A wise man once said Spend Management is a journey not a destination. Achieving sustained year-on-year benefits in your spend management initiative calls for a balancing act across multiple fronts – analytics, sourcing, contracts, suppliers and operational procurement. Your company may have achieved some early returns in sourcing savings or procurement compliance. But how do you keep the momentum going? In this session, we will explore how a truly integrated source-to-settle process offers a tremendous ROI, with spend analysis driving effective sourcing, well-managed suppliers, and contracts compliantly purchased off of. You’ll learn how a successful journey begins with the vision and a solid business case, and continues through effective deployment of technology and the necessary process change management.

1. #AribaLIVE
Driving Continuous Improvement and Value
in Your Spend Management Initiative
@ariba
Speakers
• Joe Fox – Ariba, an SAP company
• Neil Campbell – Aviva

2. Agenda
• Introduction
• Panel Presentations
 Power of Networked Collaboration
 Aviva’s Journey to Procurement Excellence and Continuous Improvement
• Key Takeaways
• Q & A
© 2014 Ariba – an SAP company. All rights reserved.2

3. #AribaLIVE
Driving Continuous Improvement and
Value in Your Spend Management Initiative
@ariba
Joe Fox – Vice President
Ariba – an SAP Company

4. Top Challenges
for Organizations
© 2014 Ariba – an SAP company. All rights reserved.
Source: Hackett Group - 2013 Procurement Issues Study
• Reduce overhead cost
• Increase operational
agility and flexibility
• Improve customer
service satisfaction
4

5. The Reality of
Procurement 2013:
© 2014 Ariba – an SAP company. All rights reserved.
Source: Hackett Group - 2013 Procurement Issues Study
• Pressure on margins
• Expand complex indirect
categories spend
• Focus on risk
2013
2012
5

6. The Networked Enterprise
Collaboration is improving productivity and profits
41%
Improved collaboration across silos
55%
Better information
sharing
24%
increased
revenue
77%
Increased access
to knowledge
63%
Increased marketing effectiveness
43%
Greater market
share 8%
Higher margins
“Networked enterprises were 50% more likely than their peers to have increased
sales, higher profit margins, gain market share, and be a market leader.”
*Source: McKinsey on Business Technology, Spring 2011 – “The Rise of the Networked Enterprise”
“Increasingly companies
are embracing
collaboration as part of
their strategy to grow.”
© 2014 Ariba – an SAP company. All rights reserved.6

7. © 2014 Ariba – an SAP company. All rights reserved.
“Increasingly companies are
embracing collaboration as part
of their strategy to grow.”
Digitized and Intelligent Collaboration
Inter-Enterprise Collaboration is the New Competitive Competency
“The underlying benefit of cloud computing is improved collaboration, both within
the organization and externally… trading partners benefit from being able to
collaborate using a common platform.”
“Tighter collaboration with customers,
suppliers, and partners, achieved by
having a tech-savvy supply chain is
key to steering through unpredictable
economic environment.”
7

8. Spend Management Evolution
…from Visibility to Collaboration
Procurement Management Cross Process/LoB Value
Sourcing Management Inter-Enterprise Value
Contract Management B2B Collaboration
Invoice Management Process on Mobile
Payment Management Commerce Insights
Business Network Community Commerce
Buyers Save – Sellers Grow – Both Manage Cash
Innovation Continues
Next 15 YearsLast 15 Years
© 2014 Ariba – an SAP company. All rights reserved.8

9. Specialize and Synchronize and Coordinate
© 2014 Ariba – an SAP company. All rights reserved.9

10. LoB Collaboration and Coordination
…My process helps your process helps my process
Buyers Save – Sellers Grow – Both Manage Cash
CPO as the Conductor/Facilitator of Cross Process
and Cross LoB & Network Spend Management Value
© 2014 Ariba – an SAP company. All rights reserved.
Processes
Contracts
Receiving
LoB’s
Purchasing
Inventory
Suppliers
Payment
Payment
Supply Chain ServicesWarehousing
Legal Procurement
Accounts
Payable
Treasury
Supply
Chain
Government
CPO
10

