Without connecting invoice processing to the broader source-to-settle process, a procure-to-pay transformation project will have limited success. In this session, you will hear how you can implement a "closed-loop" procure-to-pay process that enforces invoices against catalogs, orders, and contracts; monitors supplier performance; and improves control over your spend.

1. #AribaLIVE
@ariba
Closing the P2P Loop: How AP Drives
Strategic Savings and Compliance
to Procurement
Bradley Hill, Supplier Performance & Evaluation Executive, Al-Futtaim
Automotive
Andrew Bartolini, Chief Research Officer, Ardent Partners
9 June 2015
© 2015 Ariba – an SAP company. All rights reserved.
@andrewbartolini
@ardentpartners

2. #AribaLIVE @ariba
Agenda
• Al-Futtaim Introduction
• Vision, Mission and Customer Values
• Background
• Business Challenge
• Solution - Ariba Procure-to-Pay
• Complexities in Implementation
• Solution Themes
• Results
• Way forward
© 2015 Ariba – an SAP company. All rights reserved.2

3. #AribaLIVE @ariba
Al-Futtaim Introduction
• Part of 80-year-old privately held group
• Dominant market leader
 Multi-billion dollar revenues
 Market share of 40% + in UAE
 Represents 25 top global automotive brands
 Over 250,000 units sold annually
 12,800 employees from 70 nationalities
 Presence in 14 countries across Middle East Asia
& Africa
© 2015 Ariba – an SAP company. All rights reserved.3

4. #AribaLIVE @ariba
Vision, Mission and Customer Values
Vision
To be the auto company of
choice by providing value-based
customer experiences
delivered by an empowered
and engaged workforce
Mission
Customers and Vehicles for life
© 2015 Ariba – an SAP company. All rights reserved.4

5. #AribaLIVE @ariba
Background
• Centralized procurement in 2008
• Implemented Ariba Sourcing in 2009
 Entire Group now using Ariba Sourcing
 Over 400 online bidding events
 Over USD 40 mn saved (18%)
• Initially handled only Non-Trade spend
• Now handling Non-Principal Trade spend as well
© 2015 Ariba – an SAP company. All rights reserved.5

6. #AribaLIVE @ariba
Business Challenge
• Inadequate Spend Visibility
 Multiple SAP platforms
 Maverick buying
 Cumbersome reporting
• Lengthy Procure-to-Pay Cycle
 No centralized rate contracts
 Tedious PO approval process
 Manual invoices
 Manual 3-way matching for payment
© 2015 Ariba – an SAP company. All rights reserved.6

7. #AribaLIVE @ariba
Solution - Ariba Procure-to-Pay
© 2015 Ariba – an SAP company. All rights reserved.7
Make it Easy Make it Transparent
Finance
Suppliers
Central
Procurement
Approvers /
Senior
Management
Business
Users
… increased realized savings
o Leverage group’s buying power
o Contract Compliance
o Greater Spend Visibility
o Extended supplier network
… spend visibility
o Spend reporting for
monitoring & control
o Mobile PO approval
capability
… supplier enablement
o Timely payments
o Increased process
transparency
o Building strategic supplier
relationships
… item catalogs
o Search and find items
o Quick approval & tracking
o Online contracted rates
… process efficiencies
o On-Time Accurate Invoicing
o Streamlined goods receipt
process
o Tighter control on budget

8. #AribaLIVE @ariba
Complexities in Implementation
• Some Trade purchase is also handled
• Extensive integration with SAP
• Complex and different P2P scenarios for in-scope trade purchase
 Some categories needed pricing conditions and some batch numbers
 Advance Shipping Notifications for accessory procurement
 Procurement triggered from job cards and sales orders
• Supplier Adoption
 None of our suppliers were on the Ariba Network. Concept very new to the Middle East
 Supplier apprehension about Ariba Network fees
• User Adoption
 700+ users scattered across 100-plus locations
 Well-entrenched As-Is process
© 2015 Ariba – an SAP company. All rights reserved.8

9. #AribaLIVE @ariba
Solution Themes
• Scope Definition – Striking the Balance between SAP-MM and Ariba Procure-to-Pay
 Detailed Spend Analysis to support the scope
 Customizations wherever possible to bring spend in scope
 Keep customer-facing spend out of scope
• Supplier Education and Training
 Was done well in advance so as to address any challenges before go-live
 AF-Auto and Ariba team educated suppliers on the benefits through hands-on training sessions
in three waves
 For key strategic suppliers, one-on-one sessions carried out before the trainings
• OCM and User Training
 Engage and communicate with key stakeholders at right time
 SOPs, Training Collaterals and Online Transaction simulations were made
available to the users
 Train the Trainer approach – Wider reach and business ownership
© 2015 Ariba – an SAP company. All rights reserved.9

