Welcome ToWelcome ToOAUG Contracts SIGOAUG Contracts SIG

Quarterly Web ConferenceQuarterly Web ConferenceNovember 18, 2008November 18, 2008

http://contractsig.oaug.org/http://contractsig.oaug.org/

Agenda:Agenda:

Introduction Introduction -- Contracts SIG ChairContracts SIG Chair(Chiran Sarkar, Quantum Corp.)(Chiran Sarkar, Quantum Corp.)

R12 Functional Overview presentation on R12 Functional Overview presentation on Renewals Enhancements Renewals Enhancements -- Krishnakanth Krishnakanth Telikepalli, Oracle CorpTelikepalli, Oracle Corp

Auto Renewal Functionality Auto Renewal Functionality –– Kristen Kristen Cornila, Kronos Inc.Cornila, Kronos Inc.

R12 Functional Overview for Renewals EnhancementsKrishna Kanth TelikepalliSr. Product Manager, EBS Contracts

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.

Safe Harbor Statement

• Oracle Contracts Management Solution• Service Contracts• R12 New Features• Renewals Enhancements• Wrap Up / Q&A

Agenda

Oracle Contracts Management Solution

Oracle Contract Management Products

Develop

Market

Sell

Order

Plan

Procure

MakeFulfill

Service

Maintain

Finance

HR

Projects

Contracts

Customers,

Suppliers,

Products, …

Customers,

Suppliers,

Products, …

Sales Contracts

Service Contracts

Project Contracts

Procurement Contracts

Contract Intelligence

Sell-SideSell-Side

CustomersSuppliersPurchase Contract

Sales ContractSales

Delivery / Fulfillment SupportService

Purchasing

Legal Finance

Oracle Contract Management Solution

Buy-SideBuy-Side

Oracle Repository Contracts

Contract Administration

Oracle Procurement ContractsOracle Project Contracts

Oracle Sales ContractsOracle Service ContractsOracle Project Contracts

Oracle Service Contracts

Standardized Templates

• Terms & Conditions• Legal• Compliance

• Cancellation / Renewal Rate

ContractingParty

Email

Global Contracts Library

Internet

Integrated Intelligence

Phone

• ContractBookings

Service

Projects

Legal

Sales

Finance &Accounting

• Version Controlled

• Workflow Approvals• Change Mgmt• Collaborative Authoring

Contract Lifecycle Management

Secure AccessSecure Access

Oracle Contract Management Solution

• Uplift & Reduction

SupportDraft &NegotiateDraft &

NegotiateFulfill &

StoreFulfill &

StoreEnforce & EntitleEnforce & Entitle Optimize Optimize Renew &

Terminate Renew &

Terminate

Oracle Service Contracts

Oracle Service ContractsProduct Overview

• Sell different types of services on a contract

• Define standard coverage terms and entitlements for service offerings

• Bill accurately based on actuals or estimates

• Analyze renewals for recurring revenue opportunities

• Provide Business Intelligence

Sell Multiple Services on a ContractLeverage Common Price, Bill and Renewal Capabilities

• Warranty and Extended Warranty• Include warranties or extended warranty on sales orders• Synchronize warranty date information with Install Base

• Cover Products, Items, Systems, Sites, Customers & Parties

• Usage• Monitor product usage with counters• Bill for estimated or actual usage• Adjustments for counter or amount based termination

• Subscription• Sell tangible and intangible subscriptions• Complete fulfillment flow for tangible subscriptions• View subscription delivery status from contract• Manage pricing, billing and renewals from contract

