Come hear a panel of Ariba sellers that subscribe to the concepts of the Supply Chain Council’s Perfect Order Initiative explain why they participate and how Ariba is an integral part in their plan to attain the "Perfect Order."

1. Accelerate the Sales Cycle through the
Perfect Order
A Seller Panel
© 2013 Ariba, Inc. All rights reserved.

2. #AribaLIVE
Presenters
• Austin Whitehead
Sr. Product Marketing Manager, Seller Solutions
Ariba
• Andre Rego
Senior Manager, eCommerce Strategy,
Grainger Inc.
• Niels Gjerloev
B2B/eProcurement Sales Leader
IBM
© 2013 Ariba, Inc. All rights reserved.2

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THE PERFECT ORDER: AN
INDUSTRY PERSPECTIVE
Austin Whitehead, Senior Product Marketing Manager, Ariba
© 2013 Ariba, Inc. All rights reserved.3

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Supplier Management: Paradigm
Shift
© 2013 Ariba, Inc. All rights reserved.4
Traditional View of “Vendors”
 Suppliers are companies that provide
goods and services as needed
 Interactions are zero sum
 Leverage is the key to value
 Contracts and SLAs are the primary
supplier management and
communication tools
 Suppliers are a source of
knowledge, expertise, and assets that we
can leverage to gain competitive
advantage
 In a world of competing supply chains, our
success is tied to that of our suppliers
 Collaboration is the key to value
 Complex supplier relationships require
formalized governance and relationship
management
New View of “Partners”

5. #AribaLIVE
“To be successful, we need to deliver
on improving execution across the
supply chain.”
~ Bob Eckert, Chairman and CEO, Mattel Inc.
Competition in the New Age
© 2013 Ariba, Inc. All rights reserved.5
Supply Chain Success = Business Success

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What is a Perfect Order?
• On Time
• Complete
• Damage Free
• Correct Documentation
© 2013 Ariba, Inc. All rights reserved.6
On the road to
Perfection, Remember to
enjoy
the journey!

7. #AribaLIVE
A Perfect Order Means Different
Things to Different Partners
© 2013 Ariba, Inc. All rights reserved.7
For Buyers
 Ordering the right things from the right
supplier
 At the right time
 On-time delivery
 Right location and complete
 Efficient invoice processing but slow pay or
discount capture
 Shipping what was ordered
t
 Efficient fulfillment
 On-time shipping
 Right location and complete
 Efficient invoicing to get paid quickly
For Suppliers
….AND IN DIFFERENT INDUSTRIES….

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How to Define Perfect Order?
© 2013 Ariba, Inc. All rights reserved.8

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Spend Analysis eSourcing
Contract
Management
eProcurement ePayables
The Cost of Imperfection (Buyer)
© 2013 Ariba, Inc. All rights reserved.9
• Failing to identify best supplier can cost 10% - 20%
• Non-compliance to contracts costs an extra 6% - 12%
• Poor invoicing can add 40-60% admin cost plus loss of discounts
and overpayments
• Cash flow impact
• Production – disruptions and higher risk
• Erodes sales and customer satisfaction

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The Cost of Imperfection (Supplier)
© 2013 Ariba, Inc. All rights reserved.10
• Sales
• Production
• Productivity
• Cash flow
• Innovation
• AND MORE

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The Network-Driven Perfect Order
© 2013 Ariba, Inc. All rights reserved.11
• Buyer Perspective
• Supplier Perspective
What?Who? When? Where? Why? How? How much?