10. #AribaLIVE @ariba
Results
Q4 2014 + Q1 2015 data
• 65 % of transactions fast tracked through Catalogs
 170 catalogues with 7000 + line items
• 96 % of 3rd party POs electronically transmitted through the
Ariba Network
• 36 % reduction in PR to PO turn around time
• 93% of invoices processed through automatic IV
• 97% of POs without rework
© 2015 Ariba – an SAP company. All rights reserved.10

11. #AribaLIVE @ariba
Way Forward
• Leverage the reporting capability of the tool
 Monthly spend visibility reports for Managing Directors
 Reports for category specialists to identify new sourcing
opportunities
• Enhance the existing solution
 Buying against budget
• Drive Supplier Performance Management
 Track on-time delivery through P2P
© 2015 Ariba – an SAP company. All rights reserved.11

12. #AribaLIVE
@ariba
Closing the P2P Loop: How AP Drives
Strategic Savings and Compliance
to Procurement
Andrew Bartolini, Chief Research Officer, Ardent Partners
9 June 2015
© 2015 Ariba – an SAP company. All rights reserved.
@andrewbartolini
@ardentpartners

13. #AribaLIVE @ariba
Agenda
• Introduction
• P2P in 2015
• Closing the P2P Loop
• Summary
© 2015 Ariba – an SAP company. All rights reserved.13
@andrewbartolini @ardentpartners

14. #AribaLIVE @ariba
Andrew Bartolini
• This is a content bullet
 This is a content sub-bullet number one
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© 2015 Ariba – an SAP company. All rights reserved.14
 Chief Research Officer, Ardent Partners
 Publisher, CPO Rising & Payables Place
Summary
 Recognized expert in sourcing, procurement, AP, and supply management
 Advisor to solution providers & CPOs alike around the world
 Presented more than 200 times in seven countries
 Benchmarked 10,000+ enterprises across all facets of their supply management operations
 Published 1000+ research reports, analyst insights, articles, and other briefs
 Named a “Pro to Know” by Supply and Demand Chain Executive three times
Experience
Decade plus as Industry analyst. Leadership roles in sales, marketing, and services at Ariba and Commerce One. Rich experience in strategic
sourcing, business process transformation, and software implementation. Background also includes consulting and investment banking.
Education
 MBA – Indiana University
 BA – College of the Holy Cross
@andrewbartolini @ardentpartners

15. #AribaLIVE @ariba
Ardent Partners - Introduction
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 This is a content sub-bullet number one
 This is a content sub-bullet number two
 This is a content sub-bullet number three
• This is a content bullet
 This is a content sub-bullet number one
© 2015 Ariba – an SAP company. All rights reserved.15
Ardent Partners is a research and advisory firm focused on
defining and advancing the supply management strategies,
processes, and technologies that drive business value and
accelerate organizational transformation within
the enterprise.
@andrewbartolini @ardentpartners

16. #AribaLIVE @ariba
CPO Rising: The site for CPOs and
other supply management
executives
www.cporising.com
Ardent’s Network of P2P Sites
Payables Place: Global source
for ePayables news, research, and
analysis
www.payablesplace.com
© 2015 Ariba – an SAP company. All rights reserved.16
@andrewbartolini @ardentpartners

17. #AribaLIVE @ariba
New Research
© 2015 Ariba – an SAP company. All rights reserved.17
@andrewbartolini @ardentpartners

18. #AribaLIVE
@ariba
P2P in 2015
© 2015 Ariba – an SAP company. All rights reserved.
@andrewbartolini
@ardentpartners

19. #AribaLIVE @ariba
22%
4%
2006 2011
Motorola Market Share:
Mobile Phones
Key Takeaways:
• Joy’s Law: “Innovation will happen, and it will
happen elsewhere.”
• Innovation extends to all supply markets
• A ‘static’ supply base is now a red flag
• No company can risk going it alone
• Increasing reliance on suppliers
• Suppliers are vendors assets
Why P2P Matters
© 2015 Ariba – an SAP company. All rights reserved.19
@andrewbartolini @ardentpartners