11. Cross-Process Value = New Value Creation
… Key to a Successful Spend Management Strategy
© 2014 Ariba – an SAP company. All rights reserved.
Analyze
Spend
Source Contracts Procure Invoice Pay
Identifying Value Realizing Value
Price Optimization Cash ManagementProcess Improvements Spend Compliance
Upstream Need
• Line Level Invoice Paid Data for Sourcing
• Supplier Performance Data for Analysis
Gives
• Contract Pricing for Compliance/Inv Match
• Supplier Information for Vendor Master Management
Downstream Need
• Contract Terms, Pricing and Payment Terms
• Supplier Contracted Pricing and Content
Gives
• Receipt Date, Paid Invoices, Vendor Master
• Demand Actuals, Realized Savings, Discounts Collected
11

12. #AribaLIVE
Driving Continuous Improvement and
Value in Your Spend Management Initiative
@ariba
Neil Campbell – Senior Manager
Aviva Procurement

13. Presentation title here 00.00.00 page 13
Driving Continuous Improvement and Value in
Your Spend Management Initiative
The Aviva story
Neil Campbell
Senior Category Manager, AVIVA Procurement

14. Aviva
• Aviva is a life, general and health insurance business and provides asset
management services.
• We are the largest insurer in the UK and we have strong businesses in selected
international markets.
• Our products help 34 million customers enjoy the peace of mind that comes from
managing the risks of everyday life.
• With a 300 year history, insurance is in our DNA. Whether it is our strength in
analytics, claims management or distribution, we have world class capabilities
• We aim to become the insurer customers would “most recommend” to their friends
and family.

15. Aviva Procurement
• Group Procurement
Indirect 3rd party expenditure
Main categories of spend include - I.T hw/sw, Marketing, Consultancy
Global annual expenditure £2.2bn.
• Supply Chain Procurement
Direct expenditure to service insurance claims
White goods, motor repair network, trade and legal services,
£1.1 bn annual expenditure
Diverse Supply Chains and market conditions.
Common Procurement processes employed across teams.

16. CATEGORY MANAGEMENT
Aviva Procurement Process Framework
Procurement
Strategy
Procurement
Operational
Management / People /
Finance / Planning
PLAN PROCURE
MANAGE
SUPPLY
Governance, Monitoring,
Quality Assurance, Support,
Reporting
Customer need
Customer need
satisfied
Aviva vision,
mission and values
Category Management approach
delivered, evidenced and optimised
through Ariba

17. CATEGORY MANAGEMENT
• Underpinned by Ariba process and task discipline, surveys and Spend Analysis.
• Knowledge Project functionality used to drive consistent, repeatable process and provide current document templates.
• Utilisation of SIPM module to
- Run Market Assessment Surveys
- Deliver insight via analytical and compound reports on supplier and project activity direct to custom dashboards.
• Multiple additional Knowledge Projects used to partition key information.
- Supplier Financial Assessments
- Compliance MI
- Link from Projects to individual knowledge areas.
PLAN PROCURE
MANAGE
SUPPLY
Analyse trends & challenge
the business needs
Know the marketDefine the commercial
strategy

18. …so what does it look like ?

19. …….pre-requisite step
• Segmentation happens at outset of
Sourcing Activity.
• Categorised based on risk metrics and
annual expenditure.
• Midpoint (£) set to ensure top 80% of
spend covered PLUS all Business
Critical arrangements.
• Classification dictates process and
rigour applied during Sourcing.
• Additional Supplier Preferencing score
applied post contract.
• Any supplier classified as A or B forms
part of our managed supply and is
subject to quarterly compliance review.
Supply and Contract segmentation
CATEGORY MANAGEMENT
PLAN PROCURE
MANAGE
SUPPLY

