The document outlines strategies for creating a robust business case in the procurement-to-pay (P2P) process, emphasizing the need for stakeholder alignment and understanding organizational dynamics. It details a comprehensive framework for achieving value through collaborative business commerce, focusing on performance management, technology enablement, and efficient processes to enhance cost savings and compliance. Additionally, it discusses the importance of assessing readiness and capabilities for successful implementation and ongoing improvements in procurement practices.

1. Building a Powerful Business Case that Resonates with All Key StakeholdersStephen Ellesmere, Director of Business Commerce Enablement Services, Ariba© 2011 Ariba, Inc. All rights reserved.

2. Buyers and Sellers Have Common Goals© 2011 Ariba, Inc. All rights reserved. 2SourceProcurePayMatchmakingMaximizing Negotiated ValueRisk ManagementComplianceProcessEfficiencyContinuousImprovementSellFulfillInvoice &Collect

3. Yet Business Commerce Is Hard© 2011 Ariba, Inc. All rights reserved. 3SourceProcurePayWastedtime andresourceLostnegotiationhistoryPoorvisibility intocomplianceManualad hoccollaborationDelayedpayment;Cash“mis-mgmt”Limitedvisibilityand riskSellFulfillInvoice &Collect

4. In the Next 24 Hours, Ariba Customers Will:Source and sell >$490 million of goods and servicesConduct >105,000 purchase, sales and financial transactionsManage >4.5 million contractsFinance >$2.7 million in paymentsSave their companies >$70 million© 2011 Ariba, Inc. All rights reserved. 4

5. So How Does Difficult Become Easy?© 2011 Ariba, Inc. All rights reserved. 5RoadmapCapabilityDirectionSuccessPlan++=VALUE

6. Who We AreWhat:Business Commerce Enablement is a company-wide operating model focused on the long term and sustainable health of our customers Why:We have a strong interest in our customers’ successNo two customers are alikeOur partnership approach unlocks more benefitsAriba and customers are undergoing an evolution, to become value-focused and outcome-obsessedHow:The focus is on value identification, enablement and realization, with measurement ongoing to ensure the program is achieving stated objectives© 2011 Ariba, Inc. All rights reserved. 6Identifying ValueRealizing Value

7. Understanding of Your Goals and Objectives© 2011 Ariba, Inc. All rights reserved. 7Analyze spend for cost-savings opportunities as well as to identify risks and inefficiencies

8. Improve visibility into financial commitments to better forecast cash needs and accruals

9. Track exceptions to preferred suppliers, standard specs and preferred termsVisibilityCost ReductionIncrease spend visibility and centralize sourcing activity to increase sourcing throughput and rationalize supply base

10. Implement standard, repeatable buying processes (requisition, purchase order, invoice, pay) to ensure user compliance and to control maverick spending

11. Savings on one-time non-contract purchases through demand management and spot purchasing, as well as savings beyond contract at transaction level

12. Utilize consumption history to negotiate/source better pricingFiscal Control & ComplianceRationalize and enforce delegation of authority policies prior to liability being incurred

13. Match invoice, PO, receipt and contract to ensure preferred terms are realized

14. Ensure use of contracted suppliers through approval-to-buy processes to control supplier risk and exposureCash ManagementRealize early payment discounts via shorter invoice processing cycle times with both standing and dynamic discounting options

15. Formalize payment terms and develop extension strategies for days payable outstanding to avoid unintended cash flow drainageEfficiencyNormalize and enrich spend data to drive faster sourcing opportunity analysis

16. Streamline and automate processes relieving administrative burdens

17. Electronic rules-based workflow to improve financial controls and approval efficiencies

18. Improve payment timeliness and invoice processing time

19. Enable a consistent method for managing spend across the organizationConfirm Vision Goals and Objectives - Customer Example Manage total addressable spend through a single solutionReduce cost of managing and processing transactions Reduce supplier risk and improve supplier performance through systematic relationship managementIncrease visibility of products and services procured, prices paid and suppliers used in order to conduct better sourcing activityIncrease realized savings through internal rate, spec and vendor complianceIncrease effectiveness resulting in supply base consolidation, increased spend under mgmt, and increased internal customer satisfactionImprove service mix and value provided to stakeholders© 2011 Ariba, Inc. All rights reserved. 8

