Not so long ago, in a galaxy not too far away, procurement and finance organizations lived safely in their silos with separate goals only loosely connected to each other. But with many companies now turbo-laser focused not only on savings, but on working capital improvement, both groups are being called on to contribute to larger corporate goals. This session will highlight the power that finance and procurement teams can access by combining the forces of supply chain finance, dynamic discounting, and AribaPay with a comprehensive supplier strategy to deliver benefits that directly impact balance sheet positions and earnings per share.

1. The Force of Payables Awakens - How Payables
Working Capital Will Change the Game in 2016
Bill Dulin, Discover
Brent Kinman, VP, SAP Ariba
Alan Cohen, VP, SAP Ariba / March 15, 2016
Public

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Agenda
• SAP Ariba’s Strategic Payables Vision
• Why Procurement Should Care (Nitor)
• Why Payables Matters?
• Financial Value of Payables…and Getting Started
• Wrap Up / Q&A

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Discover intro
DISCOVER TO
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Changes are creating new realities
“Old School Payables Thinking”
• Invoices are liabilities: Just “pay ‘em”
• Procurement measured on savings
• Non strategic spend is the core focus
• Disparate capital market approaches
• Point P2P solutions
“New School Payables Thinking”
• Invoices are strategic assets…
discounts, cash-flow, APR, etc..
• Procurement measured on EVA
• All spend “on the table”… various
APRs
• Collaborative capital market
approaches
• One platform: Source, Buy, Pay

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SAP Ariba’s strategic payables vision
To become the world’s preferred platform for
digitized business-to-business payments and
the premier marketplace for secure, real time,
intelligent B2B financial transactions
Ariba
Network
Electronic
Invoicing
Dynamic
Discounting
Supplier
Payment
Supply Chain
Financing
2000 2005 2007 2012
SAP Acquires
Ariba
2014 2016
Card Settlement
Global Expansion
Multiple Financing Strategies
Data Yields Optimal Rates
Beyond 2016

6. Nitor Slides – SAP Ariba Live
3/11/2016 Proprietary & Confidential 6

7. Nitor Model
3/11/2016 Proprietary & Confidential 7
Spend
Analytics
Category
Management
Strategic
Sourcing
Contract
Management
Supplier
Management
Purchasing
Invoice &
Payment
Financial
Management
Advisory. Consulting. BPO.
Key Messages:
1. Nitor is a Procurement Services Firm with deep experience in consulting and technology
1. We span the lifecycle of any Procurement engagement, from Advisory (what should you
do?) to Consulting (how to do it) and arriving at BPO (let’s maximize value)
2. Nitor is the only Procurement Services firm with this laser focus on Source-to-Pay,
offering engagement solutions that fit every need
Source-to-Pay
People - Process - Technology

8. Procurement Toolbox
3/11/2016 Proprietary & Confidential 8
Upstream - Creating Value Downstream - Delivering Value
Spend
Analytics
Category
Management
Strategic
Sourcing
Contract
Management
Supplier
Management
eProcurement
Invoice &
Payment
Financial
Management

9. Traditional Challenges
1. Savings reporting is still a negotiation.
2. We are not always engaged at the right time.
3. Deliver more savings with less…everything.
4. Often diminishing returns on categories already strategically sourced
5. Harder to find ways into non “Corporate” categories
The REAL Challenge:
Where can we add incremental value over the
next 5-10 years?
3/11/2016 Proprietary & Confidential 9
Procurement Challenges

10. 3/11/2016 Proprietary & Confidential 10
Characteristic Metric
Global Economy $80 Trillion
US Economy $18 Trillion (23.8%)
US Debt $19 Trillion
US Personal Debt $17 Trillion
Credit Card Swipes 20 Billion
Credit Card Dollars $19 Trillion
Average Transaction $88 dollars
Invoices Outstanding $19 Trillion
Summary
1. The Global Economy will grow at a moderate pace.
2. Financing & Trade, continue to be cornerstones of growth.
3. Global and National growth means more trillions of dollars will be traded annually.
4. Banks want to expand toolsets to monetize commercial dollars.
Global Finance

11. 3/11/2016 Proprietary & Confidential 11
1. Personal Finance Principles to your Company? 2. Menu of tools to achieve Working Capital?
3. Deliver expanded/new value streams to your
organization that are unquestionable and massive?
4. YOU - could single-handedly grow the
Economy…
What If…

12. 3/11/2016 Proprietary & Confidential 12
Your Company Invoices
Pay Net 60 $100MM
Supplier Financing ($10MM)
Net to Supplier $90MM
Net 60Day 15
60 Day Credit on
$100MM @ 3%
Net $90M
Supplier pays average 2M/month interest
If your suppliers had most of this available as
working capital on Day 15 - what would
they do?
The $10M Question
Monetizing Payables - A Win/Win

13. 1. There is $19T in locked up Capital globally - because it’s the way we have always
done it.
2. Viral model both from a Macro and Micro-economic lens.
3. Creates Partnership while also creating Leverage.
4. This truly has Speed-to-Market.
5. Game-Changing addition to Procurement Toolbox.
3/11/2016 Proprietary & Confidential 13
Priority Strategy - Here is Why

14. Proprietary & Confidential
We have one goal in mind - helping our clients achieve
procurement excellence
Client Success
3/11/2016 14

