World Class Procurement in a Digital Economy

Dion GrahamVice President, Strategic Customers

SAP Ariba

SAP Ariba

World Class Procurement in a Digital Economy

Dion GrahamVice President, Strategic Customers, SAP Ariba April 5, 2016

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Digital Economy fueled by hyper-connectivity

$65 trillionGlobal business trade by 2020

2.5 billion Connected people on social networks by 2020

75 billion Connected devices by 2020

“The Internet of Things”

Internal | © 2014 SAP SE or an SAP affiliate company. All rights reserved.

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 48Internal

Sources: Business Insider, www.emarketer.com, SAP Fact Sheet.Impact Report, Harris Interactive. Colin Shaw and John Ivens, 2010; Deloitte Millennial Study, 2015; Shell, 2014; WRI, 2014; SAP SE, 2014. Towers Watson, 2012,

Digitization of Customer ExperiencesReal-time, contextual experiences across every channel

87%of first generation digital natives are connected to the internet while watching TV

Digitization of ResourcesData is a new asset. The Network is the new electricity.

savings through connected vehicles$5.6T

Digitization of WorkWork is no longer a place, but an activity

83%of executives plan to increase use of contingent workers in the next 3 years

The Digital Economy: This Time It IS Different

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Hyper-connectivity is everywhereInnovators connecting people, devices and business

Société de Transport de Montréal

Internal | © 2014 SAP SE or an SAP affiliate company. All rights reserved.

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Digital economy is… connectedConnect every device, system, and service we use

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Opportunities for a Digital Transformation within Procurement

“Nearly 77% of all incoming invoices are still paper based.”

- Aberdeen, 2012

“Nearly 77% of all incoming invoices are still paper based.”

- Aberdeen, 2012

Manual Collaborations

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

- The Hackett Group, 2012

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

- The Hackett Group, 2012

Rogue Spending

“9% reduction in share price from significant supply chain disruptions.”

- PwC , 2009

“9% reduction in share price from significant supply chain disruptions.”

- PwC , 2009

Supply Chain Disruption

“Two-thirds of B2B companies sell less than 10% online outside their countries...”

- Forrester, 2014

“Two-thirds of B2B companies sell less than 10% online outside their countries...”

- Forrester, 2014

Missed Business

Opportunities

“50% of pre-negotiated discounts are never captured.”

- Aberdeen, 2012

“50% of pre-negotiated discounts are never captured.”

- Aberdeen, 2012

Poor Capital Management

$650B

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Disconnected Procurement Processes

39% of companies are not connecting their key procurement processes to one

anotherSource: Ardent Partners Research 2011

Source: Ardent Partners Research 2011

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Identify & Develop Strategic Oppty

Source &Negotiate Contract Invoice & Pay

Working Capital /Payments

•Commodity Classification

•Enrichment  Services

•Market Intelligence

•Analysis

•D&B Insight

•Dashboard – 360 Visibility

Supplier Info &Performance Spend Visibility Sourcing Collaborative SCMSupplier

CollaborationProcure to PayContracts

•Process Compliance

•Repository

•Authoring

•Compliance

•Expiring  Contracts

•Requisitions 

•Catalog 

•Workflows

•Approvals

•Compliance

•PO Automation

•PO Flip

•Invoice Automation

•PO & NON PO

•Active Compliance

•Direct Materials

•Contract Manufacturer

•VMI / SMI

•eInvoice

•Terms Mgmt

•Dynamic Discounting

•Optimize liquidity

•Payment to supplier

•Portal

•Registration & On‐Boarding

•Diversity/Green/Certs

•Risk Mgmt

•Surveys

•Quantitative &       Qualitative Scorecard

•Performance Mgmt

Manage Working CapitalProcure

•Process Compliance

•eRFX

•Category Mgmt

•Performance  Mgmt

•Sourcing Expertise

•Reverse Auctions

•Knowledge/ Repository

•Sourcing Discovery

•Reporting/Analysis

End-to-End Source to Pay ProcurementFramework for Digital Transformation

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Business demands are driving business collaboration technology innovations

1980 1990 2000 2010 2020+-1970

Mail Phone FaxEDI Vans

Direct B2B ConnectionsEmail

@

Corporate Portal

Single Process Solutions Business Networks

MANUAL COMMUNICATIONS

EARLY ELECTRONICCOMMUNICATIONS

INTERNETCOMMUNICATIONS

COLLABORATVIE BUSINESS

APPLICATIONS

COLLABORATIVE BUSINESS

COMMUNITIES

$8.0 trillion dollars are exchanged through eCommerceannually*

2X self-reported expected increased usage of B2B Networks in 12 months

25% of eCommerce volume is conducted through business networks ”

“ More than 60% of CEOs expect 15-50% of their earnings growth in the next 5 years to come from technology-enabled business innovations.

– McKinsey study, 2013

*“Bullish on digital: McKinsey Global Survey results” August, 2013

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Business Network Digitize Your Growing Outside World With Your Inside Processes

EDIEmailFaxPortal

Traditional Model

Complex optimization inside the four walls, but limited coordination with you external partners.

Business Network Model

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Order*

Discount Proposal

Invoice StatusRemittance Advice

PaymentSpot RFQ

Order Status Request

Service Entry ResponseScheduling Agreement

Release

Forecast

Inventory Status

EDI

Email

Web UI

cXML

Paper

Smart PDF

CSV

xCBLSubcontract POOutbound Delivery

Business Networks must Harmonize Data for all Systems

Order Confirmation

Catalog

Shipment Notice*

Invoice*/Payment Status

Discount Acceptance

Spot Quote

Order Status Response

Service Entry Sheet

Supply Chain Invoice

Component Receipt

Component Consumption

Forecast Response

Inventory Status

IntelligenceAutomated, Real-Time,

Big Data-Driven

ComprehensiveAll Suppliers, All Collaborative business processes,

All Geographies**

OpenAny Vendors / Any ERP system /

Any Protocol

Discover Connect Collaborate

Ariba Network

BUY SELL

MANAGE

CASH

Buyer Trading Partners

Thank you

Contact information:

Dion GrahamVice President

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