20. We Focus on Achieving Rapid and Sustainable Value Across All Aspects of Collaborative Business Commerce© 2011 Ariba, Inc. All rights reserved. 9SELLBUYMarket & SellGreater access to qualified business opportunities and buyers

21. Reduced cost of sale

22. Shortened sales and contracting cycles

23. Increased win rate

24. Expanded share of walletSourceBetter visibility across spend & suppliers

25. Improved access to global network of qualified suppliers

26. Best value agreements that balance cost, performance and riskVALUEProcureEfficient and standardized procurement processes

27. Greater control of all spend types

28. Reduced transaction costs

29. Increased compliance and realized savingsFulfillEfficient and standardized order fulfillment processes

30. Reduced fulfillment and customer service costs

31. Increased compliance

32. Increased customer satisfaction and retentionMANAGE CASHPay

33. Reduced paper and manual processing

34. Improved efficiency and accuracy

35. Intelligent working capital management

36. Improved discount captureInvoice & CollectReduced paper and manual processing

37. Improved efficiency and accuracy

38. Greater visibility into invoice payment status

39. Faster payment

40. Increased access to financing The Focus on Value Incorporates All the Elements of a Successful Program, Not Just Technology© 2011 Ariba, Inc. All rights reserved. 10People & Organization – Assessment of an organization’s internal design, capabilities and capacity. Determination of the structure, roles and responsibilities, staffing, and opportunities for skills development needed to drive success Performance Management –Creation of a balanced scorecard and incentives model that aligns the goals and objectives of the org from top-to-bottom and allows for the monitoring and measurement of successPEOPLE & ORGANIZATIONPERFORMANCE MANAGEMENTVALUETechnology –Enablement of solutions that provide the set of features and functions that optimize business performance in a cost-effective mannerPROCESS & POLICYTECHNOLOGYProcess & Policy – Assessment and determination of processes, policies and process controls at an enterprise, BU and local level

41. The BCE Framework Spans the Entire Program Lifecycle© 2011 Ariba, Inc. All rights reserved. 11Architect – Design detailed future state for the key business components of people, processes, technology and performance management to achieve business case benefits, as well as plan for business process and org changeDiagnostics – Analyze current environment to identify opportunities for improvement, propose future state operating model and success roadmap, and make the go/no-go decision based on the cost-benefit analysisDiagnosticsArchitectPEOPLE & ORGANIZATIONPERFORMANCE MANAGEMENTVALUEDeploy – Implement the future state plan into the day-to-day practices of the organization to foster successful solution deployment and, ultimately, drive adoption and sustain business case benefitsImprove – Evaluate operating environment, identify opportunities for improvement across all components of the organization and move forward to diagnose key areasPROCESS & POLICYTECHNOLOGYDeployImprove

42. How Do You Realize Value?The First Step in the Journey is Success Planning© 2011 Ariba, Inc. All rights reserved. 12Obtain Stakeholder Buy-InConduct Kick OffPerform AssessmentBuild SuccessPlanSocialize program with stakeholders and executives

43. Finalize success plan details

44. Obtain executive support and approval

45. Gather client data

46. Complete questionnaire

47. Conduct stakeholder interviews

48. Perform diagnostic

49. Prepare for workshop

50. Conduct on-site workshop to refine:

51. Program vision

52. Program roadmap

53. Benefits estimate

54. Cost estimate

55. Return on investment

56. Executive summary

57. Confirm problem statement and desired outcomes

58. Review success planning process

59. Identify cross- functional stakeholder team

60. Obtain approval to proceedKey Activities

61. Perform AssessmentBased on Your Data and Your Current Business Landscape© 2011 Ariba, Inc. All rights reserved. 13

62. Build Success PlanOnsite Workshop – Sample Agenda© 2011 Ariba, Inc. All rights reserved. 14

63. What Are P2P Process Groups?© 2011 Ariba, Inc. All rights reserved. 15ProcessCategory:Off-Contract Goods& ServicesSKU-Based GoodsSKU Based GoodsSimple Goods &Services w/ComplexAgreementsRecurring/ 3rd Party/Emergency Goods &ServicesComplex Goods &ServicesBuying Process CollaborativeRequisition via Non-CatalogInvoice Against ContractRequisition via CatalogPO Release Against Contract ContractThree bids and a buy