12. #AribaLIVE
Recommendations
© 2013 Ariba, Inc. All rights reserved.
• New approach to supply/spend management
• Clearly define “The Perfect Order” and share
with partners
• Understand the cost of imperfection
• Understand the cost of total perfection
• Leverage network capabilities to
improve performance
12

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THE PERFECT ORDER: A
SUPPLIER PERSPECTIVE
Andre Rego, Senior Manager, eCommerce Strategy, Grainger Inc.
© 2013 Ariba, Inc. All rights reserved.13

14. #AribaLIVE
My eProcurement Journey…
© 2013 Ariba, Inc. All rights reserved.14
Federal University
Rio de Janeiro
Electronic Engineer
University of Illinois at
Urbana-Champaign
Masters in Business and
Information Technology
eProcurement StrategyGlobal eProcurement
Global
Pharmaceutical
Company

15. #AribaLIVE
Grainger Overview
One-stop-shop
- Over 1 million MRO products, 3,400 suppliers
- eCommerce and Inventory Management Solutions
- Extensive distribution network
© 2013 Ariba, Inc. All rights reserved.15
North America's leading B2B broad line supplier of
Maintenance, Repair and Operating supplies.
(expanding presence in Asia and Latin America)
Trusted eProcurement Partner
- Ariba Ready Platinum Supplier with extensive
knowledge and experience in eProcurement solutions
FORTUNE Most Admired Companies in the World, #1 Diversified Wholesalers
Internet Retailer Top 500, #15 Overall and #1 in Category

16. #AribaLIVE
Why Electronic Commerce?
© 2013 Ariba, Inc. All rights reserved.16

17. #AribaLIVE
The Perfect Order
• Customers that invested on Ariba or other eProcurement solutions
expect more, they want a retail-like experience
Fast to find products
Easy to place orders and to pay based on agreed terms
Efficiency gains through full automation (low transaction costs from req to check)
© 2013 Ariba, Inc. All rights reserved.17
• Unlike retail websites that control most of the online
experience, eProcurement solutions require greater collaboration
across internal departments and the entire Supply Chain
• The good news:

18. #AribaLIVE
The Perfect Order
• Using all the tools currently available and collaborating with your key
Suppliers, you can give your users a retail-like experience.
© 2013 Ariba, Inc. All rights reserved.18
Electronic Order Electronic Notifications
Electronic InvoicesElectronic Payment

19. #AribaLIVE
Why does it matter?
• For BUYERS:
Retail-like experience
Timely delivery of products
Reduced procurement costs
Reduced inventory due to increased trust in
delivery times
Reduced invoice rejections and increased
auto invoice to PO matching
© 2013 Ariba, Inc. All rights reserved.19
• For SUPPLIERS:
Reduced PO receipt and fulfillment costs
Accurate PO decreases costs of returns
and credit processing
Reduction/elimination of invoice rejections
that cause payment delays

20. #AribaLIVE
The Opportunity
• 51% COST REDUCTION1
average requisition to order cost
before eProcurement was $63.20,
after eProcurement, dropped to
$32.28
• 36% COST REDUCTON IN
INVOICE-TO-PO MATCHING
PROCESSING2
Companies utilizing automated
matching of Invoices to POs versus
those not currently leveraging this
technology.
© 2013 Ariba, Inc. All rights reserved.20
1 Source: The eProcurement Benchmark Report: eProcurement 2.0, Aberdeen Group, August 2006
2 Source: Invoicing and Workflow, Integrating Process Automation to Enhance Operational
Performance, Aberdeen Group, May 2011

21. #AribaLIVE
Best Practices
• Build strategic partnerships with your Suppliers and
jointly define the right eProcurement strategy with
clear objectives.
• Engage the right people throughout the process
and understand their specific needs.
• Start with a vision for “The Perfect eProcurement
Order” and build the steps necessary to achieve
that. Your users and Suppliers will thank you!
• Avoid jumping to electronic invoices without a proper
shopping mechanism and electronic ordering
process in place.
• It is never a one-time event. Develop ongoing
change management and engage your strategic
Suppliers to help you drive adoption.
© 2013 Ariba, Inc. All rights reserved.21

22. #AribaLIVE
THE PERFECT ORDER: A
SUPPLIER PERSPECTIVE
Niels Gjerlov, B2B/eProcurement Sales Leader, IBM
© 2013 Ariba, Inc. All rights reserved.22

