Find out why it's time to connect the last mile, when it comes to Source-to-Settle.

1. Source-to-Settle
Why It’s Time to Connect
the Last Mile
October 23rd, 2014

2. Today’s Speakers
Global Vice President, Audience Marketing
for Line of Business Procurement
Emily drives the direction and market
awareness for the portfolio of procurement
solutions at SAP to ensure customer value
and business growth. She brings 20 years of
experience in high tech marketing and
management consulting to SAP, with prior
procurement and sourcing-focused
experience at several technology providers
such as Ariba and eBreviate as well as A.T.
Kearney. Emily has a degree in International
Relations as well as an MBA.
Emily Rakowski
emily.rakowski@sap.com
Chief Research Officer & Founder
Andrew is a recognized expert in sourcing, AP
and supply management, having
benchmarked thousands of procurement and
finance departments. He has held leadership
roles in sales, marketing and services at Ariba
and Commerce One in addition to a consulting
and banking background. Andrew has been
named a SDCE “Pro to Know” three times,
and holds both a BA and MBA. Visit his blog
at www.cporising.com
Andrew Bartolini
abartolini@ardentpartners.com
© 2011 SAP AG. All rights reserved. 2

3. World Class Procurement Excellence
…is essential to be competitive
>85% Spend Under Management
8% Annual Recurring Savings
74% Compliant Spend
Source: Ardent Partners CPO Rising 2014
Are you World Class?
© 2011 SAP AG. All rights reserved. 3

4. The Business Case for Procurement Excellence
Spend Optimization Reliability Productivity Innovation
 Improve spend
visibility
 Increase internal
collaboration
 Source more and
better
 Identify and
mitigate supply
risk
 Drive supplier
responsiveness
 Improve quality
and consistency
 Increase
operational
effectiveness
 Integrate the
procurement
process
 Leverage team
knowledge
 Focus on revenue
generation
 Use supplier know-how
and reward
innovation
 Promote
sustainability
© 2011 SAP AG. All rights reserved. 4

5. Inefficient source-to-pay processes result in high costs
 Inconsistent, Incomplete,
and Unclassified Data
 Limited Cost Savings
 Poor Contract
Management
 High Procure-to-Pay
Process Costs and
Adoption Challenges
 Lack of Supplier
Management and
Collaboration
Corporate
buyers
Suppliers
Category managers
Production
Chief
procurement
officer
Contract
managers
Spend Analysis
Contract
Mgmt
Strategic
Sourcing
Procure-to-Pay
Supplier Management
Supply Chain
Product
Development
Finance
Cost
Accounting
© 2011 SAP AG. All rights reserved. 5

6. Efficient source-to-pay processes ensure cost savings
 Achieve Consistent,
Complete, and Classified
Data
 Ensure Sustainable Cost
Savings
 Achieve Comprehensive
Contract Management
 Reduce Procure-to-Pay
Processing Costs and
Gain High Adoption
 Manage Suppliers and
Collaborate Effectively
Corporate buyers
Suppliers
Category managers
Production
Chief
procurement
officer
Contract
managers
Spend Analysis
Strategic
Sourcing
Procure-to-Pay
Supplier Management
Supply Chain
Contract
Mgmt
Product
Development
Finance
Cost
Accounting
© 2011 SAP AG. All rights reserved. 6

7. Let’s get tactical – what does real process integration
mean?
Contract
Mgmt
Spend
Analytics
Sourcing
Operational
Procurement
Invoice
Mgmt &
Payments
Supplier
Management
• Create a sourcing
project from a
report (bringing
over items,
current prices,
total spend,
supplier lists)
• Bring spend
analysis reports
into project
workspace as
reference
• If needed, bring
direct material
information from
MM type module
into sourcing
event
• Place standard
contract clauses
into RFP for pre-agreement
• Bring items,
prices, awarded
suppliers directly
onto draft
contracts
• Bring RFP
responses into
contract as
clauses / SLAs
• Establish vendor
for procurement
use
• Bring approved
contract items,
prices and
payment terms
into global
‘operational
agreements’ /
material info
records
• Publish items /
pricing into
catalogs for use
by employees
• Automated PO
collaboration
• Automated PO or
contract flip
available to
ensure accuracy
• Disputes resolved
collaboratively /
visibly
• Evaluated receipt
settlement when
possible
• Supplier
performance
reported against
spend amounts,
used in sourcing
events, included
as contract SLAs
• Supplier master
data maintained
throughout all
records
• One place to see
all supplier
interactions
© 2011 SAP AG. All rights reserved. 7

8. Integration Status Poll
How closely integrated are your source to pay processes?
 This isn’t even a major consideration yet
 Manual handoffs or very separate applications
 Automated integration in a few places, but not the whole
process
 Fairly clean end-to-end automated integration
© 2011 SAP AG. All rights reserved. 8

9. think BIG
&Start Small
Considerations
 On Demand Solutions
 Modular Capabilities
 Integrated, End to End Suite
 Global Footprint / Compliance
 Shared Service / Multi-Backend

10. AGENDA
 The Current State of “Source-to-Settle“
 Why it’s Time to Connect the Last Mile
 Designing for “Source-to-Settle” Success
10
Copyright © 2014 - Ardent Partners Ltd.

11. WHAT DO WE MEAN BY SOURCE-TO-SETTLE?
Source to Settle
11
Spend
Analysis
Sourcing
Contract
Management
Procurement Accounts
Payables
Copyright © 2014 - Ardent Partners Ltd.

