

23. Endeca: Productivity with Innovative UI See More and Act Faster

24. DemoEndeca Overview Youtube Video

25. Across EBS Applications Complete Data View Key Performance Metrics Instant Search Results Search Across Organizations Search Across Applications Search On Flexfields Advanced Visualization Guided Navigation® Fully Integrated

26. iProcurement, Transformed • Increase savings by expanding use of negotiated prices • Locate items easily with searches that span all stores and catalogs • Perform side-by-side comparisons from search results to find the right product at the best price • Reduce maverick spending • Lead employees to selected vendors and approved products • Eliminate non-catalog purchase requests for catalog items • Improve the productivity of requesters and buyers • Provide a familiar on-line shopping experience and eliminate help desk calls • Present a single user-interface for all purchase types from office supplies to mobile devices to laptops

27. Professional Buyer’s Work Center Enable Command and Control for the Procurement Professional • Exceptions • Agreements • Performance Analysis Professional Buyer’s Work Center Negotiations Requisitions Contracts & Agreements PO Execution Supplier Management Invoicing & Payment • View exceptions across multiple apps & operating units • Create, implement, and execute agreements • Analyze performance of procurement & suppliers Single Access Point for All Responsibilities

28. How Endeca can Empower the Buyer Quick Searches and Summary Metrics • Perform quick searches • Guided Navigation • Search Box • Metrics provide summarized information

29. How Endeca can Empower the Buyer Procurement History and Document Details • Procurement History • Open and Closed Documents • Lead Time (Minimum, Maximum and Average) • Document Details • Requisitions • Purchase Orders • Agreements • Negotiations

30. How Endeca can Empower the Buyer Trend and Spend Analysis • Historical Trends • Price • Lead Time • Contract Vs. Off Contract Spend • Slice and Dice Spend • Category • Supplier • Item

31. How Endeca can Empower the Buyer Supplier KPIs • Number of Items procured by Supplier • Supplier Performance Trend • On Time Delivery • Quality Rating • Price Compliance

32. How Endeca can Empower the Buyer Basic Item Details and Inventory Levels • Basic Inventory Information • Current Inventory levels • On Hand Quantity • Overdue Quantity • Expected Receipts • Requisitions in Pool Quantity

33. Oracle Applications: Current Release and RoadmapOracle E-Business Purchasing and Services Procurement • Purchasing • Customer Driven Enhancements • Requisition and PO Mass Update • Pricing Enhancements • Integration Enhancements • Landed Cost Management (LCM) Integration • Asset Lifecycle Management (ALM) Integration • Web Services and API Enhancements • Services Procurement • Customer Driven Enhancements • Contingent Labor • Multiple Active Purchase Orders • Project Selection During Time Entry • Complex Work • Percent Complete Progress Entry • Work Confirmation Corrections • Purchasing • Customer Driven Enhancements • Encumbrance Accounting Enhancements • Approvals Management Engine (AME) for PO Approvals • Configurable Notifications • New Endeca Operation Dashboards • Project Supply Chain Planning • Mobile Applications for Procurement • Approvals • iProcurement • Services Procurement • Customer Driven Enhancements • Complex PO Import • Purchasing • Customer Driven Enhancements • Buyer Work Center Enhancements • CAB ERs • Customer Prioritized ERs • User Interface Modernization • New Endeca Operation Dashboards • Project Supply Chain Planning • Buyer Work Center • Contract Renewal/Administration • Mobile Applications for Procurement • Supplier Self Service • Services Procurement • Customer Driven Enhancements • Support for Inventory Items on Complex Pos • Flexible Component Receipt and Payment Schedules Release 12.1.3August 2010 What’s Next 0-12 month planning cycle Future DirectionsPost 12 month planning cycle

34. Business Challenges: Expand Scope Free resources to expend scope • Reduce Overhead Costs • Expand electronic document exchange • Increase operational agility and flexibility • Align process owners with business functions • Strategic Sourcing • Negotiate better contracts • Develop strategic supplier relationships • Leverage outsourcing & Low cost country suppliers • Spend Analysis • Capture and classify all spend • Identify saving opportunities • Use intelligence to expend purchasing scope and influence

