The New World of the Networked Business. Diana Brown Senior Director, Network Strategy

Transcription

1 The New World of the Networked Business Diana Brown Senior Director, Network Strategy

2 The Challenge: Too many ineffective approaches for B2B collaboration across the End to End Process Buyers Your Company Single Process Solutions Manual paper-based collaboration Fax Server Mail, Phone, Face-to-Face EDI VAN s Dedicated Direct Connect Enterprise and Supplier Portals Suppliers Wasted time & resources Missed sales opportunities (*) Basex Research 2

3 The Opportunity: Business Networks facilitate electronic inter-enterprise collaboration between trading partners Strong business networks can create competitive advantage and help organizations grow top-line and save on the bottomline simultaneously 1 $ 4-15% reduction in unit price 60% improvement in compliance 4x increase in process efficiency 20% improvement in working capital (1) Based on Ariba customer engagements and benchmarks Higher Margins & Positive EPS Impact Buyers Business Network Suppliers 65% of Best in Class companies have the capability to effectively collaborate with their network of suppliers versus only 21% of laggards. B2B Integration and Collaboration: Strategies for Building a ROI Business Case, Aberdeen Group. June

4 The Value: A winning proposition for buyers and suppliers Two-sided value proposition Driving outcomes across your organization and for your suppliers Your Objectives Procurement Supply Chain Finance IT Significantly shorten contracting cycle times. Significantly grow seller base by building new relationships. Reduce supply chain costs and risk. Gain better visibility and predictability. Manage working capital. Lower manual paper-based collaboration. Improve compliance. Faster cash-flow through discounts and proper payments in-time. Suppliers Objectives Sales & Mktg. Customer Service Accounts Receivable Business Development Improve payment visibility and timing. Lower customer service costs. Increase sales. Drive higher customer satisfaction. Find sales opportunities Better Collaboration Leading to Winning Outcomes 4

5 Typical benefits are significant Leveraging SAP and Ariba network and source-to-pay solutions Buyer Benefits 4-15% Sourcing savings 70% Operating cost reduction (AP & Procurement) 1-4% Compliance savings $2-3M Discount savings for $1B addressable spend Supplier Benefits 40%+ Cost reduction 6 Days DSO reduction 15% Increased sales & wallet share BEST IN CLASS BENCHMARKS 1 86% of addressable spend managed strategically (2) 75% % of PO & Invoice lines against item Master/ Catalog/ Contract 20% % of spend under early payment discount 50,000+ Invoices Processed per FTE 10,000 POs processed per FTE (1) Based on Ariba customer engagements and benchmarks (2) Specific to Consumer Products industry; SAP Benchmarking & Best Practices Program 5

6 How? The Ariba Network & Cloud Assets Addresses all trading partners, processes and back-end systems, simply Your Applications Procurement Content Catalogs PO & Invoice Automation E-Transactions & Status Invoice Against Contracts Invoicing Your Trading Partners Sourcing Discounting Analysis. Sourcing & Contracts Dynamic Discounting 1.2+ million $500B >60% Trading Partners In Annual Commerce Global 2000 use the Network 65+ million million Annual Invoices Countries Annual Purchase Orders 6

7 Network Experience across the Globe in many Industries Businesses of all sizes, regions, sectors -- incl. 90% of Fortune 100 BUYERS SELLERS Financial CPG & Retail Technology Chemicals, Energy, Mining Healthcare and Pharma Manufacturing & Construction and Other 7

8 End to End Supplier Processing with Suppliers Standardized Approach Ariba + ERP Sourcing Discover Negotiate & Contract Supplier View FI SCM MM PM SRM VIM Enable & Catalog Supplier Enable Catalog Enable Catalog Manage Procurement Spot Buy Request Spot Buy Bid PO, SO, BPO Change Order Forecasts Order Confirmation Adv. Shipment Notices Service Entry Invoice & Pay PO /Non PO invoices Invoice Against Contracts Credits Invoice Status Pay Schedule Discount Update Remitrance Manage Data Updates Performance One single solution for Suppliers For all connected Clients For all Processes 8

9 Collaborative Sourcing Solution Analysis and Sourcing Sourcing Analysis. Sourcing & Contracts Visibility into all supplier information Supplier profile information on one tab Supplier performance information on another Scorecards Contracts Spend Analysis Sourcing Events Execute and Monitor Sourcing Projects and Forecasted Savings Opportunities Strategic RFx Mgmt Tracking & Monitoring Tactical Bidding Integrated Contract Initiation, Authoring and Negotiation End to End Sourcing Support Tactical to Strategic 9

10 Collaborative Commerce Catalogs Seamless Shopping from ERP Procurement Content Catalogs Contract Compliance External Catalogues Catalogue Reporting Catalogue Validation Catalogue Reporting Spot Buy quote requests Content Validation Catalog Storage, Classification & Rich Attribute Searching 10

11 Extending Collaborative Commerce to Suppliers PO & Inovice Automation E-Transactions & Status End to End PO Collaboration Elimination of Lost POs Supply Visibility & Assurances Real Time Acknowledgements Process Compliance Controls Advanced Ship Notice collaboration Supply Chain Assurances, Visibility & Process Compliance Supplier View Invoice Receipt & Validation Receive invoices in ANY format Upfront Matching prior to Post to ERP Real Time Communication of errors Service Entry Compliance to Contracts Immediate and clear explanation of Invoice exceptions to SUPPLIERS prior to posting to ERP 11