Customers Notifications• Expirations• Renewals

CustomerService

ServiceContractsRepository

• Coverage Times• Response Time

Commitments• Discounts• Resource

Preferences• Time Zone

& Breaks

• Coverage Times• Response Time

Commitments• Discounts• Resource

Preferences• Time Zone

& Breaks

InstantaneousVerification

Reduce ServiceEntitlement Violations

Increase CustomerSatisfaction and Loyalty==

Install Base Integration• Transfers• Returns • Replacement

Coverage and EntitlementAccelerate Customer Response and Reduce Exposure

• Define customer billing terms -- timing, amount

• Price accurately

• Ensure appropriate discounts & surcharges are applied

• Control invoicing frequency date & amount

• Preview & automatically generate invoice from AR

• Track billing history on contract -- invoice numbers, applicable tax

Regular Service Fees

• Recurring fees• Annual support contracts

(inc. renewal fees)• Charge for coverage of

products or product groups

TimeBased

Volume & Incident Based Billing

• Counter-based readings• Include price breaks prior

to determining total• Support estimated or

actual usage

UsageBased

Automated, Accurate BillingEliminate Pricing and Billing Errors

• Receive automated alerts in advance of expiration

• Utilize flexible renewal rules and pricing methods

• Leverage flexible pricing methods

• Renew specific line items or entire contract

• Support renewal consolidation

• Track contract renewals though sales forecasts

Enable Sales to Proactively Manage Renewals

CreateOpportunity

Quote

ActivateContract

OngoingMgmt

Renew

Streamline Contract Renewal ProcessReduce Service Revenue Leakage

R12 New Features

R12- New Features

• Contract Authoring Enhancements

• Standard Coverage

• Line Level Cancellation

• Multi-Org Access Control

• Publish Contract for Online Acceptance

• Contract Billing and Revenue Enhancements

• Partial Period Billing

• Partial Period Revenue Calculation

• Credit Card Encryption

R12 - New Features• Contract Renewal Enhancements

• Administrator Workbench• Renewal Negotiation Workflow• Enhance Customer Acceptance Portal

• Enhanced Installed Base Integration• View Impacted Contracts in Install Base• IB Mass Updates – Service impact

• Improved Search and Inquiry Capabilities• HTML Contract Search

Renewal Enhancements

New and Changed Features forService Contracts Renewals

• Renewal Negotiation Lifecycle Management• Administrator Workbench• Improvements to Online Acceptance Portal• Enhanced Communication Templates• Flexible Approval Rules• Enhanced Auto-Reminder Process

Service Contracts RenewalsProcess

• Managing Service Contract renewals

• Segment renewal base & assign renewal rules

• Manage “My Contracts” in Administrator Workbench

• Customer reviews contracts in Online Acceptance Portal

Set Thresholds

Set Thresholds

Set Payment Options

Set Payment Options

Assign Templates

Assign Templates

Review Open

Renewals

Review Open

Renewals

Follow-up with

customers

Follow-up with

customers

Set Approval

Rules

Set Approval

Rules

Business Analyst

Customer

Salesperson

Update ContractsUpdate

ContractsPublish to CustomerPublish to Customer

Log into Portal

Log into Portal

Review Open

Renewals

Review Open

Renewals

Accept / Reject /

Assistance

Accept / Reject /

Assistance

Renewal Negotiation Lifecycle ManagementDescription

• To better manage and track your renewal negotiation, all renewal contracts will be managed through a renewal negotiation workflow

• Negotiation Status: More granular status tracking to allow proactive process monitoring and improved visibility during the contract negotiation lifecycle

• Internal and External Notifications to alert users: New and improved notifications to contract administrators and customers of actions that they need to take on open contracts

• New Approval Options: Support for various contract approval scenarios ranging from manual to fully automated approvals

• Enables proactive renewal management with notifications and status tracking

• Provides better visibility to management on progress of renewal contracts

Renewal Negotiation Lifecycle Management Benefits

Renewal Negotiation Lifecycle Management Process

• Renewal Negotiation Lifecycle consists of 5 key steps outlined in the process flow above

• All Renewals can be classified into three categories• Manual or Contract Administrator Driven Renewals• Online Renewals• Evergreen Renewals