35. Oracle Supplier Network Simplify Electronic Messaging via OSN Online Service Supplier Network Your Company Suppliers • Hosted by Oracle on Demand • Free transaction delivery service • 24 x 7 global support • Integrate out-of-the-box with Oracle Purchasing • Enable suppliers to maintain a single connection point with all OSN users • Leverage a single message format / mapping template and activate messaging in hours OAG over OXTA HTTP/S SMTP Online

36. Understanding the High Costs of Paper Manual Processing Costs are Just the Tip of the Iceberg Physical Cost of Handling Paper The Larger Paper Premium Erosion of Profit Margins • Unintentionally missed early payment discounts (1% or more) • Premiums charged to serial late payers (1.5% or more) • Undetected over-payments / double-payments Poor Cash & Payment Management • Up to 60% of invoices have errors • Lost interest on prematurely paid invoices Risk & Control Gaps • ‘Floating’ invoices create invisible and unaccounted liabilities • Delayed shipments due to late payments Electronic Transactions Cost 60% Less1 • $2B company with 100,000 invoices / yr • Wastes $1.5 million over 3 years Ex. 1. Gartner, Invoicing and Payments: The Payer Value Proposition

37. Two-Way Messaging Support Key Transactions Based on Commonly-Used Standards Supplier Network Your Company Suppliers Purchase Order OAG Process PO 007 cXML OrderRequest PO Change / Cancel OAG Change PO 006 cXML OrderRequest (update) PO Acknowledgement OAG Acknowledge PO 008 cXML ConfirmationRequest Change Sales Order OAG Change Sales Order 008 No cXML equivalent Advance Ship Notice OAG Show Shipment 005 cXML ShipNoticeRequest • Significantly reduce IT costs • Reduce errors, holds, and lost invoices • Improve supplier fulfillment time Invoice cXML Invoice Detail OAG Process Invoice 002

38. Complete and Fast Supplier Enablement Oracle Procure-to-Pay: Universal Connectivity Competitor Weakness: Limited Coverage Forgotten Middle Tier

39. Fitting the Pieces Together A Portfolio Based Approach to Enablement Network-Based Transaction Delivery for High Volume Suppliers High Volume • Begin with Oracle Supplier Network for top tier suppliers • Leverage Fusion Middleware to connect directly with other trading partners for industry-specific processes Portal-Based Collaboration for Low Volume Suppliers • Ramp participation by majority of supplier base by providing easy web-based access • Increase supplier participation with no hardware, integration or data synchronization requirements Low Volume Supply Base

40. Using Information as a Fundamental Enabler Spend Classification Organize Spend Into Logical Categories Spend Analysis p-card feeds Automate Expensive Data Management Employee Expense Analysis other Adapt to Changing Spending Patterns legacy a/p

41. Oracle Procurement and Spend AnalyticsComplete Solution for the Procurement Organization • Spend Analyzer • Understand spending patterns and savings opportunities with increased visibility into direct and indirect spend, enabling users to determine spend by commodities, products, services, suppliers and contract usage. • Procurement Performance • Understand Procurement effectiveness and monitor procurement performance on regular basis in order to identify bottlenecks and proactively take corrective action before they become major issues • Supplier Performance • Understand and track cycle times, supplier price performance, supplier scorecard, delivery performance, and product receipt quality. Decrease costs and procurement cycle times and minimize working capital. • Employee Expenses • Understand how the money related to travel and expenses is being spentby gainingacomplete picture of Employee Expenses, including approval cycle times, expenses by expense type, expense report status, and more • Sourcing - NEW • Understand the demand side and supply side economies and its impact on the Negotiations by analyzing supplier responses and the subsequent award decisions to identify trends and check if there is a margin for any savings opportunity.

