Ariba Network for Procurement

Why 21st Century Procurement Organizations Leverage Business

Networks

The Digital Economy

Ariba Network

Why SAP?

Next Steps

Why SAP

Bn by SAP

Market Dynamics /
Setting the stage

Storyline

al
Intern

Only

1. SAP legacy = 42+ years of experience in business process automation

2. The world is changing:
1. Macro Trend 1: Digitized economy
2. Macro Trend 2: increased complexity and competitiveness requiring more B2B collaboration than ever before

3. Despite the above a lot of inefficiencies in B2B collaboration today

3.
4.
5.
6.
7.
8.

Ariba Network can help overcome above challenges

by bringing benefits to both buyers and sellers
Typical Companies spend is spread across 5 categories
and SAP BN helps manage the spend across all these categories.
Detailed slide for each category
Example of collaboration in the BN (align to the 3 process chevrons)

9. Many reasons to use BN by SAP: summary slide

10. Details for for each reason
11. Customer references
12. Next steps

2014 SAP SE or an SAP affiliate company. All rights reserved.

The Digital Economy

Ariba Network

Why SAP?

Next Steps

SAP is building on 42+ years of heritage in solving internal company

problems by expanding into business-to-business collaboration

Across 25
INDUSTRIES

in 180
COUNTRIES

Over $USD 14B investment by SAP

over the past 3 years

253,000
CUSTOMERS

35+ MILLION
Cloud Users

$USD 600B In annual over 20,000 business

categories
commerce

40+ MILLION
On-premise users

2+ MILLION
Ecosystem
consultants

108 MILLION
business documents

74%

of the world business transactions

are processed by SAP

2014 SAP SE or an SAP affiliate company. All rights reserved.

1.6+ MILLION
companies world wide

Over 76%
of the Global 2000 use Ariba Business
Network

The Digital Economy

Ariba Network

Why SAP?

Next Steps

Digital Economy fueled by hyperconnectivity

2.5 billion
Connected people on
social networks by 2020

75 billion
Connected devices
by 2020

$65 trillion
Global business
trade by 2020

The Digital Economy requires a shift to a

Real time Business Collaboration.

2014 SAP SE or an SAP affiliate company. All rights reserved.

The Digital Economy

Ariba Network

Why SAP?

Next Steps

Changing business environment increases pressure on companies

Economic Volatility

Increasing Globalization

Volatility in markets
Decreased stock valuation
Slow economic growth
High expense ratio

Greater Risk
Supply chain disruption
Financial risk and fraud
Commodity risk

Regulatory Changes
Increasing disclosure requirements
Country-specific regulations
Industry-specific disclosures

2014 SAP SE or an SAP affiliate company. All rights reserved.

Expansion into new markets

Global process standardization
International supply chains
Increased off/near shoring

More Competition
Pricing pressures
New sources of competition
Decreased budgets and spending

Accelerating Technological
Change

Changing business models

Faster innovation cycles
Expanding partnerships and channels
Leveraging big data for decisions

The Digital Economy

Ariba Network

Why SAP?

Next Steps

Collaboration inefficiencies between companies is costly

Paper Based
Transactions
Nearly 77% of all
incoming invoices are
still paper based.
- Aberdeen, 2012

Too Many
Exceptions

Leakage
Of Value

Lack Of Visibility Into Spend

By Category

15% of invoices
have exceptions
adding 6.6 days to
the cycle.

$4.6 million in
contract leakage per
billion in spend on
average.

Companies are losing

$260 billions each year
due to a pervasive inability
to organize and analyze
spend data.

- TAPN, 2010

- The Hackett Group, 2012

Aberdeen, 2010

70% of payment is
still handled via paper
checks
- 2013 AFP Electronic Payments
Survey

50% of
prenegotiated
discounts are never
captured.

90% of companies still use

spreadsheets application
as their primary analysis
tool.
Aberdeen, 2010

- Aberdeen, 2012

Collaboration inefficiencies cost companies $650B

(1)

annually

(1) Basex Research

2014 SAP SE or an SAP affiliate company. All rights reserved.

The Digital Economy

Ariba Network

Why SAP?

Next Steps

Ariba Network connects people, systems and processes to simplify

business commerce

Open
Any Vendors
Any System
Any Protocols

Comprehensive
All Suppliers, All Collaborative
business processes, All
geographies

Intelligent
Automated, Contextual, , Realtime, Big Data driven

YOUR TRADING PARTNERS

YOUR
Your
COMPANY
Company

YOUR SYSTEMS

2014 SAP SE or an SAP affiliate company. All rights reserved.

The Digital Economy

Ariba Network

Why SAP?