23. #AribaLIVE
Bio
Niels Gjerløv
B2B/eProcurement Sales Manager, Online Commerce Europe
• M.Sc in Economics from Univeristy of Copenhagen
Master thesis on Operational Research
• Joined IBM 1990
• For over a decade, work has included
Order Management processes
Process development and Order Data Modelling
B2B xml integration projects (globally)
IBM Online Commerce is the center of competence for Client interaction
electronically with IBM regarding catalogues, elecronic order and invoice
flows, web-based workflows.
© 2013 Ariba, Inc. All rights reserved.23

24. #AribaLIVE
Agenda
• IBM Sell Side and B2B/eProcurement
• First steps
• What is important – and to whom
• Progression towards touchless integration
• The optimal order flow
© 2013 Ariba, Inc. All rights reserved.24

25. #AribaLIVE
IBM’s Involvement with
eProcurement: Sell-Side Perspective
• IBMs was as an early adopter
on EDIFACT – from a Buy Side
• Sell-Side first web ordering
channel for Business Partners
PartnerWorld) was built in the late 90's
• First integrated (xml) ordering
channel in to IBM’s Sell Side
was put in place in 2002
© 2013 Ariba, Inc. All rights reserved.25

26. #AribaLIVE
IBM’s Involvement with
eProcurement: Sell-Side Perspective
• Today, IBM has
multiple web-based workflow solutions to
assist buyers
– pre-ordering,
– P2P management and
– post-payment transactions
a well-established Enterprise Gateway
– integrated communication between direct
Clients, Business Partners and IBM
over 4,800 clients connected
– web solutions or
– P2P transacting
© 2013 Ariba, Inc. All rights reserved.26

27. #AribaLIVE
Jumpstarting Our eCommerce
Capabilities
• External and internal events required IBM to
quickly engage in Sell-Side B2B
Business Partners required order
integration
Internal web platform required structured
internal data communiction
• First project was implementation of the
RosettaNet 3A4 Purchase Order, that went
live in 2002.
Additional RosettaNet projects for
Business Partners include Order
Response, Order Status, Advanced
Shipment Notification, Sales Out
Reporting
© 2013 Ariba, Inc. All rights reserved.27

28. #AribaLIVE
Jumpstarting Our eCommerce
Capabilities ... 10 Years Along
IBM is connected through a vast span of formats directly with our Clients and
Business Partners, or through one of the many eProcurement Service
Providers available on the market – the largest of which is Ariba.
© 2013 Ariba, Inc. All rights reserved.28

29. #AribaLIVE
But Buyers and Sellers Have
Different Priorities
Procurement is looking to
optimise around invoice
reconciliation to save money!
Buyers are focused on
eInvoicing in order to reduce the
invoice handling cost
© 2013 Ariba, Inc. All rights reserved.29
Sellers want to
focus on the order!
Sellers are focused
on eOrdering, as
this means sales
and revenue
One leads to the other!
Procurement is looking to
optimise around invoice
reconciliation to save
money!
Buyers are focused on
eInvoicing in order to reduce the
invoice handling cost
Sellers want to
focus on the order!
Sellers are focused
on eOrdering, as
this means sales
and revenue
One leads to the other!

30. #AribaLIVE
But Buyers and Sellers Have
Different Priorities
• Is there a common ground?
© 2013 Ariba, Inc. All rights reserved.30
A good order leads to...
• on-time delivery
• followed by a good invoice,
• which leads to on-time payment...
A bad order leads to...
• additional
communication before
order acceptance,
• delays in
production/delivery,
• incomplete invoice,
• additional reconciliation,
• perhaps an invoice reject
and claims handling
A bad transaction
leads to...
• more costs,
• longer processing
• and involves
more people!

31. #AribaLIVE
But Buyers and Sellers Have
Different Priorities
• Is there a common ground?
© 2013 Ariba, Inc. All rights reserved.31
A good order leads to...
• on-time delivery
• followed by a good invoice,
• which leads to on-time payment...
A bad order leads to...
• additional
communication before
order acceptance,
• delays in
production/delivery,
• incomplete invoice,
• additional reconciliation,
• perhaps an invoice reject
and claims handling
A bad transaction
leads to...
• more costs,
• longer processing
• and involves
more people!