42. Oracle Sourcing Roadmap Oracle E-Business Suite Supplier Network and Sourcing • New Product Delivery • Spend Classification • Sourcing • Terms and Conditions Enhancement s • Support for Attachments • T&Cs by Operating Unit • Online Discussions Enhancements • Support for Attachments • Sealed Bid Enhancements • Rollup of Lot Line Prices • Performance Improvements for PDF generation • Sourcing • Add Requisition lines to a Draft Negotiation • Negative Cost Factors • Staggered Awards • Import of Price Breaks • Sourcing APIs for creation of a draft negotiation document • Oracle Supplier Network (OSN) • VAT compliance for OSN and iSupplier Portal • Trading Partner Collaboration • Sourcing • Support for Unsolicited Lines – allowing suppliers to add lines to an offer • Mass replacement of buyer on a negotiation document • Allow update of a Sourcing document even after submission for approval • AME Enhancements for Sourcing Award Approval • Multiple Active Offers from the same supplier user New Features What’s Next 0-12 month planning cycle Future DirectionsPost 12 month planning cycle

43. Business Challenges: Strategic Procurement Common Goals and Objectives • Business Alignment • Align procurement plans with operational strategies • Provide a continuous information flow from sales to delivery • Collaborative Planning • Utilize supplier knowledge and expertise • Improve cash flow by aligning payment terms • Integrated Execution • Align delivery schedules with demand to reduce inventory • Perform trial allocations prior to schedule changes

44. Managing Supplier Information Coordinating Relationships Across the Supply Base Self Registration Invitation Profile & Pre-Qualification Search Supplier Lifecycle Management • Enrich supplier definition for qualification and assessment • Streamline registration of prospective suppliers • Central evaluation of supplier performance • Assure effective governance & risk mitigation Supplier Hub • Consolidate details for entire supply base • Generate a trustworthy 360° view • Cleanse data for better spend and risk management • Share master supplier details with spoke systems • Enrich with 3rd party data Credit & Risk Assessment Identification On Boarding Electronic Collaboration Contracts Supplier Master Data Obsolescence Administration Document Transmission Performance Analysis & Mgmt Recurring Assessments Profile, Classification, Bank Detail, etc. Retire

45. EBS Peoplesoft SAP Custom Apps External Eliminate Information Blind Spots With Supplier Data Hub • Consolidate information across heterogeneous applications • Cleanse and enrich supplier records • Share information across silos EBS Peoplesoft Trusted Master Data SAP Custom Apps BI

46. Oracle Applications: Current Release and RoadmapOracle E-Business Suite SLM and Supplier Hub • New Product Delivery • Supplier Lifecycle Management (SLM) • Supplier Hub (SH) • Supplier Lifecycle Management & Hub • Enhanced Qualification Approval Routing • Support for parallel approvals, approval groups and FYI reviewers • Dynamic Qualification Template Criteria • Criteria updates based on supplier responses • Revised Administrator and Supplier User UX • Introduction of administrator work center • Compliance Documentation Tracking • Commodity-based management of required attachments • Supplier Hub • Unified Profile Change Business Event • Supplier Lifecycle Management • Automated Evaluation Assessment • Best Practice Templates • Dynamic Invitation Lists • Supplier ToU/Privacy Agreement Tracking • Supplier Hub • Streamlined Supplier Merge • Extensible Supplier Contact Directory • Site Tagging for D&B Extract • Endeca Search for Suppliers Release 12.1.3August 2010 What’s Next 0-12 month planning cycle Future DirectionsPost 12 month planning cycle

47. Oracle E-Business Suite Investment Priorities Continued Innovation for Years to Come Lower Cost of Ownership Functional Advancements User Experience Innovation • Information-Driven Navigation with EBS Extensions for Endeca • Mobile Apps • Simplified User Interfaces • OAF Enhancements for Productivity and Mobile Support • Customer Driven Enhancements • Industry Roadmaps • In-Memory Apps • New Products • Online Patching • Automated Testing Framework and Content • New Capabilities Without Upgrades • Leverage Oracle Technologies

48. Product Strategy Summary Barbara’s Vision Integration Information Collaboration • Provide better access to information within and across applications • Continue to improve and add integration • Not only provide collaboration tools but integrate collaboration tools with the ERP applications

49. Mobility Solutions for Procurement Improving Efficiency and Response Time • Mobile Solutions Roadmap: • One-click requisition • Supplier self-service • iProcurement mobile app for browsing and shopping from item catalog • Search and view invoices, ASNs, purchase orders, receipts with alerts

50. Development Sessions at Open World 2013 • Demo Details • Advanced Procurement – W-090 • Supplier Performance and Risk Management – W-092 • Procurement and Spend Analytics – W-091 • Support: M. West Exhibit Hall L1 • Support Stars Bar: M. West, West Hall L2 Lobby