Next Steps

Ariba Network Delivers Measurable Benefits and Value to

Companies of All Sizes, Industries, Regions

BUYER VALUE

WCM &
Discount

4-7%
Procure-to-Pay
Savings

3-9%
Sourcing
Savings

SELLER VALUE

Increased
Revenue

Contract
Compliance

Sales &
Marketing

AP Process

Processing
Orders

Procurement
Process

AR Process

Unit Price
Reduction

Faster
Payment

5-32%
Revenue
Increase

15-75%
Process
Savings

15-75%
Time
Savings

Source: Ariba customer surveys and interviews

2014 SAP SE or an SAP affiliate company. All rights reserved.

The Digital Economy

Ariba Network

Why SAP?

Next Steps

SAP can address all major spend categories

7%

COLLABORATIVE PROCUREMENT SUCCESS

DEPENDS ON :

Travel &
Expenses

26%

Real time seamless collaboration

with any business partner

Comprehensive end to end process

automation by spend category, with
consumer great UX

Direct & Supply

Chain

Compliance with external and

internal regulation (GRC, data
security, integration with system of
record)

46%
Contingent Labor and
Services

21%
Indirect & MRO

Global capital and operational spending

for the Global 2000 is distributed across
different categories. SAP Business
Networks can help companies address all
of the spend categories
Source: Spend Categories for Global Top2000

2014 SAP SE or an SAP affiliate company. All rights reserved.

The Digital Economy

Ariba Network

Why SAP?

Next Steps

SAP can support a comprehensive category management across

the commerce lifecycle

LARGEST NETWORK
IN THE WORLD

Source & Contract

Request & Buy

Invoice & Pay

DIRECT & SUPPLY CHAIN

INDIRECT & MRO
CONTINGENT LABOR & SERVICES
TRAVEL & EXPENSES

Complete source to
pay process
# 1 in the world
# 1 in Procurement
# 1 in Contingent
Workforce / VMS
# 1 in Travel
Management

INTEGRATION TO SAP SYSTEMS AND NON SAP

2014 SAP SE or an SAP affiliate company. All rights reserved.

10

The Digital Economy

Ariba Network

Why SAP?

Direct & Supply Chain

SCOPE

PAIN POINTS

Customer Equipment
Handsets
SIM-Cards
Others

Absence of supplier evaluation and

performance reporting

Radio Network
BTS
Civil Engineering
Technical Commodities
Network Operations
Site Rent & Maintenance
Site/Entergy Supply
Network Infrastructure
Leased Lines

Absence of system forced

compliance around approved items
and pricing leading to maverick
spending

Next Steps

ple of
Exam
m
Teleco

SOLUTION

KEY STATISTICS

1.6+ million
Trading partners
165+ million
Catalog items

Difficulty in managing DPO leads to

late payment fees and inability to
realize early payment discounts
High incidence of invoice exceptions
and manual processes to resolve
them leads to vendor payment
delays

2014 SAP SE or an SAP affiliate company. All rights reserved.

11

The Digital Economy

Ariba Network

Why SAP?

Next Steps

Indirect & MRO

SOLUTION

KEY STATISTICS

SCOPE

PAIN POINTS

Manual and ineffective insight into

supplier behaviors and capabilities

1.6+ million

Upfront Requisitioning getting most of

my spend on POs

165+ million

Maverick Buying users buying from

non-contracted suppliers

108+ million

Marketing
IT & Telecom
MRO
Transp. & Logistics
HR
Admin
Capex

Price Compliance assuring negotiated

savings is realized

Trading partners

Catalog items

Documents (PO, invoices)

Re-Issuing POs to suppliers delaying

critical supply delivery
Manual invoice reconciliation
Exceptions & Errors handling

2014 SAP SE or an SAP affiliate company. All rights reserved.

12

The Digital Economy

Ariba Network

Why SAP?

Next Steps

Contingent Labor & Services

SCOPE

PAIN POINTS

SOLUTION

KEY STATISTICS

Vendor Sourcing & Management

11+ million

Corporate Services

Contracts and Payments

Timesheets processed
annually

Administrative Services

High costs and inefficient

processes

1.4 million

Contingent Labor

Complex Services

Spend Management & Visibility

Contingent worker job

placements annually

Lack of Clarity on Full scope

(complex services)
Services performed vs Contract
(complex services)

2014 SAP SE or an SAP affiliate company. All rights reserved.

13

The Digital Economy

Ariba Network

Why SAP?

Next Steps

Travel & Expenses

SCOPE

PAIN POINTS

Increase in overall T&E spend

Air travel
Hotel Spend
Car Rental
Ground Transportation
Meetings and Events

Inability to enforce corporate travel

& Expenses policies
Lack of visibility into spend

SOLUTION

KEY STATISTICS

25M+
Users

57% Fortune 500

Customers

Manual data entry and inefficient

processes

2014 SAP SE or an SAP affiliate company. All rights reserved.

14

The Digital Economy

Ariba Network

Why SAP?

