Effective use of SAP Ariba solutions can drive significant results, but to maximize value, a focus on factors like governance, compliance, and success measurement is critical. How do you leverage your executive sponsorship to drive compliance? How do you measure success and communicate it? Learn how to align these factors to unlock value and win the hearts and minds of your stakeholders. In this session, we also review actions you can take now to get a plan on track.

1. PUBLIC
June 28, 2017
Melissa Aery, Jason Leet, and Sabine Adotevi, SAP Ariba (SAP)
Maximize SAP Ariba Solution ROI Through
Optimized Governance, Compliance, and
Success Measurement

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On a scale of 1 to 5:
How knowledgeable are you now about choosing and calculating
metrics to measure success of your SAP Ariba program?
On a scale of 1 to 5:
Rate your confidence now in writing or revising compliance-
related policies that will drive spend adoption.
“Surveying” your knowledge

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Success Measurement
 What Is Success Measurement?
– Why Measurement Is Important
 Selecting Metrics That Matter
 Success Measurement Workshop Activity:
– Metrics That Matter: Custom Scorecard
– How Do You Compare?
Policies
 Why Policies?
 Key Elements of a Good Policy
 Compliance Workshop Activity: Write the Policy
Agenda

4. Success Measurement

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Prove value proposition from the business case to ensure continued progress and
show how clients are meeting their objectives with SAP Ariba solutions
Educate and train on how and what to measure against best-in-class companies
Provide framework for ongoing best-practice “health check” discussions
Take the emotion out of decision making, allowing facts to rule over feelings
Provide targets to achieve and support continuous improvement
Why is measurement important? It can be used to:
What is success measurement?
Drive business value through strategic improvement linked to key metrics of lowering
cost, increasing effectiveness, and maintaining through compliance.
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Selecting metrics that matter
Hierarchy of metrics composition
SAP recommends a success measurement scorecard approach using operational metrics (enablers) and savings metrics (results).
Following is a summary:
 Value levers – groupings of metrics by source of benefit: price reduction, spend compliance, process improvement, cash management
 Savings levers –typically quantified in development of a business case to define the ultimate goal of process transformation
 Operational indicators – serve as leading indicators of performance that enable the savings lever; primarily industry-recognized benchmarks
 Data metrics – transactional inputs needed to derive the operational indicators and savings levers
Example:
Process
improvement
Invoice
processing FTE
reduction
% of invoices
electronic
Invoices per
FTE
Total invoices
AP FTEs
Avg time to
process an
invoice
Value levers Savings levers
Operational
indicators
Data metrics

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Metrics that matter
Business area Metric Laggard Customer value
Best in
class
Spend under
management
Sourcing
Average sourcing savings % 1.7% 9.7%
% spend under management 56% 82%
Control and
compliance
Procurement
Maverick spend % 24% 4.9%
% of POs created from contracts and
catalogs
39.5% 92%
Process
efficiency
Finance and
accounts payable
POs per FTE 2,105 10,000
% of electronic POs through Ariba
Network (as % of total SAP Ariba POs)
62.8% 99%
Invoices per AP FTE 7,347 24,676
% of electronic invoices through Ariba
Network (as % of total SAP Ariba
invoices
44.8% 100%
% of SAP Ariba invoices without
exceptions
53.2% 91.6%
Cash
management
WCM and
discounts
% of spend on discount terms 1% 10%
Days payable outstanding 28 days 46 days

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Operational KPIs – how do you compare?
19.1%
Average sourcing
savings
94%
Spend under
management
20k
POs per operational
procurement FTE
1 day
Average invoice
approval cycle time
Top performers from SAP Ariba benchmarking program
49k
Invoices per AP
FTE
Metric Laggard Average Best in class
Spend under
management
Average sourcing savings %
% spend under management
Control and
compliance
Maverick spend %
% of POs created from contracts and catalogs
Process
efficiency
POs per FTE
% of electronic POs through Ariba Network (as % of
total SAP Ariba POs)
Invoices per AP FTE
% of electronic invoices through Ariba Network (as
% of total SAP Ariba invoices)
% of SAP Ariba invoices without exceptions
Cash
management
DPO
% of spend on discount terms
100%44.8%
4.9%24%
92%39.5%
99%62.8%
24,6767,347
82%56%
9.7%1.7%
91.6%53.2%
46 days28 days
10%1%
10,0002,105

9. Policies

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Policies can vary from centralized to center-led to a blended approach to help achieve value:
 Clear policies help measure adoption and outcome.
 They provide specific expectations for compliance.
 They align to a corporate strategy – to achieve specific business outcomes.
Why policies?

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 Executive sponsorship
 Alignment to clear business goals
– Risk management, quality assurance, profitability, efficiency, …
 Supported with required procedures and tools
 Communication strategy and training
 Measurement that ensures compliance
 Effective date and version of policy
Key elements of a good policy

12. Success Measurement and Policies Workshop Activity

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Using the “metrics that matter” framework, select one metric for each value lever to create a
scorecard that could be implemented within your organization.
Discuss at your table and share what your respective organizations are doing today…
 What has worked well
 What could be done better
Call to action:
 Discuss your custom scorecard with your management team and SAP Ariba account team to see how to put
it into practice.
Success measurement activity

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Read through the assigned policy that best-in-class companies implement:
 No PO, no pay
 Competitive bid
 Supplier noncompliance to Ariba Network
Select the elements that could apply to your own company to create a customized policy.
Collaborate with others at your table to see what has worked with them and get additional
suggestions on what to include.
Write the policy

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Public
On a scale of 1 to 5:
How knowledgeable are you now about choosing and calculating
metrics to measure success of your SAP Ariba program?
On a scale of 1 to 5:
Rate your confidence now in writing or revising compliance-
related policies that will drive spend adoption.
“Surveying” your knowledge

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Public
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17. Thank you.
Contact information:
Melissa Aery Jason Leet Sabine Adotevi
VP Center of Excellence VP Value Realization Director Value Realization
melissa.aery@sap.com jason.leet@sap.com sabine.adotevi@sap.com