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Introduction to Oracle Procurement Contracts

Posted on February 11th, 2012 by Sanjit Anand ||Email This Post Email This Post

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Oracle Procurement Contracts – creates and enforces better purchasing contracts throughout the enterprise while functioning as a key component of Oracle Advanced Procurement, the integrated suite that dramatically cuts all supply management costs

Procurement contracts play a critical role in all businesses. Companies rely on procurement contracts to define:

  • Specific products or services that they buy.
  • Contract terms governing their price, shipment, payment, quality, and other mutual obligations of the involved parties.

As we Know , Oracle Procurement supports the basic business processes of the procurement contract life cycle, whereas Oracle Procurement Contracts enhances the ability of buying organizations to manage these stages by adding sophisticated contract management and compliance features to Oracle Purchasing, Oracle Sourcing, and Oracle iSupplier Portal.

The Process Flow

The following overview diagram illustrates the Oracle Procurement Contracts features that support the various stages of the procurement contract life cycle

Oracle Procurement Contract

Key Features

Oracle Procurement Contracts supports all the stages of a complete contract life cycle. The key stages of the contract life cycle are:

cONTRACT lIFEcYCLE

 

  • Establish Contract Standards : You establish company-wide standards to manage your contracts by incorporating best practices that ensure all contracts are authored and executed based on approved legal and business policies and procedures.
  • Author Contracts : When you author contract terms, you leverage standard clauses, templates, and business rules set up in the library to define contractual obligations driven by legal and business requirements.
  • Negotiate Contracts : In this phase i.e during negotiation,
    • you create sourcing documents, such as RFIs or RFQs, with draft contract terms.
    • Suppliers review, respond, and may suggest changes to the contractual terms.
    • After all parties have reached agreement, and all sourcing documents have been submitted, an award is made.
    • You track and archive all interactions with the prospective sellers for retrieval in case of disputes.
  • Approve and Sign Contracts :Next step is Approval .
    • For the contract approval and signature process, you specify and communicate the guidelines to the concerned individuals in your organization, and you authorize who can sign the contracts in your organization
  • Execute and Monitor Contracts :As you execute the contracts, you capture transactional data to enforce the agreed upon contract terms.
    • The contracts are monitored to ensure that the contractual obligations, as defined in the contract terms, are fulfilled. Alerting and escalation mechanisms are defined and adhered to.
  • Administer Changes :You define a formal contract change request process for your organization and the supplier community.
    • Take a note , Amendments to contract terms are routed to designated individuals for approval. You keep track of the changes for audit trail purposes.
  • Renegotiate and Close Out Contracts :After all contractual obligations have been fulfilled or the contract has expired,
    • you can renegotiate the contract to obtain optimal market pricing, or you can decide to close out the contract.
  • Search Contracts : The Enterprise Contracts Search feature enables you to search for keywords and text in structured data (such as contract terms) and unstructured data (such as text contained in attached documents).
    • The search is performed for Oracle Purchasing, Oracle Sourcing, and Repository Contracts.

To support the Contract Lifecycle, Procurement Contracts has following key components:

  • Contract Terms Library
  • Contract Terms maintenance and approval
  • Deliverables
  • Contract Expert
  • Contracts Repository

Is Procurement Contract a separate module

Yes, This is seprate Module and Implementaion required some additional products

For all the features to function properly, Oracle Procurement Contracts requires installation and implementation of the following modules:

  • Oracle Purchasing: PO Module provides the backbone to author, approve, amend, communicate, and print contracts.
  • Oracle Contracts: This module provides contract terms library, contract document attachment, and contract terms authoring capabilities.
  • Oracle General Ledger: Basic setup for accounting come from here and enables set up of ledgers and books.
  • Oracle Human Resources: HRMS provides organization setup information.
  • Oracle Workflow: This Module Provides notifications related to approvals of clauses, templates, and contracts.
  • Oracle XML Publisher: Provides information on setting up and using RTF and PDF templates that are used to preview and print contracts and contract templates.

The following conditional dependencies provide additional functionality but are not required for Oracle Procurement Contracts to function:

  • Oracle Sourcing: Provides complete contract terms negotiation capabilities.
  • Oracle iSupplier Portal: Allows suppliers to view contract terms and request changes.
  • Oracle E-Record: Provides electronic signature capabilities to Oracle Procurement Contracts.

In Summary:
Procurement Contracts is a powerful tool that allows you to automate your Contract Management process and seamlessly integrate it with your Procurement process.

 

Standardise your process

  • Enforce policies
  • Eliminate sub-optimal contracts
  • Reduce exposure to unnecessary risk

Streamline your processes

  • Simplify contract creation
  • Streamline approvals
  • Streamline management of contracts

Allow your users to Comply with Flexibility

  • Visibility into contracts for key stakeholders
  • Enforce contract pricing and terms
  • Track internal and external compliance

Report

  • All your information is in a single repository
  • Management reporting
  • Operational reporting
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