15. Why Payables Matters?

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The case for payables: “Invoices as strategic assets”
Better for Buyers and Suppliers
EARN EARLY
PAY DISCOUNTS:
Net Income $
EXTEND
PAYMENT TERMS:
Free Cash Flow
PREVENT
PAYABLES FRAUD
Risk Management
BETTER
COLLABORATION:
Competitive Advantage
FASTER
COLLECTIONS
Lower DSO
LOW COST, ON
DEMAND CASH FLOW:
Reduce Costs, No Debt$
FinancialValue
LOW
HIGH
PAYMENT VISIBILITY
& REMITTANCE
Trust & Adoption
Buyers Suppliers

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AnnualSpend
# of Suppliers
• Focus on high
spend suppliers
• >~75% of buyer value
300 2,000 10,000+
• Focus on tail suppliers with low spend
• Trx’l enablement and / or DPO Mgmt
Traditional
SCF*
Payment Terms Mgmt
& Discounts**
• Payment Terms Mgmt:
Supports program strategy, increases DPO
• Discounts: Dynamic, buyer or supplier initiated
P-Card or
Virtual / Settlement Card
* Planned Supply Chain Finance Offering ** Available today via SAP Ariba
Multiple payables working capital strategies
Address core & tail suppliers
AribaPay Card

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Working Capital Management Advisory & Supplier Services
(Payment Terms Standardization, Rationalization, Extension, Supplier Outreach)
SAP Ariba Working Capital Management Solutions
Buyer Banks & Capital Markets
ERP &
Procurement &
Invoice
Automation
Supply Chain Finance
 Supplier sells approved invoices to
Funder at a discount rate based on
Buyer’s credit worthiness
Suppliers Targeted:
Direct Spend
Large to Mid-size
Discount Pro
 Supplier accepts to be paid by Buyer at
a prorated discount before Due Date
Suppliers Targeted:
Indirect Spend
Small-Medium Size
…Pay RightBuy Right...
AribaPay
 Electronic payments to
suppliers
 Bank account data stored
externally
 Supplier self manages bank
account data
 Rich remittance info to match
invoices with payments
 Track & trace status
Funded by
SAP Ariba strategic payables solutions
Supports all invoice, & funding scenarios, complementing SAP Ariba’s P2P, SAP ERP, and
other ERP solutions
ERP
SCF PARTNEROperated by

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WIFM…What’s in it for me?
Payables stakeholders & outcomes
DPO & Discounts are 12–14x more
valuable than transaction automation
(Source: Blue Hill Research)
CEO
CFO
Suppliers
Accounts
Receivable
• Increase margins and earnings per share
• Extend DPO: Income Statement & Balance Sheet Benefit
• Transform A/P from a cost center to profit center
• Enhance controls / risk mitigation
Payables
Outcomes
 > touchless invoices
 > discounts earned
 < A/P Inquiries
 Optimize DPO
 Investment return:
12% - 36%, risk free
 Risk Mitigation:
Bank Account Mgmt
 Provide suppliers
early pay alternative
 Payment visibility
 Engage suppliers
VP Shared
Services
Director,
Accounts
Payable
Corporate
Controller
Assistant
Controller
Treasurer
Assistant
Treasurer
CPO /
VP Supply Chain
Dir, Sourcing /
eBusiness
CIO
Director,
Finance I/T
 1 platform:
Buy Right, Pay Right
 Lower TCO
 Get paid faster
 Easier reconciliation
 Improve cash flow
forecasting

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Buyer
Benefits
Total: $7,200,000
Controls
Reduce supplier
inquiries
Discounts yield
high APR
(12% - 36%)
Supplier
Benefits
Low Cost, On
Demand
Financing
On-line
Payment
Visibility
Accelerated
Payments
Income Statement Impact Free Cash
Flow ImpactInvoices &
Payments:
300,000
A/P Automation
Savings:
$1,200,000
Savings Per
Transaction
$4.00
Increased
DPO: 15 Day
Extension
Free Cash Flow:
$120 Million
Return earned:
3%
Return Earned:
$3,600,000
15 Day
DPO
Extension
DPO
Extension
Free Cash
Flow:
$120 Million
Added Benefits
Illustrative Payables Business Case
Discounts on
$3 Billion
Spend
5% Adoption:
$150 Million
Avg. Discount:
1.60%
Discounts:
$2,400,000

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Now what…“playbook” to getting started
Step1: Define Initial size of the prize to educate and excite colleagues
• “Back of the envelope estimate” in “CFO Speak” i.e. Balance Sheet, Income Statement Cash Flow Impact
of “$X”, alternative revenue needed to get same benefit
Step 2: Governance: Who is the executive sponsor? “Day-to-Day” Lead?
• Bring together leads from Procurement, Treasury & Accounts Payable
Step 3: Distribute agenda for initial cross-functional team meeting?
• Why is “XYZ Industries” thinking about Payables Working Capital?
• What is Payables Working Capital?
• How does Payables Working Capital impact / benefit “XYZ Industries?
• Who is impacted and how? Procurement, A/P, IT, Treasury, Operations, Suppliers
• Alignment: Are People Supportive of Developing Payables Working Capital Strategies?
• Next Steps: Defining “XYZ Industries” Payables Working Capital Priorities

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Why SAP Ariba?
+
Global Successes & References:
Buyers, Suppliers, Funders
Bank’s core competency: lending money
SAP Ariba’s core competency: facilitating B2B Commerce
Selecting SAP Ariba is NOT deselecting a client’s bank
+
SAP Ariba (Largest B2B) Network
User Experience
+
1 Experience Across Sourcing, Buying, & Payables:
Accelerates Adoption, Minimizes Risk, Lowers TCO
+
Proven Success &
Expertise

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