Oracle Value Chain and Procurement Transformation Edition
Oracle Corp
March 2012 Stay Connected: TwitterFacebookLinkedIn YouTube
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Oracle-Powered Solution Brings Services Spending Under Control

Since the 1980s businesses have been relying more and more on contingent workers. Back then, third-party labor represented less than 5 percent of the total workforce. But today that number has surged to about 30 percent and could jump to more than 50 percent over the next 5 to 10 years. “That means for each dollar being spent on payroll, companies are now spending about 30 cents on third-party labor,” says Edward Jackson, president of Provade Inc., an Oracle partner that delivers an on-demand solution for this area that uses Oracle technology.

Although services account for a major percentage of an organization’s spend, as a category it typically lacks formal oversight by contracting or procurement professionals. Instead, line of business staff independently contract for the services, which undermines effort to control costs, improve performance, ensure compliance, and eliminate fraud. For this reason some industry observers say services are one of the most undermanaged areas of procurement spending.

But it doesn’t have to be that way. Billions of dollars in spending for contingent labor is now being managed by Provade’s vendor management system, which uses Oracle Business Intelligence Enterprise Edition, Oracle enterprise applications, and analytics as its foundation. “Most companies use a significant amount of contract and contingency labor, so better management controls can yield substantial cost savings,” Jackson says.

Drawing on Oracle Business Intelligence, organizations can use the Provade solution to aggregate buying power to reduce services costs and create processes for controlling spending from the requisition through the check writing stage. The Provade solution integrates with existing procure-to-pay systems in Oracle E-Business Suite, Oracle’s PeopleSoft, and other ERP applications.

“The analytics are essential to this solution because at the end of the day they give organizations insights into what actions they can take to further realize cost savings or reduce their compliance and risk issues,” Jackson says.

Learn more about Oracle and Provade.

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