32. #AribaLIVE
What does a perfect order look like?
• Or rather – what does ”the perfect order flow” look
like? Quality in – quality out
• Consensus between the Buyer and Seller on
achieving the perfect order flow is essential.
On-time payment requires a perfect invoice
A perfect invoice requires a perfect purchase
order the can be matched and reconcilied
A perfect purchase order from the Buyer
requires a perfect proposal or catalogue from
the Seller
• Consensus between the Buyer and the Seller on
the data elements contained is key
Contract numbers and party identifiers
Payment Terms and Delivery instructions
Product/Service content
© 2013 Ariba, Inc. All rights reserved.32

33. #AribaLIVE
The ”Perfect Order” Flow
• Simple e-mail communication is just the first step
• Buyers should share their eProcurement agenda, while Seller their capabilities.
• Requires collaboration and partnership between Buyer and Supplier.
One cannot achieve optimisation without the other!
• Integrating systems requires collaboration between Lines Of Business on either
side, Procurement and Operations as well as the IT departments.
© 2013 Ariba, Inc. All rights reserved.
33
IBM Solution - Maturity Curve
ClientSpend/ClientValue
Value
Costs
Basic Intermediate Advanced Full Integration
Two-way low tech
Transaction exchange
Light Touch
Integration
“No” Touch
Integration
One-way message
(e-mail)
simple web
simple e-mail
structured e-mail
with specific data
initial system-
to-system
automated and
touchless integration

34. #AribaLIVE
The ”Perfect Order” Flow
• Simple e-mail communication is just the first step
• Buyers should share their eProcurement agenda, while Seller their capabilities.
• Requires collaboration and partnership between Buyer and Supplier.
One cannot achieve optimisation without the other!
• Integrating systems requires collaboration between Lines Of Business on either
side, Procurement and Operations as well as the IT departments.
© 2013 Ariba, Inc. All rights reserved.
34
IBM Solution - Maturity Curve
ClientSpend/ClientValue
Value
Costs
Basic Intermediate Advanced Full Integration
Two-way low tech
Transaction exchange
Light Touch
Integration
“No” Touch
Integration
One-way message
(e-mail)
simple web
simple e-mail
structured e-mail
with specific data
initial system-
to-system
automated and
touchless integration

35. #AribaLIVE
The “Perfect Order” Delivers
© 2013 Ariba, Inc. All rights reserved.35
Increases Productivity
Reduces Manual Workload
Cut Costs
Reduces Cycle Time

36. #AribaLIVE
What Information, Where and When?
 Understanding what
information is needed and
where it is needed in the
integrated order flow requires
internal and external
collaboration
 manual process has mulitple
hand-offs and media changes.
 There is no data interlock
 There is no collaboration on
achieving KPIs
© 2013 Ariba, Inc. All rights reserved.36

37. #AribaLIVE
What Information, Where and When?
• Information is added at all
points in the order flow.
Some is crucial, some is not.
Agree on what is needed
where!
• If an eProcurement Service
Provider is involved, be
sure all three parties
are involved
• Start the process with the
Request and work all the
way through to Payment
© 2013 Ariba, Inc. All rights reserved.37

38. #AribaLIVE
Summary
• While many Procurement departments are focussing on the
perfect invoice, many Sales organsations are only worried
about the purchase order
• Aligning focus and collaborating on the perfect order flow
will yield the desired benefit in a win-win scenario
• Understand of what information is required and at what
point in the process is a necessity in order to create a
touchless and automated process
• Share and discuss eProcurement strategy, KPIs and other
factors that will help align objecives
 For Buyers – focus on eReconciliation. i.e. touchless order-
invoices matching
 For Sellers – focus on moving Clients up the maturity curve.
 The more integrated the flow, the better the Buyer-Seller
partnership!
© 2013 Ariba, Inc. All rights reserved.38

39. Questions?
© 2013 Ariba, Inc. All rights reserved.

40. #AribaLIVE
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