64. AuditContractContractCatalogPricingCompliance Timesheets

65. Milestones

66. Goods ReceiptGoods or Services ReceiptNo ReceiptGoods ReceiptGoods or Services Receipt

67. No ReceiptFulfillment PO & Milestones/ Timesheets/Goods ReceiptPO & Goods or Services ReceiptContractPO, Contract & Receipt

68. PO & ContractPO & Goods ReceiptInvoiceReconciliationNon-Contracted / Sourced Spend (i.e. items historically purchased infrequently or on a one-off basis)Recurring payments (i.e. rent, lease, etc.)

69. Recurring services (i.e. maintenance, landscaping, janitorial)

70. Office Equipment (Features/Options constrained by user type)

71. Telecom Equipment

72. Multi-Region/ Multi-Division Agreements

73. Office Supplies

74. IT

75. Temp Labor

76. Print

77. Facilities MaintenanceSpendCommodityExamples:EnablementEffortMedium-to-high Medium MediumLow - Medium LowAriba Services ProcurementAriba Procure-to-Pay

78. Value Realization PlanPutting in Place a Category Flight Plan© 2011 Ariba, Inc. All rights reserved. 16BeyondWave IWave IIIWave IIExample

79. Benefits AnalysisValue Levers© 2011 Ariba, Inc. All rights reserved. 17

80. Benefits AnalysisFully Ramped Annual Savings Estimates© 2011 Ariba, Inc. All rights reserved. 18Identifying ValueRealizing ValueFor comparison (addressable spend):Hackett estimates 4.4% savings for P2PAberdeen estimates 14.3% material savings for SourcingThis would equate to $32M in P2P savings and $120M in material savings for Sourcing for Customer Example

81. Program Scope, Timeline and CostsCustomer Profiling© 2011 Ariba, Inc. All rights reserved. 19Customer DrivenAssisted EnablementPartnered EnablementComprehensive EnablementTypical Program CharacteristicsLimited scopeMinimal complexityConservative timeframeExperienced, well-staffed deployment and steady state customer teamLimited adoption riskTypical Program CharacteristicsMedium scopeMedium complexityNormal timeframeWell-staffed team, but limited eProcurement experienceSome adoption riskTypical Program CharacteristicsLarge scopeHigh complexityAggressive timeframeLimited resource availability with limited eContracts experienceHigh adoption riskAriba DrivenMany customers request a scope overview and pricing prior to completing the discovery process in the sales cycle. This leads to a solution that may not fit the customer’s needs or value proposition, as well as the potential for misaligned expectations.In Ariba’s experience, customers fall into one of three tiers based on their enablement needs.

82. Program Scope, Timeline and CostsWhat Best Describes Your Situation?© 2011 Ariba, Inc. All rights reserved. 20Indicators of Readiness/ Presence of Required CapabilitiesTimeline

83. Governance

84. Executive sponsorship and organizational buy-in

85. Availability of resources to dedicate to project

86. Staff tenure

87. Level of process documentation and policy enforcement

88. Track record of driving business change

89. Business and IT working relationship

90. Systems implementation experienceIndicators of Scope/ ComplexityDegree of centralization

91. Spend volume

92. Invoice volume

93. Geography impacted

94. Level of process automation

95. Fragmentation of supply base

96. Functional areas/ solutions involved

97. Number of systems for integrationComprehensive EnablementHighly complex project with a low degree of capabilities and organizational readiness on a large scalePartnered EnablementHighly complex and large scope project accompanied by a high degree of internal capabilities and readinessHighMagnitude of Scope / ComplexityPartnered EnablementModerately complex and smaller scope project coupled with a low degree of internal capabilities and readinessAssisted EnablementModerately complex project with a small scope and a high degree of internal capabilities and readiness LowLowHighDegree of Readiness/Presence of Required Capabilities

