Implementing Oracle i Procurement at the University of Pennsylvania

1. Implementing Oracle iProcurement at the University of Pennsylvania Oracle AppsWorld San Diego, California

2. Presentation Agenda • Background • Purchasing Overview • Business Objectives for iProcurement • Implementation of iProcurement • The Penn Marketplace • Benefits of iProcurement • Benefits to Penn Faculty & Staff • Benefits to Penn Suppliers • Conclusion • Contact Information

3. Background • Oracle Financials (Purchasing, Payables & GL) implemented in July 1996 • Upgraded to Release 11i in January 2002 • First higher education institution to implement Oracle’s iProcurement application • Introduced the Penn Marketplace, Penn’s private online exchange in January 2002

4. Purchasing Overview • Decentralized point of demand purchasing environment • 1,700 iProcurement system users in 12 schools and 20 business units • Final purchase approval for transactions <$5,000 delegated to system users in the schools and business units • Final approval for transactions >$5,000 is completed in Purchasing Services • 7% of transaction & 72% of dollars • 155,000 annual PO transactions representing $550M in purchasing dollars

5. Business Objectives for iProcurement • Enhance the efficiency of the purchasing process: • Delegate requisition creation to the point of demand • Reduce time and effort related to requisition creation • Provide easy access to supplier content • Enhance the effectiveness of the central purchasing organization: • Shift focus of purchase activity to “preferred contract suppliers” • Enhance supply chain management initiatives and reduce maverick buying • Reduce cost of products and services

6. Implementation of iProcurement • Introduced to the campus community as part of the upgrade to Oracle Financials Release 11i • Delegates the item shopping and requisition creation to authorized faculty and staff at the point of demand • Enables multi-supplier ordering in a single shopping session • Oracle workflow used for requisition routing, encumbrance and purchase order approval • Provides access to the Penn Marketplace, Penn’s private online supplier exchange

7. The Penn Marketplace • The Penn Marketplace • Private online exchange for most commonly ordered products and services • Contains over 550,000 products from 31 suppliers representing 2,800 manufacturers and distributors with Penn contract pricing • Catalog content hosting and management services provided by Global Exchange Services (GXS) • Robust search tools with results displayed in a consistent format • 53% of all purchase orders processed in 2002 were issued to the 31 Penn Marketplace suppliers (25,000 active suppliers in supplier database)

8. Benefits of iProcurement • Reduces time and effort related to purchase order creation • Provides easy access to commonly ordered items • Facilitates capture of enhanced purchasing data to support future contract negotiations • Focuses purchasing attention on strategic “preferred contract suppliers” • Enables Purchasing Services to focus resources on value added activates such as supplier/contract management, cost reduction initiates, and customer relationship management

9. Benefits to Penn Faculty & Staff • Reduces time and effort related to purchasing activities • Offers item selection and order creation capability to appropriate staff in labs and departments • Enables routing of purchase requirements within organizations prior to final approval • Facilitates finding the desired items quickly and easily

10. Benefits to Penn Suppliers • Reduces administrative cost related to processing Penn purchase order and invoices • Accurate purchase order data eliminates invoicing problems and improves cash flow • Provides opportunity for significant growth in business volume • “Preferred contract supplier” status • Annual growth rate of 8 to 42% for Penn Marketplace suppliers in 2002

11. Conclusion • iProcurement and Penn Marketplace have enabled the University of Pennsylvania to: • Delegate creation of a requisition to the point of demand • Enhance our ability to manage our strategic suppliers and their catalog content • Streamline the order creation process • Reduce time and effort for faculty and staff involved in purchasing activities • Significantly increase use of the purchase system • Realize $4.5M in new product and service cost savings in 2002

12. Contact Information • Ralph Maier Associate Director, Purchasing Services University of Pennsylvania Phone: (215) 898-1452 E-Mail: maierr@pobox.upenn.edu Internet: www.purchasing.upenn.edu