• Negotiation status, a new attribute on the contract header, enables users to track the progress of the renewal negotiation process

Renewal Negotiation Lifecycle Management Manual Renewal Process – Next Steps

• Notify Customer• 3 Options on how the customer can be notified on the pending contract

• Print or Email• Publish quote online using the Online Acceptance Portal

• Template set setup determines the format of the quote • Customer Acceptance

• 2 Options on how the quote can be accepted• Manually by salesperson• Explicitly by customer if the quote has been published

online• Contract Approval and Activation

- For manual contracts internal approval is optional and is determined by approval flag. If approval is required, salesperson submits for approval

- Once contract is approved, workflow activates the contract

Renewal Negotiation Lifecycle Management Online Renewal Process – Next Steps

• Customer Notification• Quote is automatically published to the online portal through workflow• Customer contact gets an email with online portal login information• Template layout setup determines the format of the quote published

• Customer Acceptance• 2 Options on how the quote can be accepted

• Manually by salesperson: Customer Acceptance is implicit• Explicitly by customer from the Online Acceptance Portal

• Internal Approval and Activation- 3 Options for Internal Approval

• Manual: Salesperson has to manually submit contract for approval• Automatic: Contract is submitted for approval right after customer acceptance from

the online portal• Not Required: Contract can be activated without internal approval

Renewal Negotiation Lifecycle Management Evergreen Renewal Process – Next Steps

• Notify Customer• Customer is not notified automatically• Salesperson can email quote to the customer

• Customer Acceptance• Customer acceptance is assumed

• Internal Approval and Activation- 2 Options for Internal Approval

• Required: Contract is submitted for internal approval right after renewal and activated once approved

• Not Required: Contract can be activated without internal approval

Renewal Negotiation Lifecycle Management Negotiation Status Transitions

Renewal Negotiation Lifecycle Management Negotiation Status- Workbench and Authoring

-Negotiation Status indicates current workflow status of the contract

-Seeded views use negotiation status as filter criteria

Renewal Negotiation Lifecycle Management Alerts and Notifications

• Workflow sends alerts and notifications to both internal and external users during the negotiation lifecycle

• The following diagram shows the various alerts and notifications sent out during various stages of the renewal negotiation lifecycle

Administrator WorkbenchDescription• A configurable workbench that enables sales reps to easily

track progress of open service contracts• Notifications Bin: Allows users to view their workflow

notifications• Simple and Advanced Search: Allows users to quickly

search for renewal and new contracts• Shortcuts: Administrators can use the workbench for other

activities such as authoring new contracts• Seeded Bins: Workbench has been seeded with bins that

enable users to view contracts in various stages of negotiation

• Administrator Actions: Available from the My In Process Contracts Bin that allow the administrator to take actions on selected contracts

• Increases Contract Administrator efficiency by providing a single place to view and act on in-process contracts

• Improves usability through consolidated, personalizable views of contracts in-process, and drilldowns to contract details

Administrator Workbench Benefits

Administrator WorkbenchHomepage

Quick Search enables users to search for new and renewal contracts

Users can use shortcuts to perform other actions

Notifications for contracts that need attention

Shortcuts enable users to perform other actions

My In Process Contracts bin displays all open contracts in the user’s queue

Administrator WorkbenchSeeded Contracts Bins

- Default seeded bin with seeded views- Displays all contracts where current user is the vendor contact

-All in-process contracts-User can define views to filter contracts-Bin has to be enabled using OA Framework personalize features

Administrator WorkbenchMy In Process Contracts - Views

View DescriptionAll In Process Contracts All new and renewal contracts in 'Entered' statusFollow-Up Actions All contracts for which a follow-up action has been enteredOnline Quotes All contracts having 'Quote Published' negotiation status i.e. quote has been

published online for customer acceptancePending Internal Approval All contracts having 'Pending Internal Approval' negotiation statusPending Quotes All manual and online contracts in entered status that are not pending

approval or pending activationPending Salesrep Assistance

All contracts having 'Assistance Required' negotiation status

Reminder Sent All contracts that are waiting for customer action (Negotiation Status = 'Quote Sent' or 'Quote Published'), for which reminders have been sent.

