Positioning Yourself to Win in The Networked Economy

Positioning Yourself to Win in TheNetworked EconomyOctober 2012

Agenda • Challenges that organizations are facing today • Why is it important to embrace the Networked Economy Business Benefits Examples of companies benefiting from it today • How to plan your Networked Economy Initiative • Why partner with Ariba? • Q&A2 © 2012 Ariba, Inc. All rights reserved.

Organizations have focused since the 1900s on increasing Free Cash Flows 20-25% year on year… • Every company has Increase Working initiatives to Capital Turns Reduce inventories Increase Revenue Reduce DSOs – New customers Increase credit period with – New geographies suppliers – New products – New channels Optimize Capital Reduce Costs Expenditure – Direct – Indirect – Services3 © 2012 Ariba, Inc. All rights reserved.

We believe organization will need to look outside their four walls for the next wave of productivity - removing inefficiencies in the extended value chain Community Technology Capabilities 1980’s 1990’s-2000’s Today Desktop OS Backoffice OS Inter-Enterprise OS “Employee Productivity” “Enterprise Productivity” “Value Chain Productivity”4 © 2012 Ariba, Inc. All rights reserved.

Analysts believe that Business Networks willdramatically enhance productivity and valueof organizations -- Buyers -- -- Suppliers -- -- Partners -- “Increase worker “Contribute up to Companies using productivity by $1.3 trillion in business networks are 20-25%” value to reducing requisition to businesses” order cost by 33%* “The social economy: Unlocking value and productivity through social technologies,” McKinsey Global Institute, July 2012 * Supplier Networks v2.0: A Look at Commerce in the Cloud, “Aberdeen Group, April 20126 © 2012 Ariba, Inc. All rights reserved.

Organizations embracing businessnetworks are 50% more likely to bemarket leaders A Networked Enterprise – one that uses collaborative technology to connect internal employee efforts to customers, suppliers, and partners. Customers Suppliers Partners The Networked Enterprise is 50% more likely to: Be a Market Leader Gain Market Share Achieve Higher Margins Increase sales Source: “The Rise of the Networked Enterprise”, December 2010, McKinsey; Jacques Bughin and Michael Chui7 © 2012 Ariba, Inc. All rights reserved.

Why are Networked Businesses Winning? “Collaboration speeds you up and gets you to market…Today that advantage is really decisive.” “Collaborate to Win,” CFO Research, 20128 ** Ariba Confidential© 2012 Ariba, Inc. All rights reserved.

Benefits for buyers  Ariba Discovery SOP for every  Cut costs in A/P by 75%  8 week go live for APC and PO sourcing project  Processing 90% of global spend Automation to extend PeopleSoft  16% average savings through Ariba Network  400+ suppliers enabled  Added P2P, Invoice, Discount Mgmt.  Enabled VAT legal compliance  300+ catalogs enabled  700 suppliers enabled – with 92%  Improved on time payment to >95%  Phase 2: Invoice Automation actively transacting…within 1st year  Simplified and streamlined non-PO  $4.5 billion enabled over the  Capturing discounts on 15% of spend invoice processing – achieved 96% Ariba Network and >17% of suppliers touchless invoicing  Avg. discount APR of 37.5% (tops  Captured pre-negotiated discounts BIC ~23%)  $1 million savings run rate…and growing9 © 2012 Ariba, Inc. All rights reserved.

Benefits for Sellers Faster Payment Lower Customer Service Costs eInvoicing eliminated rekeying, resulting in Reduced manual intervention and errors, 83% lower error rate which reduced DSO lowering processing costs from $8 to $2 by 75% per purchase Reduced average DSO 5.6 days when Reduced Purchase order process from using the Ariba Supplier Network several weeks to a few hours Increase Sales Higher Customer Satisfaction Gained 65% of its new clients directly as a Gained e-business compliance resullt of its Ariba connection. 80% of by joining Ariba as a premium supplier business now comes thru Ariba Network Grew 300% in an account in 3 years while 99% customer retention rates – (10 to saving the customer hundreds of 15% better than industry average, per thousands in spend – a true win-win Forrester) and 30% growth in accounts10 © 2012 Ariba, Inc. All rights reserved.

You could benefit from the networked economy too Pick Your Starting Point Assess Readiness Gain Executive Sponsorship Begin the Journey Focus on Operational Excellence11 © 2012 Ariba, Inc. All rights reserved.

Q& A For more information contact your Ariba salesperson Suggested reading: “The social economy: Unlocking value and productivity through social technologies,” McKinsey Global Institute, July 2012 “Supplier Networks v2.0: A Look at Commerce in the Cloud,” Aberdeen Group, April 2012 “Collaborate to Win: Creating Competitive Advantage in a Networked Economy,” CFO Research, 201213 © 2012 Ariba, Inc. All rights reserved.

Positioning Yourself to Win in The Networked Economy

by Ariba on Oct 09, 2012

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