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Services Procurement
EXECUTIVE OVERVIEW
There has been a demand for an integrated platform for services procurement
that automates and streamlines the process for sourcing, procuring and
managing the payment of services including contingent labor, professional
services and business services: facilities management, marketing.
There have been enhancements made to Services Procurement to provide such
an integrated platform in order to increase customer satisfaction, to lower
maintenance costs and to drive revenue by increasing customer adoption and
future sales.
To address current customer escalations and avoid future escalations and to
ensure customer satisfaction for future implementations, Oracle Services
Procurement supports assigning time cards to multiple projects. The contractor
skill set and the various phases of project for which the workforce is used, do
not have to be a single project is a prevalent business practice.
This has been a major pain point of customers where the Purchase orders need
to be assigned to the contingent worker via HR assignment form where only
one Purchase order can be associated to a contingent worker.
Oracle Services procurement solution provides a solution where more than one
Purchase order can be assigned to a contingent labor by simplifying the flow
without breaking the security considerations.
There are numerous occasions when business need arrives where in time entry
should be allowed for multiple purchase orders. Oracle Services Procurement
flow enables the users to create time card for multiple purchase orders.
INTRODUCTION
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preferred supplier savings, cutting processing costs and eliminating overbilling and creating visibility for services spending: end-to-end services
procurement process support integrating with Human Resources Management,
Time and Labor, and Project Management.
The entire procure to pay flow from requisition creation to sourcing to
payment (including integration to Procurement products) is automated.
Oracle service procurement provides the flexibility to users to capture job and
skill requirements, assignment information and optionally a statement of work.
It also leverages the existing infrastructure in Oracle Purchasing for automatic
conversion of approved service requisitions into purchase orders.
Hiring Managers may view and manage their contractors from iProcurement.
Critical information for each contractor such as remaining budget and amount
billed to date is summarized on a single page. Users can drill down to
supporting documents including purchase order, timecard and access to the full
requisition lifecycle.
Oracle Human Resources enable the users to manage contingent workers
differently from other workforce. The users can enter and maintain
information about the contingent workers in an enterprise and reference
purchase orders created in Oracle Purchasing to track supplier and rate
information for a workers assignment. Oracle Human Resources provides the
infrastructure to monitor and track the assignment history of contingent
workers including breaks in assignment.
Contingent workers can now input time into Oracle Time and Labor.
Timecard entries are validated against the purchase order to ensure the
timecard does not exceed pre-authorized amounts. Once timecards are
approved, the purchase order is updated, depleting the budget of the approved
time.
Contingent worker can now select any project to create a time card based upon
the project set up irrespective of whether it is associated to purchase order or
not.
Studies show that more than 50% of service invoices are not accurate. So either
vendor are being billed at a non-agreed rate or the amount of service billed is
not inline with what has been authorized. Reconciling these invoices is time
consuming.
Oracle has provided a solution where the invoices may automatically be
generated from the approved timecard thereby eliminating invoice errors.
Suppliers may view and download approved timecards through Oracle
iSupplier Portal. Invoice errors and over billing are minimized by automatically
creating invoices from service receipts.
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SET UP STEPS
iProcurement
,
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Purchasing:
For Services Procurement, the buyer can create Purchase Order for Procuring
rate based services.
The basic general Setup Tasks for procurement of services are as follows:
o
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Enable Profile option: PO: UOM class for Temp Labor Services
Set the profile option for restricting unit of measure for the line types with
a rate value basis
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Figure 4: Page Layout: Profile option for UOM Class for Temp Labor
Services
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HR Responsibility
The basic set up flow covers the following steps:
o
Create jobs:
Human Resource Responsibility: Work Structure> Job> Description.
Only jobs that are assigned a purchasing category can be procured or
negotiated through Services Procurement.
Creation of Assignment:
Assignment Tab in (N) People > Enter and Maintain > New
Create an assignment in which the details like organization, job details,
location, status, super visor name, and set of books are entered.