Next Steps

The size and scale of the worlds largest business network allows
companies to quickly realize value (1)

EVERY

1.6+

1minute

$600

million

Companies

a company joins
the network

billion

108+

11+

1.4

million

million

million

Timesheets processed
annually

Contingent worker
job placements
annually

165+

17

16.4

million

million

Documents annually
(PO + Invoices)

Catalog items

Leads annually
sent to sellers

In annual commerce

million
Users

(1) Does not include Concur

2014 SAP SE or an SAP affiliate company. All rights reserved.

15

The Digital Economy

Ariba Network

Why SAP?

Next Steps

SAP makes companies run simpler by delivering leading network

capabilities

Open
Connect all your systems across functions,
industries and companies regardless of backend system or level of technical sophistication

Global
Discover, connect and collaborate with
more than 1.5 million buyers and sellers in
190 countries via 20 localized languages.

Comprehensive

Trusted/Secure

Drive end-to-end process collaboration across

the entire network regardless of company
size, geography, and spend category.

Secure solution relied on by the worlds

largest companies for over 15 years.

Intelligent

Unmatched services

Harness the power of network-derived

intelligence, configurable business rules and
community-based insights for better business
decisions and drive continuous innovation.

2014 SAP SE or an SAP affiliate company. All rights reserved.

Total repeatable service model which

enables you to grow with the speed and
needs of your company by spend category,
geography and business processes.

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The Digital Economy

Ariba Network

Open

Why SAP?

Next Steps

SAP is built on an open platform supporting all systems

Any level of technical sophistication

System-to-System
Integration

Any back-end system

CSV
EDI
cXML

Web
Email
Mobile

POWERED BY HANA

As a truly open business network, it enables all companies, industries, and functions. We eliminate the
burdens of business-to-business connectivity by giving businesses a single, standard integration point to
better collaborate with all of trading partners regardless of your company size or backend systems.

2014 SAP SE or an SAP affiliate company. All rights reserved.

17

The Digital Economy

Comprehensive

Ariba Network

Why SAP?

Next Steps

SAP covers an end-to-end set of collaborative business processes

Source & Contract

Spend Visibility
Spend
Analysis
Sourcing
Supplier
Discovery
e-Auctions
Strategic
Contract Sourcing
Contract
Management
management
Supplier
Information
Spot Quote
(*)
Management
Supplier
Risk
Management

Request & Buy

Collaborative Requisitioning &
Approvals
Catalog Management
Order Routing and Notices
Spot Buy
Contingent Workforce
Management
Travel Management
Supply Chain Execution

Invoice & Pay

Invoice Automation
Invoice Reconciliation
Discount Management
Working Capital
Management
B2B Payments
Expense Reimbursement
Bank Automation

ANALYTICS - Comprehensive Intelligence with Spend Visibility and Transaction Reporting - All
Trading Partners, All Collaborative business processes

2014 SAP SE or an SAP affiliate company. All rights reserved.

18

The Digital Economy

Intelligent

Ariba Network

Why SAP?

Next Steps

SAP leverages network and community-based insights for better decision making

AUTOMATED

CONTEXTUAL

Error-free, touchless collaborations for

greater cost-savings

Right information, right time, right person

or system for better decisions

Smart Process Validation

Configurable business rules
Automated document validation

Value-Added, Contextual Information

Ratings / Reviews
Benchmarking, recommendations, 3rd party data

Matching Capabilities
Item-level matching between buyers & seller to
capture savings
Gather informational earlier to make decisions

Visibility and Insight

Real-time visibility into actionable data enables
predictive insights
Earlier visibility into liability, payables or invoice
status

2014 SAP SE or an SAP affiliate company. All rights reserved.

19

The Digital Economy

Ariba Network

Global

Why SAP?

Next Steps

SAP brings global scale with local support and compliance

Russia -planned

San Jose, CA

Amsterdam, NL
Paris, France
Pittsburgh, PA

Hilversum, NL
Rot, Germany
Sofia, Bulgaria

Ashburn, VA
China Planned

Existing
Planned

San Paolo,
Brazil
Santiago,
Chile

Johannesburg, RSA

Globalization

Localization

Global Support

Global Data Centers

190 countries with local time

zone, currency support and
business rules

36 countries Country-specific
government regulation and tax
policy compliance

24x7 support across the globe

14 Distributed global data

centers : US, Europe, Brazil,

72 currencies transacting

8 support centers in all

continents

New centers planned for

China and Russia.