Renewals All contracts that have been renewed and are currently In Process.

Seeded Views enable administrators to view their contracts using various filter criteria

Administrator WorkbenchDefining personalized views

Administrator can use the personalize option to create new views

Standard OA Framework functionality can be used to create new views

Administrator WorkbenchMy In Process Contracts Bin - Details

Icon Indicates auto-reminders have been disabled

Negotiation Status indicates current workflow status of the contract

Contracts with follow-up actions and due date for those actions are available

Search results can be sorted by various attributes

Administrator WorkbenchMy In Process Contracts Bin -Actions

Multi-contract actions (upper) and single contract actions (lower)

These actions are controlled by function security. Administrators can enable these actions for specific usersWorkbench – Negotiation actions from single place

Action DescriptionPublish to Customer Publish contracts for online acceptanceSubmit for Approval Submit contracts for internal approvalDisable Reminders Disable auto reminders from being sent to customersEnable Reminders Enable autoreminders if they have been disabled for selected contractsRun QA Check Run QA check on selected contractsOpen Contract Opens the selected contract in Authoring formEmail Customer Opens the email page with selected contract information defaulted

Print Quote Prints the quote in pdf format

Administrator WorkbenchMy In Process Contracts Bin – Email Action

User navigates to the email customer page from the workbench using the Email Customer action

Email page will have To, From and Subject defaulted

–User can define a message and attachment using template sets

–Message template and attachment template LOVs show all available XML publisher templates for the contract

User can also specify a message instead of using a message template

Improvements to Online Acceptance PortalDescription

• Low value, high volume contracts can be automatically presented to customers for review and acceptance via an online portal

• Salesreps now have the ability to manually publish in-process contracts to customers for online review and acceptance

• Reduces manual processes and paperwork to obtain customer acceptance

• Increase salesrep efficiency by automating customer acceptance

• Improves customer satisfaction by providing enhanced payment methods and document upload capabilities online

Improvements to Online Acceptance Portal Benefits

Improvements to Online Acceptance Portal How to use this feature

Online Renewal Portal uses the Oracle Single Signonfunctionality to logon to the acceptance portal

Customers can retrieve forgotten usernames and passwords themselves instead of having to contact system administrators

Improvements to Online Acceptance Portal Pending Service Contracts

Customer can perform actions on new and renewal contracts of Service Agreements, Extended Warranty and Subscription categories

Available actions are –accept, decline and request assistance

Flag indicates that the pending contract is a renewal

Clicking quote displays quote in .pdf format

Contracts pending salesrep assistance are marked. These contracts can be accepted or declined

Improvements to Online Acceptance Portal Online Customer Acceptance – Payment Page

Only acceptable payment methods based on regional requirements are exposed. Users can enter both new and existing credit cards

Users can attach a document such as the image of a PO or check

Improvements to Online Acceptance Portal Request Assistance

Customer can request salesrep for assistance on a specific contract

Salesrep email and subject are defaulted

Customer comments are tracked as interaction on the contract

Enhanced Communication TemplatesDescription

• Enhanced Communication Templates

• Integration with XML Publisher: Service Contracts integrates with XML Publisher to support user-defined layout templates for customer communication documents

• Templates for multiple processes: Template Set setup functionality has been enhanced to support templates for different processes – Online and Manual processes for both new and renewal contracts

• Language Support:A single Template setup will support multiple languages

• Contract Administrators can now define whether a set of document templates is used for new contracts or renewal contracts

• Users also have the option to specify whether document templates should be used for salesrepmanaged contracts or for online acceptance contracts

• Reduces setup time required to setup templates for various languages.