98. Program Scope, Timeline and CostsSample Procurement Ops Structure© 2011 Ariba, Inc. All rights reserved. 21Leadership to define, build consensus, publish and communicate

99. Communication

100. Governance & Policies ManagementAriba recommends the following resources/skill sets be available to support ongoing solution adoption and spend management maturity.Staging Tables

101. Master Data Management

102. PO & Receipt Import

103. Testing & TroubleshootingExampleSystem Management- Testing & Troubleshooting

104. Master Data Mgmt/ Integration

105. Configuration/ Service/ Enhancement Requests

106. Dashboard Development

107. Scheduled Reporting

108. Supplier Enablement

109. Catalog Set Up, Validation, Publication

110. Contract Creation

111. Certify Supplier Integration/Testing

112. Supplier Training

113. Balanced Scorecard

114. KPI & Benefits Tracking

115. Spend Analytics Opportunity Assessments

116. Compliance Reporting

117. eSourcing event support & strategy

118. Category design for P2P enablement

119. Stakeholder/Change Management

120. Policy & Procedure Development

121. Coaching local enablement leads

122. Communications & Training

123. Survey Execution

124. Scorecard Definition & Population

125. Continuous Improvement Reviews with Strategic Suppliers

126. Legacy Contract Load

127. Clause Library Management

128. Contract Template AdministrationExecutive SummaryCost/Benefit Analysis© 2011 Ariba, Inc. All rights reserved. 22

129. Gate 1: In-year ROI?© 2011 Ariba, Inc. All rights reserved. 23P2P savings begin in. Improvements will include:-Compliance to sourced agreements

130. Process cost reduction (e.g. in AP)

131. Forced spot sourcing for certain types of purchase

132. Prevent unbudgeted spendSavings through sourcing improvement begin: Greater adoption

133. Stakeholder engagement

134. Event optimisation

135. Support for complex service sourcingBreak-even point is mid-July, based on sign-up mid-March, cautious implementation plan, and early commitment to adopt eSourcing from UK Sourcing teamCost avoidance starts. For example:-Current support costs

136. Hosting costsExecutive SummaryRoadmapMonth 1Wks 3 & 4Months 5 & 6Q2 Y1Q3 Y1Q4 Y1Q2 Y2Q4 Y2Q2 Y3Q1 Y2Q3 Y2Q1 Y3Month 1Wks 1&2Months 3 & 4Month 2Wks 5&6Month 2Wks 7&8Initiate Program Program Charter & PlanProgram & Change MgmtProgram Management: Ongoing program oversight, resource coordination & effort prioritizationChange Management: Stakeholder Analysis, Change Planning, Ongoing Execution Sourcing Future State Design: Org, Process…SourcingEnablementWave 0 Wave 2 Wave 3 Wave 1 Procurement Future State Design:Org, Process & Policy, Tech, Perf. MgmtProcure-to-PayEnablementWave I EnablementWave IIEnablementWave IIIEnablementAP Future State Design:Category & Supplier Adoption & Optimization: Track results, optimize, and improveWorking Capital StrategySpend VisibilitySourcingTechnologyDeploymentSIPMProcure-to-PayASPDiscount Pro© 2011 Ariba, Inc. All rights reserved. 24

137. Questions© 2011 Ariba, Inc. All rights reserved. 25

138. “Safe Harbor” and Confidential Information StatementThis information reflects the status of Ariba solution planning as of January 2011. All such information is the Confidential Information of Ariba (per the contract between our companies), and must not be further disclosed, as stated in the confidentiality clause of that contract. This presentation contains only intended guidance and is not binding upon Ariba to any particular course of business, product strategy, and/or development. Its content is subject to change without notice. Ariba assumes no responsibility for errors or omissions in this document. Ariba shall have no liability for damages of any kind including without limitation direct, special, indirect, or consequential damages that may result from the use of these materials.© 2011 Ariba, Inc. All rights reserved. 26

139. Building a Powerful Business Case thatResonates with All Key StakeholdersStephen Ellesmere, Director of Business Commerce Enablement Services, Ariba© 2011 Ariba, Inc. All rights reserved.