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Presented this today at the SAP Cloud Conference in Manila. Track: Procurement & Business Network Summary: Presentation covers benefits of joining ARIBA Network from seller perspective.
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Supplier Perspective: Benefits of Joining ARIBA Network
Tushar Gulhane | Procurement & Business Network LOB SAP Cloud Conference | Manila | March 06, 2014
Public
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 2Public
Agenda
2
3
1 Networks in Social and Business Context
Philippines Supplier Community at-a-glance
Why Suppliers are joining ARIBA Network
Benefits Summary4
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 3Public
‘Networks’ in Social Context
Discover
Connect
Collaborate
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 4Public
Transforming Social Network Models to Business
Discovery
Connect & CollaborateShopping
The Ariba Network combines domains from various personal networks in which end-users are engaged into a single platform for businesses
1.2 Million trading partners
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 5Public
ARIBA Network Activity by Country in Asia
VIET NAM
INDONESIA
THAILAND
KOREA
TAIWAN
HONG KONG
MALAYSIA
SINGAPORE
INDIA
JAPAN
PHILIPPINES
CHINA
0 500 1,000 1,500 2,000 2,500
By # of Transacting Suppliers
Philippines has 2nd highest number of suppliers transacting on ARIBA Network in Asia
2nd Highest number of PO transactions in Asia
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 6Public
ARIBA Network Activity - Philippines
In last 12 months …. 2257 # of Active Suppliers on AN and growing…
93,163 # of POs sent on AN
63,754 # of E-Invoices (PO based) sent on AN
$ 200 M+ Total Spend Throughput (PO amount)
$ 58 M Total Invoice amount through AN
Why Sellers are Joining Ariba Network ?
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 7Public
Philippines Supplier Community At-A-Glance
Micro, 74,3250
Small & Medium, 73,509
Large; 3496 820,200+ business enterprises operating in the Philippines
Of these, 99.6% (816,759) are micro, small, and medium enterprises (MSMEs)
Backbone of the economy employing around 65% of the country workforce
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 8Public
Top 10 Challenges of the SME Community in Philippines
1. Banks are wary of SME lending because it is costly
2. Information asymmetries raise the risks of lending to SMEs
3. Collateral takes precedence among lending criteria
4. SMEs lack skills in preparing financial records
5. Few SMEs maintain extensive banking relations
6. SMEs need to be more financially literate
7. Inadequate supply of skilled workers
8. A huge proportion of SMEs are still not “e-ready”
9. Acquiring technologies can be prohibitive
10. Limited awareness of alternative technologies and support services
ARIBA is helping them address these challenges. HOW ?
Access to Finance
Technology Adoption
Skills Shortage
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 9Public
ARIBA Commerce Cloud for Suppliers
Suppliers create ARIBA Commerce Cloud Profile on seller.ariba.com No need to install a software.
This enables a supplier to:
A
LEADS: Discover new business relationships and receive leads
PROPOSALS: Participate in online sourcing events & quotations
CONTRACTS: Access your customer contracts and negotiate terms
ORDERS & INVOICES: Manage your online orders, catalogues and invoices.
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 10Public
Multiple Buyers through Single ARIBA Supplier Account
Supplier : Information, Communications and Security Technology (ICST) company based in the Philippines
1 ARIBA Network Account
4 Buyers (all Philippines based)
# of POs received in last year: 300+
Business transactions worth PHP 50 M through ARIBA Network
Supplier
Buyer1
Buyer2
Buyer3
Buyer4
B
Supplier Feedback - “We are managing 4 customers in Philippines and are now getting invitations from international buyers to submit quotations through our ARIBA account”
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 11Public
Get Paid Faster & Reduce Cost of Borrowing
ARIBA Network Enables: Lower errors and invoice disputesFaster invoice processing Improved traceability of invoices
Result: Faster payments by 10-15 daysFor a supplier with annual sales of
PHP 36.5 M (Daily sales ~ 100,000 PHP) => 100 K – 150 K PHP in cost savings
C
XYZ DSO 60 Days 45 Days
1 Day sales (avg.) 100,000 PHP 100,000 PHP
Cash invested 60,00,000 PHP 45,00,000 PHP
Cost of Borrowing 10% 10%
Annual Interest charges
600,000 450,000
Savings 150,000 PHP
Example
Supplier Feedback - “Our overdue payments have reduced by 80%. Since we started getting paid on-time we now have a positive cash flow”
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 12Public
Manage Latest Products & Pricings through Catalogues D
Supplier Feedback -
“We are now able to update catalogue regularly with latest product offerings & prices. Orders we receive are more accurate. ”
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 13Public
Case Study – Charles Seafoods Supply
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 14Public
Priceless Benefits !
How ARIBA is Helping SMEs
Improving cash flow and reducing cost of borrowing
Become e-commerce ready Increasing awareness of cloud
based technologies Training them on new sourcing
& procurement skills Making them ARIBA Ready for
other buyers
E
SME Challenges
Access to Finance
Technology Adoption
Skills Shortage
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 15Public
Buyer Objectives
Reduce Supply Chain Costs
Find New Sources of Supply
Becoming more efficient and effective with existing suppliers
Better manage working capital, DPO
Seller Objectives
Sell more to existing customers
Find new customers to sell to
Greater payment visibility
More efficient and effective with customers
Improve working capital, DSO
Win-Win Situation for Both Buyers and Sellers
© 2014 SAP AG or an SAP affiliate company. All rights reserved. 16Public
Conclusion
Buying & Selling. More fun in the
Philippines
…with ARIBA Cloud Apps & Network
© 2014 SAP AG or an SAP affiliate company. All rights reserved.
Thank you
Contact information:
Tushar GulhaneProcurement & Business Network LOBSAP Cloud Customer [email protected]+65 9673 8509