20. #AribaLIVE @ariba
The CPO’s Top Priorities (Next 3 Years)
© 2015 Ariba – an SAP company. All rights reserved.20
@andrewbartolini @ardentpartners

21. #AribaLIVE @ariba
But, Should Your Procurement Dept. Be
Doing Better?
© 2015 Ariba – an SAP company. All rights reserved.21
90%
3%
7%
Yes
No
Not Sure
© Ardent Partners - 2015
@andrewbartolini @ardentpartners

22. #AribaLIVE @ariba
What’s Holding Procurement Back?
22
38%
37%
35% 35%
Challenges aligning
processes and
systems
Staff/Talent
constraints
Budget constraints Lack of technology
infrastructure (i.e.
gaps)
© Ardent Partners - 2015
© 2015 Ariba – an SAP company. All rights reserved.
@andrewbartolini @ardentpartners

23. #AribaLIVE @ariba
Collaboration Will Drive P2P Forward
© 2015 Ariba – an SAP company. All rights reserved.23
Procurement: “Strong” Collaboration
@andrewbartolini @ardentpartners

24. #AribaLIVE
@ariba
Closing the P2P Loop
© 2015 Ariba – an SAP company. All rights reserved.
@andrewbartolini
@ardentpartners

25. #AribaLIVE @ariba
What Do We Mean by Source-to-Settle?
Spend
Analysis Sourcing Contract
Management
Procurement Accounts
Payables
Source to Settle
© 2015 Ariba – an SAP company. All rights reserved.25
@andrewbartolini @ardentpartners

26. #AribaLIVE @ariba
AP’s Impact on Sourcing
• Sourcing
 Better spend detail
 Prioritize sourcing projects
 Better sourcing execution
 Communicate “true” opportunity to suppliers
 Smarter negotiations
 Higher-value contracts/suppliers
© 2015 Ariba – an SAP company. All rights reserved.26
@andrewbartolini @ardentpartners

27. #AribaLIVE @ariba
AP’s Impact on Contract Compliance
• Contract Management
 Better visibility
 Increase compliance (No PO, No Pay)
 Reduce maverick spend (compliance audits)
 Save money and reduce risk
© 2015 Ariba – an SAP company. All rights reserved.27
@andrewbartolini @ardentpartners

28. #AribaLIVE @ariba
AP’s Impact on Procurement
• Procurement
 More spend under management
 Better execution and results
 Internal process efficiencies
 Expanded and shared visibility for improved relationships
© 2015 Ariba – an SAP company. All rights reserved.28
@andrewbartolini @ardentpartners

29. #AribaLIVE @ariba
AP’s Impact on Supplier Management
• Supplier Performance Management
 Visibility to better track and improve supplier performance
• Supplier Relationships
 Visibility to better track and improve supplier performance
 Drive efficiencies on a single platform
 Visibility on invoice and payment status
 Opportunities for discounts and other win-win deals
© 2015 Ariba – an SAP company. All rights reserved.29
@andrewbartolini @ardentpartners

30. #AribaLIVE @ariba
AP’s Impact on Cash
• Optimize Working Capital
 Faster invoice processing
 Greater visibility
 Early pay discounts
 Dynamic discounts
 Supply Chain Finance
30 © 2015 Ariba – an SAP company. All rights reserved.
@andrewbartolini @ardentpartners

31. #AribaLIVE
@ariba
Summary
© 2015 Ariba – an SAP company. All rights reserved.
@andrewbartolini
@ardentpartners

32. #AribaLIVE @ariba
Closing the P2P Loop
• AP Automation
 Drives procurement value
 Impacts cash
 Drives internal efficiencies
 Completes source-to-settle process
32 © 2015 Ariba – an SAP company. All rights reserved.
@andrewbartolini @ardentpartners

33. #AribaLIVE @ariba
Summary
• Place more spend under management and improve
procurement’s effectiveness
• Better sourcing for better results
• Improve contract compliance and reduce maverick spend
• Track and improve supplier performance
• Improve supplier relationships
• Improve internal relationships
• Optimize working capital
33 © 2015 Ariba – an SAP company. All rights reserved.
@andrewbartolini @ardentpartners

34. #AribaLIVE @ariba
Andrew Bartolini
Chief Research Officer
abartolini@ardentpartners.com
@andrewbartolini
Contact Info
© 2015 Ariba – an SAP company. All rights reserved.34