20. Sourcing Project created for every Procurement activity.
- This step creates functional Book of Work and Savings pipeline.
- Procurement can only claim savings from within a Sourcing Project. (Savings D Form)
- Different sourcing templates created for new requirements and renewals.
Sourcing Events (RFI / RFP / Auction / Surveys)
- Auctions mandated in 2014 - suitability matrix and process deployed across Book of Work.
- Sourcing Library for current best practice content …….. 5 years of historic re-useable content.
- Event Support team and process established
- Sourcing Events evaluated in Ariba. (scored, weighted, graded, consensus)
CATEGORY MANAGEMENT
PLAN PROCURE
MANAGE
SUPPLY
Source in line with
commercial strategy
Embed spend controls
in i-Procurement
Meet saving target
Underpinned by Supply Market segmentation, Ariba process, event and task discipline.
Ariba overview screen customised to allow key information to be recorded.

21. CATEGORY MANAGEMENT
PLAN PROCURE
MANAGE
SUPPLY
…….so what does it look like?

22. CATEGORY MANAGEMENT
PLAN PROCURE
MANAGE
SUPPLY
Manage supply
chain risk
Maintain business fit
through term
Contracts delivering
and risks managed
Underpinned by Contract segmentation, Supplier Classification, Ariba process, event and task discipline.
Key supplier arrangement identified as Managed Supply.
Supplier Performance Management Project established for every contract and Supplier relationship.
ACW record created for every contract.
Surveys and scorecards initiated to track and manage
-Supplier and Contract Risk
-Customer Satisfaction
-KPI and SLA’s

23. …SPM and ACW project structure
Managed Supplier
Contract
Management 1
Contract
Management 2
Contract
Management 3
SPM Performance Management
ACW
Contract 1
Contract 2
Contract 3
SPM
Projects
CATEGORY MANAGEMENT
PLAN PROCURE
MANAGE
SUPPLY

24. • Process framework embedded across all Supply and Contract Classifications.
• Rigour and frequency determined by A, B or C rating.
• Process driven through Ariba SPM to ensure compliance and collaboration.
• Consistent internal approach and Supplier experience on contract management tasks.
CATEGORY MANAGEMENT
PLAN PROCURE
MANAGE
SUPPLY
…process rigour

25. ARIBA LIVE EXAMPLE APRIL 2014
…so what does it look like?
Conditions, Ownership and Templates
Contract Classification
entered at set-up stage.
Additional conditions
based on other fields.
Individual templates for Supplier and
Contract management
activity……..now updated for 2014!
Supplier Owners
clearly defined
CATEGORY MANAGEMENT
PLAN PROCURE
MANAGE
SUPPLY

26. ….. so what does it look like?
Recurring phases, Tasks, owners, dates
CATEGORY MANAGEMENT
PLAN PROCURE
MANAGE
SUPPLY

27. Lessons learned
• Lessons learned
o Senior sponsorship and mandate is vital.
o Learning curve on Ariba software, be prepared to support users.
o Process must be agile. Ensure appropriate change mechanisms in place.
o Supply arrangements must be classified correctly or resource challenges arise.
o Collaboration brings challenge around resource, accountability and capability.
o Ownership of tasks and projects needs to be clear.

28. Summary
• This is an evolving programme for Aviva, we are now on release 4 of our
framework
o Increase in consistency, capability, documentation and approach.
o Steady increase in compliance to task and activities.
o General trend shows reduction in supplier / contract risk.
o RFP and Auction volumes increasing, £ benefits being realised.
o Continue to refine and embed in UK and other markets.

30. Summary - Wrap Up
Align Results to Objectives Build Collaborative Relationships and
Obtain Executive Sponsorships
Be Flexible
ACCELERATE SAVINGS, IMPROVE COMPLIANCE & MITIGATE RISK!
© 2014 Ariba – an SAP company. All rights reserved.30

31. Thank you
Q
A&
Contact information:
Sundar Kamakshisundaram
Sr. Director – Global Solutions Marketing
E: sundar.kamak@sap.com

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© 2014 Ariba – an SAP company. All rights reserved.