12 Ariba s Smart Order and Invoicing Approach Ariba s Smart Processing approach drives auto post rates of 98% by eliminating errors and exceptions at the point of supplier submission Over 80 configurable rules that capture errors and exceptions before they reach AP & Proc PO & Inovice Automation E-Transactions & Status Supplier Portal provides real-time access to PO, invoice and payment status eliminating inquiries to AP & Procurement BUYERS AP MRP Procurement SCM EAM Treasury Ariba 98%+ Auto Post Acct Coding Price Compliance Contract Match VAT/GST Compliance Qty Threshold Unit Amt Threshold Invoice Number Invoice Date Ship to Address Bill-to Address Error Invoice Exception SUPPLIERS AR 12

13 Complex Invoices directly again Contract Price Book Compliance Complex Invoicing Supplier View Invoice Against Contracts by Suppliers Direct compliance to Rate Terms Complex Rate Term modeling Immediate validation back to Suppliers Field Approval (optional) Approval of service delivery Mobile access & handling 13

14 Entries for Complex Project Categories Network based management of service entry collaboration Supplier View BUYERS Procurement Complex Invoicing Field Engineer Finance/ Service Entry Sheets & Invoice Creation Easy Entry of SES s by suppliers conforming to Service POs (line & sub line compliance) Flip approved SES s into Invoices to assure invoice compliance Contract Compliance & Mobile Approvals (optional) Automated and direct compliance to contract data Mobile , PDA, ipad approvals & visibility 14

15 Complex Invoicing Service Entry for Orders (cont) Complex Invoicing Supplier View Suppliers can do service entry for confirmed PO 15

16 Complex Invoicing Ad-hoc line items for Service Entries (cont) Complex Invoicing Buyers can configure business rules for ad hoc items in the service sheets 16

17 Invoicing Supplier Outbox / Buyer Inbox for Service Entries (cont) Complex Invoicing Complex Invoicing Invoices: Supplier Inbox/ Buyer Inbox Buyers and suppliers have listing of all submitted service entry sheets and related status with filtering logic and export to excel. Suppliers can create invoices for any buyer approved Service Sheet Suppliers can create invoice for multiple SES s from the same PO. 17

18 Ariba Network for Buyers Value Achieved (SAP and Non-SAP) SAP + Ariba Network Large Entertainment Co. Automation with >2,500 suppliers >16% of suppliers offering early payment discounts Transforming AP into a Profit Center Cut 75% Processing Costs Automation with >4,500 suppliers Integrated with 8 SAP systems Transacting in 50+ countries Cut >30% BPO costs Aligned Interest between Procurement & AP Automation with >4,000 suppliers PSFT + Ariba Network Oracle + Ariba Network MAXIMO + Ariba Network Automation with > 400 suppliers & 300 catalogs in less than 8 weeks PO and Invoice Automation efficiency on >$4.5B in spend Cut 80% processing costs Cut cycle time 70% Eliminated over-spending in field services ($1B+) with Inv against Contracts on Network Improved DPO 5 Days while expanding discounts $1.3M+ in Year 1 Increased Buyer Productivity 30%+ 70% of invoice volume automated in 12 mos on Ariba Network 98.8% touchless invoice rate Key Value Drivers Process Efficiency Effectiveness & Compliance Cycle Times Discounts & Working Capital 18

19 Sellers also benefit from using Ariba solutions Greater Process Efficiency Getting Paid Faster Top Line Revenue Growth Benefits Decrease in PO errors. Approved PO initiates Perfect Order process Decrease in Invoice errors Reduced manual intervention and decreased customer support costs Benefits Provide visibility into when, how much, and what suppliers will be paid for Eliminate misplaced invoices Improve on-time payment and reduce Days Sales Outstanding (DSO) Benefits Increase orders on contract Extend catalog visibility to all end users Participate in Sourcing and Spot Buy events to win new business Reduced order processing costs 75% and 40% reduction in customer service calls Reduced days outstanding by 75% Several customers have grown triple digits through catalogs Order processing costs reduced 30% Dramatically reduced invoices rejected by customer, resulting in significantly faster payment Increase orders on contract for up to an 80% decrease in unauthorized spending at customer 19

20 Recommended Journey for Optimizing Supplier Collaboration Future Phases Improve Sourcing Improve Supplier Management Beginning Phases Improve Automation Improve Discount Savings Connect ERP to Optimize Pay Terms take Network for PO to advantage of Dynamic Invoice processes Discounting 80% electronic $2-3M savings per 1 billion targeted 98% touchless 24%+ annualized rate of 60-80% process cost return on cash reduction 25% of targeted suppliers participating $ Improve Procurement Increase Catalogs Materials & Enable Supplier Self Service of content Increase compliance during transaction process materials & services (POs and Invoice against Contracts) Eliminate over-spending from contract rates Enrich, rationalize and identify sourcing opportunities to drive down costs 30% decrease in sourcing cycle time RFX creation and management Identify and qualify suppliers, negotiate bestvalue agreements Implement supplier agreements, track savings, and manage supplier performance Manage the entire supplier life cycle from discovery to on-boarding to risk and performance management Unify supplier profiles across the company Determine if suppliers deliver on contract Have fact-based conversations with suppliers regarding performance 85% reduction in supplier management costs 20

21 Diana Brown Senior Director, Network Strategy Ariba, an SAP Company Q & A THANK YOU!