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When the contingent worker is created as a user, you can assign the Self
Service Time and Labor responsibility to him so that he can create
timecards:
Set up for Task Flow:
The user needs to use Function PO_CWK_ASSOCIATIONS for the
new Contingent worker Association Page to create a task flow setup.
Create an entry into Application Utilities Lookups [Lookup Table] for the
function in the HRMS responsibility.
Create a Task Flow Unit for the lookup just defined. Define the Global
Parameters you want to go to the page, which will be passed page
parameters.
1. G_ASSIGNMENT_ID Mandatory.
2. G_EFFECTIVE_DATE
Security> Task Flow node for the unit
Security > Task Flow Definition. Navigate to the Proper parent node
For example for Enter and Maintain screen go to US HRMS PERSON
TASKFLOW NAME, then query up the node name to be added. To
create a child node to this, first create the child as a node.
Make a new Node name and enter the new node
[PO_CWK_ASSOCAITION]. Now query the existing node NASSIGN
for assignment page and then add new node [PO_CWK_ASSOCAITION]
to the existing node [NASSIGN].
Projects
For integrating Services Procurement flow with Projects, the following are the
basic set up steps:
o
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The user can define the project with details of Project Name, Number,
Expenditure Type, Task and other project related details.
o
FUNCTIONAL FLOW
iProcurement
Creating a Request for Service Requisition
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Preparer/ Requester enters the request for services from iProcurement. He can
opt for appropriate store on the home page or to the Non-Catalog Request
Page or to a contractor request.
Figure 9: Page Layout: Create Requisition via Stores
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Purchasing
Creating a Purchase Order For Service Request
The basic flow for Purchasing commences with Purchase order creation where
the buyer can select the line type as Rate Based Temp Labour.
There should be a job already defined in the HR responsibility and associated
to a Purchasing category, which the buyer can select during Purchase Order line
creation.
During Purchase Order line creation, the buyer needs to enter the Start date in
Temporary Labour. This step is mandatory. Optionally he can enter the name
of Contingent Labour in the Purchase order.
The user can create multiple shipments and distributions with multiple project
details. The user can associate one project to each distribution line on a
purchase order.
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The user can create multiple distributions with the same or different project
details. As a part of R12.1 project, there has to be at least one dummy project
with the CWK enabled checkbox selected.
During creation of Purchase order, the Users can optionally add the Contingent
Labour name to the PO line. The users need to record the start date of the
assignmentPO Line and this is a mandatory step.
In the PO Distribution, the user can associate a project to the particular
distribution line. The account generation will happen base on the account
generator workflow.
Once the Purchase Order is complete, the user can save it and submit it for
approval.
After the successful creation of time card, the user runs the concurrent
program Retrieve time from OTL (Figure 12). The retrieval process defines
the data that Oracle Purchasing can retrieve from the time store. As a result of
this program, the user can view the number of quantity received in Purchase
order.
The optional parameters for this programme includes:
o
Start Date
End Date
Supplier
Transaction Date
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Note: Oracle Services Procurement rate-based line types can only be received using the Retrieve Time
from Oracle Time and Labor process.
HR Responsibility
The PO and the PO line are associated to a Contingent worker in the HR
responsibility.
7.Along with the purchase order and line details, supplier name, supplier site
and effective start date and end date details are also provided
8.The status of the assignment for a contingent worker must be active.
6.As a part of R12.1 enhancement, there is one to many relationships between
Purchase order and HR Assignment. The Workforce Task Manager can assign
more than one PO, PO lines to the Contingent worker. There is no change in the
existing functionality of assigning one Purchase orders / PO line to the CWK.
The various attributes for the new UI Associate Purchase order to a contingent
worker covers Purchase order, Purchase order line, document style, business
unit, description, amount, currency, start date and status. For the Contingent
labor to select a PO / PO line during creation of time card, the status must be
active.