12. TOP CPO PRIORITIES (NEXT THREE YEARS)
12
Copyright © 2014 - Ardent Partners Ltd.
©Ardent Partners - 2014
Innovation

13. TOP STRATEGIES FOR CPOS IN 2014
13
Copyright © 2014 - Ardent Partners Ltd.
55%
47%
42%
32%
© Ardent Partners - 2014
31% 31%
Improve
collaboration
with business
Improve
collaboration
with suppliers
Improve use of
technology (buy
new systems /
improve current
ones)
Implement
stronger
policies and
processes
Improve
collaboration
with the CFO
and other
executives
Optimize current
systems and
processes
Collaboration

14. AP’S TOP PRIORITIES IN 2014
14
25%
23%
Reduce processing costs
Improve reporting and analytics around AP
Improve visibility into invoice and payment
data
Improve collaboration/communication with
procurement
Better link P2P processes and systems
Copyright © 2014 - Ardent Partners Ltd.
31%
27%
37%
63%
Generate discounts on spend
© Ardent Partners - 2014

15. THAT PERSISTENT PAPER PROBLEM
Invoice Formats Payment Formats
15
70%
Copyright © 2014- Ardent Partners Ltd.
30%
Manual Electronic
© Ardent Partners - 2014
44%
56%
Manual Electronic
© Ardent Partners - 2014

16. THE BENEFITS OF ELECTRONIC PAYMENTS
16
24% of all AP groups report
increased accuracy and control
of payment delivery
24% 45% 51%
16
51% of enterprises rate cost
savings as the top benefit seen
from electronic payments
45% of AP groups say that
electronic payments enable
more efficient and streamlined
processing (e.g., review,
approval, execution).

17. AP TRENDS & PREDICTIONS (“LIKELY” IN NEXT 2-3 YEARS)
83% 69% 66% 57%
Greater
involvement in
working capital
optimization
Skill set
required within
AP will change
17 17
Stronger AP &
Procurement
partnership
AP process will
be largely
automated

18. 1 IN 5 CPOS OWNS ACCOUNTS PAYABLE
18
Copyright © 2014 - Ardent Partners Ltd.

19. SUITE ADOPTION RATES
19
Copyright © 2014 - Ardent Partners Ltd.
43.4%
35.9%
© Ardent Partners - 2014
19.9%
Integrated Procure-to-Pay
Suite
Integrated Strategic
Sourcing Suite
Integrated Source-to-Settle
Suite

20. S2S: WHY IT’S TIME TO CONNECT
THE LAST MILE
20

21. WHY SOURCE-TO-SETTLE MATTERS?
21
Copyright © 2014 - Ardent Partners Ltd.

22. WHY SOURCE-TO-SETTLE MATTERS?
22
Copyright © 2014 - Ardent Partners Ltd.

23. WHY SOURCE-TO-SETTLE MATTERS?
23
Copyright © 2014 - Ardent Partners Ltd.
22%
4%
Motorola Market Share:
Mobile Phones
2006 2011

24. WHY SOURCE-TO-SETTLE MATTERS?
24
Copyright © 2014 - Ardent Partners Ltd.
22%
4%
Motorola Market Share:
Mobile Phones
2006 2011

25. WHY SOURCE-TO-SETTLE MATTERS?
Mobile Phones Key Takeaways:
25
Copyright © 2014 - Ardent Partners Ltd.
22%
4%
Motorola Market Share:
2006 2011
 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 partners assets

26. WHY IT’S TIME TO CONNECT THE LAST MILE
Seamless processes capture and retain value
26
Spend
Analysis
Sourcing
Contract
Management
Procurement Accounts
Payables
Copyright © 2014 - Ardent Partners Ltd.
• Efficiently
• Effectively
• Repeatable
• Scalable
Automation amplifies and accelerates the benefits

27. WHY IT’S TIME: 4 PROOF POINTS
• Enterprises that leverage spend analysis into their sourcing
projects save, on average, between 24% - 41% more per
project
• Eliminating any sourcing/contract process gap can reduce
savings leakage by up to 38%
• Best-in-Class enterprises report compliance rates that are
27
Spend
Analysis
Sourcing
Contract
Mgmt.
Procurement Accounts
Payables
Copyright © 2014 - Ardent Partners Ltd.
20%+ superior
• Linking and automating the P2P process can reduce invoice
cost by 40% to 70%

28. Impact on Savings Poll
How much of your negotiated savings do you believe is lost along the
process (between sourcing/contracts, or contracts/procurement, or
procurement/payment)?
 We probably lose over 50% of negotiated savings
 We probably lose over 25% of negotiated savings
 We probably lose over 10% of negotiated savings
 No leakage – we’re rock stars
© 2011 SAP AG. All rights reserved. 28

29. DESIGNING FOR S2S SUCCESS
29

30. RECOMMENDATIONS
 Begin building your S2S business case today
 Develop an S2S blueprint with the end-state in mind
 Place any current programs, systems and processes
into a larger source-to-settle context
30
 Look beyond savings
 Improve communication and collaboration with internal
AND external stakeholders
 Embed the procurement staff in the business
Copyright © 2014- Ardent Partners Ltd.

31. Thank You.
Questions?
© 2011 SAP AG. All rights reserved. 31