20 languages supported

2014 SAP SE or an SAP affiliate company. All rights reserved.

20

The Digital Economy

Trusted & secure

Ariba Network

Why SAP?

Next Steps

SAP delivers a highly secure and reliable business collaboration solution

Built on Trust

Reliable Data Security Procedures

Used by the worlds largest businesses

Meets European standards such as EU Model
Clauses
15 years of delivering secure transactions
100+ million complete business-to-business
transactions processed annually

Fully audited and endorsed by industry security

standards
The scope of our ISMS includes both corporate
headquarters and R&D
SSAE 16 SOC 2 compliant

2014 SAP SE or an SAP affiliate company. All rights reserved.

21

The Digital Economy

Ariba Network
Unmatched
services

Why SAP?

Next Steps

SAP delivers unmatched services and support for long-term success throughout the
engagement process

CUSTOMER &
TECHNICAL SUPPORT

TRAINING &
EDUCATION

GLOBAL DELIVERY
SERVICES

8.6/10 customer

Over 50 self-service
training videos

80,000 suppliers enabled

200 seller educational

+1400 implementation

satisfaction

8/10 calls answered

within 120 seconds
24 x 7 global coverage, 8
regional centers

email assets

annually

and adoption consultants

7 delivery centers across

India, NA, SA, Central
Europe & Africa

90% first contact

resolution

2014 SAP SE or an SAP affiliate company. All rights reserved.

22

The Digital Economy

Ariba Network

Why SAP?

Next Steps

Company Success Stories

s
Industry success storie
whenever possible

Challenges

Challenges

Challenges

High services spending

completely maverick with no
contract compliance

95%+ paper invoicing

400K+ per year
Matching and error exceptions
in ERP AP system is biggest
issue & cost

Strong procurement culture

but inability to drive
compliance to suppliers and
contracts with broad user
base buying

Results

Results

Low number of POs high

maverick and out of
compliance buying

Over $1B managed through

Ariba Network

100% of invoices coming into

ERP via Ariba Network
balancing paper conversion &
true digitization on supply side

Primarily paper processing

with suppliers

75%+ of spend is services

that are matched and
validated to contract terms
prior to posting for payment

Lower ERP exceptions as a

result
Looking to mature to
discounting and additional rate
compliance for services spend

Mostly paper Invoicing

Key Value Drivers

Process
Efficiency
Effectiveness
& Compliance
Cycle Times

Results
80%+ transactions electronic
through Ariba Network with
Suppliers

Discounts &
Working Capital

Upfront compliance controls to

assure proper PO creation
with proper suppliers and
rates
High end user satisfaction
driving the buying process
with suppliers
Best in class levels of PO
Based Invoices resulting in
touch-less invoice rates of
98%+

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23

The Digital Economy

Ariba Network

Why SAP?

Next Steps

Next steps

EXPERIENCE

CONTACT

ENGAGE

INITIATE

it yourself at the next SAP

event near you, or check
out SAP global events for
solutions for insurance

your account team to

schedule a meeting

with SAP in Design

Thinking workshops

SAP contact Name

Contact: your SAP contact

the benchmarking
process with a free value
assessment at

SAP Mail address

2014 SAP SE or an SAP affiliate company. All rights reserved.

valuemanagement.sap.com

24

Thank you

2014 SAP AG or an SAP affiliate company. All rights reserved.

The Digital Economy

Ariba Network

Why SAP?

Next Steps

Ariba Network delivers proven results to buying organizations

Improved working capital

Lower costs 1% - 8%
reduction in supply chain

performance 50%

Optimized
Cash Flow

costs and a 60% reduction

improvements in discount

in operating costs, on

capture with suppliers and 20%

average.

faster payment cycles with

Spend compliance

Cost
Reduction

Reduced Time
cycle

customers

$20 M in contract leakage per $1

billion of spend. Manage
procurement and sales contracts, IP
licenses, internal agreements, etc.

Greater efficiency 150% Compliance

& Risk
Management

75% faster transaction cycles,

with many customers achieving

Strengthen operational, contractual,

>90% fully automated

and regulatory compliance,

(touchless) transaction
processing

2014 SAP SE or an SAP affiliate company. All rights reserved.

26

The Digital Economy

Ariba Network

Why SAP?

Next Steps

Ariba Network also delivers value to sellers

Higher Customer Satisfaction

10-15%

and higher retention rates

Increase in customer retention

Greater Visibility

70-80%

into customer processes

Higher order accuracy

Increased Sales

20%

with new and existing customers

Year-over-year growth in
the business

Lower Costs

50%

of managing the order-to-cash cycle

Reduction in exceptions and

disputes

Better Predict and Apply Cash

68%

through better information

Increase in reconciling payments

2014 SAP SE or an SAP affiliate company. All rights reserved.

27