Payables can yield great value to procurement and increase strategic importance in the organization. Through supply chain finance, discounting, Pcard, and other payment options, companies can reduce supplier risk and and cost while contributing to strategic working capital initiatives. In this breakout, Aite group analyst Enrico Camerinelli will share why the current environment is ripe for payables optimization and how this yields enormous benefits to procurement and finance leaders.

1. PUBLIC
Robert Grimes, SAP Ariba Payables Centre of Excellence (SAP)
Enrico Camerinelli, Senior Analyst, Aite Group
June 2017
5 Reasons Why Payables
Makes Procurement Awesome

2. 5 Reasons
Robert Grimes, SAP Ariba Centre of Excellence EMEA (SAP)

3. 3PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Delivering does not actually mean just survival.
Innovation needs cash.
Access to low-cost funding, or even just funding, is always welcome.
Reason #1: Vital to ensure suppliers have enough liquidity to deliver

4. 4PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Discounting generates income for the buyer and creates
flexible cash flow for the supplier.
Supply chain financing offers low-cost lending to the supplier
and helps increase free cash flow for the buyer.
Certainty of payment means efficiency, assurance, and
confidence for both parties.
Reason #2: Income, risk, and cash all improved

5. 5PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Cash rich means opportunities to use your own cash for
early payments, with a discount.
Cash constraint means using a funder’s cash to provide
early payments to the suppliers.
Reason #3: Market changes from cash rich to cash constraint

6. 6PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Suppliers may not like extended terms, but
they do like available cash.
Suppliers that can react to your innovation and
investment cycles mean good business for all.
Reason #4: A good supplier relationship makes for good terms
%

7. 7PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Reason #5: All other optimization opportunities exhausted
Supply chain
financing
Card
payments
Dynamic
discounting
%

8. 8PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Reason #6!! All done on a single platform means good for everybody!
buyer supplier
SAP Ariba Payables
 Optimize days sales outstanding
 Improve supplier relationship
 Leverage early payment liquidity options
 Increase free cash flow
 Leverage excess cash
 Optimize payment terms
 Mitigate liquidity risk with true multifunder options
 Take advantage of low rates of funding
 Have a single integration point
 Optimize payment processes
 Gain visibility on the payment
 Lower supplier bank account maintenance costs
 Lower payment investigation costs
Funders
Payment processor
New capabilities to monetize trading collaboration

9. The Supply Chain Finance Network
Enrico Camerinelli, Senior Analyst, Aite Group

10. ©2017 Aite Group LLC.Page 10
The Supply Chain Finance Network
June| 2017

11. ©2017 Aite Group LLC.Page 11
Financing the Supply Chain: What To Do
Supply Chain Finance is defined as the use of financing and risk mitigation
practices and techniques to optimise the management of the working capital
and liquidity invested in supply chain processes and transactions. SCF is
typically applied to open account trade and is triggered by supply chain
events. Visibility of underlying trade flows by the finance provider(s) is a
necessary component of such financing arrangements which can be enabled
by a technology platform.
Source: ‘’Standard Definitions for Techniques of Supply Chain Finance’’, ICC Banking Commission, March 2016

12. ©2017 Aite Group LLC.Page 12
SCF Target: Optimize Working Capital
Working Capital =
Accounts Receivable
+ Inventory
- Accounts Payable
Optimized

13. ©2017 Aite Group LLC.Page 13
How To Do it: The SCF Architecture
Proposition
Market Regulation
Organization
Technology
Processes
Onboarding
SCF
Source: IFC

14. ©2017 Aite Group LLC.Page 14
How To Do it: The SCF Architecture
Proposition
Market Regulation
Organization
Technology
Processes
Onboarding
SCF
Source: IFC

15. ©2017 Aite Group LLC.Page 15
How To Do it: The Organization
Source: IFC
Technology
Platforms
Industry
Networks
Industry
Associations
Logistics
Providers
Solution
Providers
Regulators
SMEs
NBFI
Corporations
MFIs
Specialized
Investors
Banks
Market
Analytics
Advisors

16. ©2017 Aite Group LLC.Page 16
How To DO It: The Supply Chain Business Processes

17. ©2017 Aite Group LLC.Page 17
The Supply Chain Business Process Flows
Accounts Receivable
Inventory
Accounts Receivable
Accounts Payable
Accounts Receivable
Accounts Payable

18. ©2017 Aite Group LLC.Page 18
How To Do It: The Technology
B2B Supply Chain Network
SME
FinanceThe B2B SC Network is the gateway
for SMEs to access finance
The B2B SC Network is the gateway
for Finance to access SME data

19. ©2017 Aite Group LLC.Page 19
The Supply Chain Finance Network: Conclusions
Proposition
Market Regulation
Organization
Technology
Processes
Onboarding
SCF
Source: IFC
The B2B SC Network
is the gateway to
access all parties in
the SCF ecosystem
The B2B SC
Network is the
gateway to
detect SC
triggers
The B2B SC Network is the
gateway that connects
demanding SMEs with
offering Finance partners

20. ©2017 Aite Group LLC.Page 20
Enrico Camerinelli
Sr. Analyst
ecamerinelli@aitegroup.com
+39.039.21.00.137
www.aitegroup.com
Aite (pronounced “eye-tay”) Group is an
independent research and advisory firm focused on
business, technology, and regulatory issues and
their impact on the financial services industry.
Visit us on the web and connect with us on Twitter
and LinkedIn.

21. 21FOR WORKSHOP ATTENDEES ONLY© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
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22. Robert Grimes
SAP Ariba Centre of Excellence, SAP Ariba Payables
(SAP)
robert.grimes@sap.com
+44 7808 575 031
Thank you.