Enhanced Communication Templates Benefits

Enhanced Communication TemplatesSetup – Define Template Set

Process: Manual, Online or Both

Document Type• Quote Letter• Cover Letter• Reminder Letter• Acceptance

Confirmation• Cancellation Letter• Activation Confirmation• Any User Defined typeApplies to:New, Renewal or

BothMessage Template:

Message template used for customer communications

Attachment Template: Attachment template used for attachments in customer communications

Attachment Name:Filename for the attachment

Flexible Approval RulesDescription

• Standard contract approval workflow integrates with Oracle Approvals Management (AME) to drive the approval process

• Standard approvals management features such as rules based approval routing, definition of approval groups, et al. are supported

• Increased flexibility in creating sophisticated approval rules based on contract attributes

• Streamlines approvals by enabling approvals in parallel - for example - Business and legal approvals can be in parallel

Flexible Approval Rules Benefits

Flexible Approval Rules Setup

AME Setup1. Create new Service Contract Attributes in AME (if needed)2. Define an AME Condition based on the attributes3. Define an AME Approval Group containing approvers as

members4. Define an Action in AME5. Define a Rule based on Conditions and Actions

Flexible Approval Rules Setup – 1. Creating New Attributes

Seeded attributes available for defining Conditions -• Contract ID• Operating Unit• Customer Party• Contract Category• Contract Amount

Flexible Approval Rules Setup – 2. Define Condition

- Condition Type can be Ordinary or Exception

- All Seeded attributes available for defining Conditions

Condition is CONTRACT_AMOUNT > 5000 and less than 25,000

Flexible Approval Rules Setup – 3. Define Approval Group

Selected Approver for this approval group

Flexible Approval Rules Setup – 4. Define an Action

Action defined will be used later in the approval rule

Flexible Approval Rules Setup – 5. Define rule using conditions and actions

Flexible Approval Rules Testing Approval Rules

Once the approval rules have been created the AME test workbench can be used to test the conditions

When the test case is run, the following pages displays the derived approver

Enhanced Auto-Reminder ProcessDescription

• Auto-reminder process has been enhanced to send reminders for both manual and online renewals

• Contract Administrators also have the ability to disable or enable reminders for contracts that they do not wish to send reminders to customers for

• Enables contract administrators to remind customers that contracts need their attention

• Automates reminder process for both manual and online contracts

Enhanced Auto-Reminder Process Benefits

Enhanced Auto-Reminder Process Setup

• Template set layout• Template set for the contract has to be setup to send

reminders on specific intervals before current contract expiration

Enhanced Auto-Reminder Process How to use this feature

• Auto-reminder process can be used for both manual and online contracts

• Online Contracts• Process will select all contracts for which quote has been

published online

• Manual Contracts• Contract Status will be used to send reminders• When the auto-reminder process request is run, the first

reminder will be sent and the contract will be flagged with a reminder sent flag

• Subsequent reminders will be send automatically

Enhanced Auto-Reminder Process How to use this feature

•For manual reminders, the contract status has to be specified as a parameter

•This will typically be a one time setup

•In this example, the auto-reminder process is set to send reminders for all contracts in ‘Quote Sent’ status

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Oracle eBusiness:Service Contract Renewals

Kristen Cornila,

Sr. Business Systems Analyst

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About Kronos Incorporated

Global Human Capital Management Software Company

$715 million in annual revenue (Fiscal 2008)

3400 Employees worldwide

Customers in more than 60 countries

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Oracle eBusiness SuiteImplementation overview

April 2005: Revenue Business Processes using 11.5.9

Quoting, Configurator, Order Management, Advanced Pricing, Inventory, Shipping/Receiving, Receivables, iPayment, Advanced Collections, General Ledger, Cost Management, Install Base, and Service Contracts.

