Strategic Sourcing: It's Not Just About the Price

Victoria Vasilevich Folbigg and Tom Haythorn, SAP / August 30, 2016
Strategic Sourcing: It’s Not Just About the Price
Public

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 2Public
Important information
This information reflects the status of SAP Ariba solution planning as of June 2016. All such
information is confidential information (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 SAP or Ariba to any particular course
of business, product strategy, and/or development. Its content is subject to change without
notice. SAP and Ariba assume no responsibility for errors or omissions in this document. SAP
and 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.

Today’s agenda
Introduction
 Three Things About Sourcing
 Global Trends in Sourcing
 How Do SAP Ariba Solutions Drive Value?
Why Strategic Sourcing?
 Spend Analysis Value and Demo
 Strategic Sourcing Value and Demo
 Contract Management Value and Demo
Summary and Q&A

Introduction
Tom Haythorn
Procurement Solution Consultant
Victoria Vasilevich Folbigg
Senior Director, Value Engineering

How much control do you have over your spend?
 Do you know who your top 20 suppliers are and how many active suppliers you have?
 Do you know which contracts will expire within the next 30 days?
 How long does it take you to find and qualify a new supplier?
 Can you swiftly generate a report that shows you all your spend with your suppliers for a month or a year?
 Can you see whether your spend is increasing or decreasing as compared to the same period last year?
 Do you know how much savings you will be able to achieve quarter on quarter?

Global trends are driving change to sourcing and procurement
The CPO’s view of 2016: MORE challenging

The CPO’s top priorities (2016–19)
√

Best-in-class procurement maturity framework
Best-in-class impact on US$1 billion = $31.2 million in extra savings

Best-in-class technology advantage

Analyze
spend
Source
Contracts
Procure
Invoice
and pay
Manage
cash
Price reduction
Cash management
Process improvement
Value
levers
THE WALL
Spend compliance
How do SAP Ariba solutions drive value?

How do SAP Ariba solutions drive value?

Visibility into savings and spend

Ariba Spend Visibility
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 14Internal
Leading classification accuracy
Over 4 trillion spend classified
underpinned by Ariba services
Minimum
90% accuracy
Current systems
Raw data loaded
into Ariba Spend
Visibility portal
(input)
Ariba Spend
Visibility portal
Market data
benchmarks
Enriched data
loaded to portal
(output)
Quality
assurance
Intelligent
commodity
classification
Supplier data
enrichment
1 2
4 3
5

A strategic focus
Source

Value proposition
According to A. T. Kearney:
 E-sourcing increases percentage of spend sourced from 0-35% to as
much as 98%.
 The time per sourcing event decreases from weeks/months to
hours/days.
 Cost savings may be 15%+ after e-sourcing implementation.

Ariba Sourcing
Quotes and
tenders
Auctions
Supplier
discovery
Tools
ProjectsTemplating
Process
management
Workflows
Full support Supplier supportBuyer support
In the tool “Check
my Event”

A strategic focus
Source

Value proposition
 Do you have easy access to all your contracts with your suppliers?
 What percentage of your contracts are signed on supplier T&Cs?
 Can you easily track your rights and liabilities and those of your suppliers?
 How long does it take you to sign a contract with a supplier?

Contracts
Tasks
Attributes
Expiration
Owner
Renewal
Amount
Department
Commodity
Product
Team
Documents Drafting
Searchable
repository
Reporting
Audit trail

A strategic focus
Source
8-15%
Immediate
savings
50%
Reduction in
cycle times 15%
Reduction in
admin costs
30%
Lower admin
and legal costs
50%
Reduction in
cycle times
55%
Additional
spend made
compliant
Automatic
opportunity
analysis
Automatic UNSPSC
classification
Automatic supplier
enrichment (D&B)

Software as a service data security
With SAP Ariba solutions, your sensitive contract data is secure
Physical security
 24x7 guarded servers
 Surveillance cameras
 Motion detectors
 Limited access
 Biometric access control
Data security
 Three layers of firewall protection
 HTTPS – 128 bit encryption
 Intrusion detection system to monitor traffic for anomalous behavior
 Password encryption with expiration
 Access control entries on load balancers
Availability and reliability
 99.5% uptime
 Comprehensive backup schedule
 Redundancy at all tiers: Web, application, database
 Proactive notification of downtime
 24x7 disaster recovery plans and centers
Security certification
 WebTrust audited every six months
 Independent CPA has determined SAP Ariba solutions conform to established principles
 WebTrust principles: security, availability, processing integrity, privacy, confidentiality
 Hosting facilities in the USA and EU and SAS70 certified

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Thank you
Contact information:
Victoria Vasilevich Folbigg
Senior Director SAP Ariba
Value Engineering
Address
victoria.folbigg@sap.com
Tom Haythorn
Procurement Solution
Consultant
Level 7, 168 Walker Street
North Sydney, NSW, 2060
tom.haythorn@sap.com
#SAPAribaLive

Strategic Sourcing: It's Not Just About the Price

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