The status field is attached by a dropdown list, which will contain Active and
Inactive The user is able to Add Update and Delete the PO, PO lines in
the HRMS responsibility.
Once the time card is created, the user cannot change any of the details in HR
assignment for a PO, PO line and status.
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As a part of R12.1, the contingent worker is able to create Time card for all the
purchase order lines containing with various distributions and same project details.
Creation of Time Card
In Time Card Layout, time can be captured as a total number of hours for a given
day. Also, the following lists of values (LOV) should appear for each line of time
entry:
Project
Project information is any valid project. It can be the same project from the PO
distributions or any other valid project
Task
Project task can be dependent on the selected project (LOV).
PO/PO Line
This is a single LOV with 3 columns PO, PO line number, and description. The
POs that display in the results should be valid POs as documented in the
validation rules section
The LOV should only show those POs that have been assigned to the contingent
worker via the HR Assignments form. If at least one day of the timecard period
falls within the effective start/end dates of the assignment, the PO should appear
in this LOV. Otherwise, it is assumed that the assignment is no longer effective
and the user should not be able to select the PO from the LOV.
PO lines must be using the rate-based temp labor line type.
Users should be able to search by either PO number or PO description
The following validation rules should be applied to time entered in OTL for
purchasing use:
The PO number and line reference must point to an approved PO shipment.
Also, the PO should not have any of the following control statuses:
o
The PO must be currently active. The date in which the time is recorded must fall
within the start and end dates of the PO line.
The date in which time is recorded must not fall within a closed Purchasing or GL
period.
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The calculated receipt amount should be within the receiving amount tolerance
specified for the PO.
Rate Type
The rate type LOV should show those rate types associated with the selected PO
Number/Line plus the Standard rate type.
Projects
The user enters the Project information in Requisition/ Purchase order. During
Purchase order creation, the project details are entered in PO. Distributions
where the buyer enters project name, task, type, expenditure organization, date
and quantity.
During creation of time card, the CWK can select any valid real project for time
entry along with purchase order details. This scenario will work only if the
project accounting is based on the time card accounting.
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Accounts Payable
Once the time card is approved and Retrieve time from OTL program is
successfully run, the project information of the time card gets passed on to
Invoicing in case of ERS invoicing from receiving tables. The application will
not consider the project information mentioned in the Purchase order
distribution.
In case of manual creation of invoice, the project information derived from the
purchase order has to be reversed and the invoice should be created with the
project details of time card.
BUSINESS EXAMPLE
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As there are several projects on which the company is working on, the buyer is not
aware of the actual project during time card creation that has to be charged upon.
He has entered a dummy project A in Purchase order distribution for 600 hours
and a real project B for Purchase order distribution of 400 hours. Once the
purchase order is created, a PO charge account is generated for further recording
in.
The Purchase order gets approved with a PO No 5625.
In HR Assignment form, the Purchase order is assigned to a Contingent Worker
AMY.
More than one Purchase orders can be assigned to a contingent worker with the
enhanced functionality of R12.1.
During timecard creation, the Contingent worker can select any real project. In this
scenario, say he has selected the real project C for the Purchase order No 5625,
Line 1 for 200 hours.
The timecard is approved and then the user runs the concurrent program Retrieve
time from OTL. As a result of this program, the user can view the number of
quantity received in Purchase order. The accounting entry would be:
Debit
PO Charge Account
(01-840-7430-0000-000)
Credit
Accrual Account
(01-000-2220-0000-000)
Labor Cost
Credit
PO Charge Account
(01-840-7430-0000-000)
(Debiting the Labor cost account and crediting the PO Charge account)
During auto generation of invoice, the invoice will be created with the project
information to be derived from the time card. The invoice is generated for the
amount of hours for which the time card is created.
During the invoice generation, the accounting entry would be:
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Credit
AP Liability Account
Credit
Bank
ACCOUNTING APPENDIX
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