October 2006: Cost Business Processes using 11.5.9

Planning, Work in Process, Bills of Materials, Quality, Purchasing, iProcurement, Accounts Payable, Fixed Assets and Cash Management

April 2008: Upgrade to 11.5.10 completed

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Agenda

Service Contracts at Kronos

Renewals at Kronos, custom logic

Renewal Challenges

Best Practice Collaboration ‘Survey’

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Service Contracts at Kronos

Standard Warranty and Service Agreements are interfaced from OM

Approximately 1000 sales orders per month; 93% orders sold to existing customers added to existing Service Contract

Service Contracts contain products with varying start and end dates:

Software – service agreement begins on ship date

Hardware – service agreement begins after 90-day warranty

Add-on products & upgrades sold throughout contract period

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Service Contracts at Kronos (con’t)

Products are generally sold with one-year service coverage; not co-term’d upfront

Strive to consolidate all products into one service contract per customer

Average contract contains 30 lines

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Renewals at Kronos

Which end date triggers renewal?

Example: Header 01-JAN-07 – 31-MAY-08SFW 01-JAN-07 – 31-DEC-07

HDW 01-APR-07 – 31-MAR-08

SFW 01-JUN-07 – 31-MAY-08

Standard Oracle – Header End Date 31-MAY-08

Kronos custom – Earliest subline end date 31-DEC-07; No lapse in service coverage

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Renewals at Kronos

RenewalCreation

Pre-InvoiceReview, Quote &Approval

Renewalinvoice

Dunningletters

RenewalStart

Cancellation(if unpaid)

120 Days Prior 120-60 days Prior 60 Days Prior 30 days Prior andAt renewal start date

Entitlement continues,even if unpaid

30 days after renewal

01-SEP-2007 01-SEP-2007through31-OCT-2007

01-NOV-2007 01-DEC-2007and01-JAN-2008

01-JAN-2008 01-FEB-2008

Active Contract: 1177555Gold (SW): 01-JAN-2007 – 31-DEC-2007 (12-month price)

Depot Exchange (HW): 01-APR-2007 – 31-MAR-2008 (12-month price)

Renewal Contract: 1177555 R01-SEP-08Gold (SW): 01-JAN-2008 – 31-DEC-2008 (12-month price)

Depot Exchange (HW): 01-APR-2008 – 31-DEC-2008 (9-month price)

Standard Markup % appliedCustom logic Coterminates and Prorates pricing

Evergreen Renewal Process Example: Renewal Start Date 01-JAN-2008

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Renewals at Kronos

Other key features of Kronos custom renewal program

Enforce item obsolescence dates using item’s pending statuses

Update billing schedules (offset days) to ensure one scheduled invoice date

Auto-set critical fields, ex: Transaction Type, A/R Interface Flag,Invoice Print flag

Consolidate service lines

Renumber lines

Custom Approval Workflow$ thresholds, contract type (determined by modifier), and contract group determine Approver

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Renewals at Kronos: Challenges

Kronos’ business process involves intense manual review of each contract prior to generating email quote for customer acceptance.

Approximately 1000 renewal contracts generated per month, containing 30,000 lines

Custom solution design in process to develop Automated Renewal Checklist to increase efficiency of this process

Software upgrades – manually transfer $’s from ‘old’ version to ‘new’ version; no systematic replacement (‘many to one’ scenario)

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‘Survey’ Questions

Looking for your feedback:1. What is your renewal process and/or challenges?

2. How do you handle product replacements or upgrades?

3. How do you calculate Contract Retention Rate?

Please send to: kristen.cornila@kronos.comI will consolidate results and distribute to the group for true best practice collaboration!

©2008, Kronos Incorporated. Kronos, and the Kronos logo are registered trademarks and “Experts at Improving the Performance of People and Business” is a trademark of KronosIncorporated or a related company. All other products or company names mentioned are used for identification purposes only and may be trademarks of their respective owners.

All rights reserved. Printed in the U.S.A.

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