1. A R I B A K N OW L E D G E
N U G G E T S
GAINING COMPLIANCE IN YOUR
ECOMMERCE PROGRAM
When we talk to many of our customers what we find is that the procurement
organization is hearing a lot of negativity from their suppliers and they simply dump it off
on management, etc., without rectifying the issue.
The core issue is -- your company is moving forward with your eCommerce program
and compliance around eCommerce readiness by your suppliers will need to become
more stringent over time. You know this will cut costs on both sides and the Ariba
network is uniquely positioned to help you cut those costs and drive your revenue.
Do you currently have a Buyer Compliance Program?
A successful program should have the following:
• The foundation for Collaborative Commerce communication is the Compliance
Policy
• The Compliance Policy has a direct effect on the effectiveness of supplier
enablement efforts
Components
of a % Targeted Suppliers
Transacting on the Network
Compliance Policy
20% 40% 60% 80%
• Establish an edict
• Internal communication
• Supplier communication Strength of Policy
• Supplier Enablement NCE Best In Class:
Weak Policy: Moderate Policy:
Process* • No Internal • Internal Awareness • Internal Buy-In
Communication • Expectation Set • Expectation Embedded
• Optional Participation • Deadline • Mandatory
• Ongoing NCE Process • No Deadline • Incentive • Deadline
• No Consequence • No Consequence • NCE Process in place
• Inconsistent • Incentive/Consequence
Net 60
$25 paper fee
No paper

2. INCENTIVES/CONSEQUENCES
What is one of the single most important components of a compliance policy that you can do….
Issue an Edict!
Expectation — Inform suppliers of the project and what you want them to do
Deadline — Set a deadline date for enablement
Incentive — Provide an incentive for participation
Consequence — Establish realistic and executable consequences for Non-Compliance
Togetherness — Assure your suppliers that these changes are mutually beneficial; You are in this together
DEADLINES — MAKE SURE YOU SET THESE!
Buyers should set a date for the cessation of transactions outside of the Make sure that
Ariba Network (Paper, Email, Fax, other systems, etc.)
everyone involved
is clear on all the
Deadlines can be set in many ways:
terms of deadline.
• Overall Corporate deadline for paper transactions
This measure is
• Specific allotted time post registration
important to
• Deadline for each enablement wave protect your
business from
Deadlines can be layered: potential
• ACME Corp will no longer accept paper transactions after December damages.
31st
• All suppliers must register on the Ariba network within 4 weeks of
Relationship Request letter
• PO Flip suppliers must begin transacting within 2 weeks of
registration
• Integrated suppliers must begin transact ting within 6 weeks of
registration
• All suppliers targeted on January 1st must be transacting by March
15th

3. INTERNAL
INCENTIVES/CONSEQUENCES COMMUNICATIONS
CAN YOU HEAR ME NOW??
Incentives and or Consequences are often one of the
The largest deterrent to ensuring
most overlooked or under-valued components of the
supplier compliance is
Compliance Policy
conflicting buyer messages!
Incentives and/or consequences give “teeth” to the
enablement request
Your Internal Communication should
Examples of Incentives: include:
• Ability to do business with Customer
• Initiative Announcement letter
• Favorable Payment terms to Internal Resources from
• Preferred supplier designation Executive Sponsor
Examples of Consequences: • Training for Key Stakeholders
• Extended Payment Terms • FAQs/Talking Points for Key
Stakeholders
• Paper Processing Fee
• Periodic reminders of Initiative
• Discontinuation of paper delivery/receipt
(desk drops, buyer Intranet
posting, Email, performance
reviews)
Key Internal Communication Messages
Strategic
Business strategy, expected value and benefits
Program timeline and measures of success
Critical success factors
Operational
Specific operational changes resulting from the initiative
Process, technology and people objectives
Consideration of local operations and impact
Team accountability and involvement, particularly as it relates to
compliance
Actions to be taken to prepare stakeholders
Individual
Impact on individual & team goals and objectives
Individual job and career benefits: “what’s in it for me?”
Specific job requirement changes/impact on roles & responsibilities
Activities and preparation for change resulting from program

4. SUPPLIER COMMUNICATIONS
CAN YOU HEAR US NOW??
The Compliance Policy should be pervasive in all supplier communications:
• Relationship Request Letter
• PO Terms & Conditions
• RFXs
• Business Awards/Contracts
• Payment (Remittance Notes)
• Supplier Intranets, Extranets, etc.
Key Stakeholders should emphasize the Compliance Policy during supplier interaction
Supplier Relationship Request Letter
• The Relationship Request letter should issue an “EDICT”
Togetherness
Expectation
Incentive
Deadline
Consequence

5. NON-COMPLIANCE ESCALATION
Non-Compliance Escalation (NCE) is a key component of the Supplier Enablement process. For buyers with
Supplier Enablement Services, NCE is a joint process that can maximize enablement success
To be effective, the Supplier Enablement Non-Compliance Escalation process must incorporate the
consequences outlined in your “EDICT” . As is the case with software adoption, it would be nice to think that
everyone will just do it because you asked. However, that is usually not the case and having a process in
place to enforce your policy will help your suppliers know exactly what will happen if they do not comply and
give you the authority to follow through with the established policy.
SE Services NCE Process
On Hold Report
Buyer NCE
Contact
Action 1
Reject supplier for
Resolve NCE and
participation in
Ariba Supplier
Collaborative
Enablement resumes
Action 2 Commerce initiative
progress with
supplier
Execute appropriate
Action 3 consequence
Key Collaborative Commerce Policy Questions ....
Is participation in this initiative mandatory?
Do we have a desired deadline date for suppliers to convert from paper
POs/invoices to the Ariba Network?
Should we provide incentive for the supplier to participate? If so, what in-
centives are we comfortable and/or prepared to offer?
Do we want to alter payment terms for suppliers participating in collaborative commerce?
Will we allow a supplier to just receive electronic Purchase Orders? Or, will we only issue electronic Purchase Orders if
the supplier also submits invoices electronically?
Are there any suppliers that we do not want or cannot move to the Ariba Network?
Do we want to incorporate mass recruitment techniques?

6. SUPPLIER ENABLEMENT
NON-COMPLIANCE ESCALATION
P R O C E S S (EXAMPLE)
Enablement NCE Process
Supplier
Supplier resists
Supplier
enablement Yes Process complete
registers?
request
No
Ariba sets supplier
Ariba escalates Ariba escalates Yes
Ariba
status to “Closed”
supplier to NCE supplier to NCE
and assigns Process complete
contact, with contact, with
No appropriate Status
reason code reason code
reason
Buyer
Is supplier still
Active?
NCE Contact
NCE Contact sends NCE Contact
NCE contact
Buyer
appropriate escalates to key
shares result of
response based on Procurement/SC
interaction with
reason code and resource for
Ariba
copies Ariba support
Stakeholders
Procurement/SC
Buyer
Procurement/SC
reports results of
engages with
supplier interaction
supplier
to NCE Contact
In addition to Supplier Enablement, Non-Compliance should also be monitored for:
• Internal compliance by Key Stakeholders
• Registered suppliers that do not transact
• Transacting suppliers that revert back to paper
• Registered suppliers that do not maintain their AN account in good standing
Consequences should be defined for Non-Compliance:
• Internal Non-Compliance – Escalation to Manager, impact on Performance Review, etc.
• External Non-Compliance – Execution of defined consequences in EDICT (e.g. extended
payment terms, paper processing fee, discontinuation of business, etc.)

7. NON-COMPLIANCE ESCALATIONS
SAMPLE PROCESS

8. NON-COMPLIANCE ESCALATIONS
ONGOING PROCESS
TIPS& BEST PRACTICES
1. Executive buy in and support ***(this is the key to all successful policies)
2. Designated Non Compliance Escalation Process owner
3. Ability to flag Ariba Network suppliers in the ERP system
4. ERP report on Ariba Network suppliers that states both paper and electronic transactions
5. Defined Non Compliance Escalation process with consequences
6. Policy Violation Tracking Process (e.g. spreadsheet, database, etc.)
Key Collaborative Commerce Policy Questions …….
Do we have a new supplier set-up process? How does it need to be modified to include supplier set-up on the Ariba
Network?
How do we want to handle one-time vendors? Should they register on the AN?
Should we return paper invoices received after a supplier has registered on the AN?
Can we include supplier participation in collaborative commerce
as a condition for the award or renewal of business with our com-
pany?
What communication channels do we have available to publicize
our collaborative commerce initiative to our suppliers?
Do we have an effective way to communicate our collaborative
commerce policy to internal stakeholders?
Do we have executive buy-in and support for implementing our
collaborative commerce policy?