Presentation taken from the San Francisco Ariba Commerce Summit 2011 on Automation and Collaboration with suppliers.

1. Automate All Spend and
Collaborate with All Suppliers
October 2011
© 2010 Ariba, Inc. All rights reserved.

2. Agenda
• A sense of urgency
• Predicting success
• The 4 “C‟s”
• Collaboration spotlight
• Gauging your chance of success
• Q & A, Interactive discussion
2 ** Ariba Confidential© 2011 Ariba, Inc. All rights reserved.

3. A Sense of Urgency
Connectivity and collaborative with trading partners
PROCESS CHALLENGES
• Risk Management (e.g.
compliance and tax)
• Order-to-Cash
• Procure-to-Pay
BARRIERS TO SUCCESS
• Systems out-of-date, inflexible
• Limited time and resources
• Unclear business benefits
“We see companies shifting a whole range of
business functions to the cloud.”
Edge Zarrella
Performance & Technology Partner, KPMG
© 2011 Ariba, Inc. All rights reserved.

4. What is common among those who succeed?
$5B in spend, 600K transactions annually
Schering Plough, Ariba Live 2011
200% increase in AP efficiency in 2 years $3M Saved from 20 suppliers
Schering Plough, Ariba Live 2011 Albemarle, Ariba Live 2011
Over a Million SKU’s, Ease of Use,
$240M in delivered savings & Innovative Functions
Schering Plough, Ariba Live 2011 Disney, Ariba Live 2011
500 Suppliers, 300 catalogs in under 8 weeks
Global Health Care Company, 2011
P2P deployed in 13 weeks
Major Communications Co, 2011
100% spend under process compliance
Lexmark, Ariba Live 2011
£300M spend reduction
British Airways, Ariba Live 2011
85% process cost reduction
British Airways, Ariba Live 2011
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5. Vision
You will go where you look…
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6. Strong Vision is:
• Clarity
• Coverage
• Commitment (Compliance)
• Collaboration
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7. Clarity:
“A clear vision to reduce external spend £300M”
British Airways
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8. Coverage
“100% spend under process”
Lexmark
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9. Commitment (Compliance)
CIO
“Every non-compliant order must be approved by the CFO”
“3 non-compliant orders are grounds for dismissal”
British Airways
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10. Collaboration is thinking broader
• Connecting Buyer and Seller ERP’s
• All Spend Types
Direct
Simple Indirect
Complex
• Global Networking
10 Ariba, Inc. 2011 All rights reserved.

11. The NEXT WAVE of productivity will happen
beyond the four walls of a single enterprise…
 Technology
 Community
 Capabilities
Productivity
2010s – “Inter-Enterprise productivity”
with Collaboration between Enterprises
2000s – “Enterprise productivity”
with corporate ERP
1980s – “Employee productivity”
with the Desktop
Time
11 © 2011 Ariba, Inc. All rights reserved.

12. The opportunity lies in better collaboration…
Over the past two decades, large global businesses successfully streamlined and optimized
their business processes within the four walls of the business with ERP systems…
-- Key ERP Efficiency Gains --
 Master Chart of Accounts
 Unified item master
 Centralized/Standardized HR & Payroll
 …enabling faster closing of books
Your Company’s ERP
 …enabling internal process streamlining
 …enabling lower inventory requirements
…but no company is an island on to itself…you are part of an extended supply
chain. With your house in order, you must now look to your supply chain and
your relationships with your trading partners for the next wave of savings.
12 © 2011 Ariba, Inc. All rights reserved.

13. The Collaboration Challenge
The difficulty for your business is that all of your trading partners’ ERP systems are not
connected to or compatible with your ERP – leading to business process “choke points”
and friction – which results in missed opportunities and higher transaction costs…
 80% of business-to-
! Supplier „A‟
business transactions
are still completed
manually1…

!
85% of invoices and
Your Company payments are still
paper-based2…
! Supplier „B‟  the estimated size of
this lost economic
opportunity is $650
Billion annually3
Supplier „N‟
1 Celent Communications
2 Aite Group
3 Basex Research
13 © 2011 Ariba, Inc. All rights reserved.

14. Value is in the “white space” that lies between two trading partners’
back-end systems
“The White Space”
Buyers‟ Suppliers‟
Enterprise Apps Supplier Enterprise Apps
Response to inquiry
inquiry
Request for
clarification
Sourcing Negotiations
CRM
Applications Supplier Applications
Catalog network
creation
Catalog
Buying support
interface Order
Procurement Order
transmission Management
Applications Applications
Acknowledge
Change order order
Acknowledge
change
Cancel order
Advanced
ERP Ship Notice Accounting
Exceptions Invoice status
Apps/ ERP
Managing errors
Payment status
Payment
14 © 2011 Ariba, Inc. All rights reserved.

15. The complexity of the business problem quickly demonstrates
itself when you visualize the flows (products, information, money)
between a single business and upwards of 100,000+ suppliers…
Buyer 1 Supplier 1
Sourcing Sales
Procurement Order Mgmt
Finance Finance
Sales Supplier 2
Order Mgmt
Finance
Supplier 3
Sales
Order Mgmt
Finance
15 © 2011 Ariba, Inc. All rights reserved.

16. The problem becomes unworkable once the challenge is
expanded to reflect the volume of transactions and
interactions that occur across an industry’s ecosystem….
Buyer 1 Supplier 1
Sourcing Sales
Procurement Order Mgmt
Finance Finance
Buyer 2
Sourcing Sales Supplier 2
Procurement Order Mgmt
Finance Finance
Buyer 3
Supplier 3
Sourcing Sales
Procurement Order Mgmt
Finance Finance
16 © 2011 Ariba, Inc. All rights reserved.

17. The rationale for pursuing Collaborative Commerce…
With your ERP in place and a Supplier Portal enabled, your company has successfully
automated key internal processes and some supplier elements …
Where you’d like to be
100%
-- Complex Collaboration Challenge --
!
% of Total Spend
Where you
probably
are today
with an ERP
& Supplier
Portal
approach
% of Total B2B Trading Partners 100%
…but if your business is anything like the situations Ariba witnessed with our other customers,
you still have a significant opportunity to capture additional efficiencies and savings by
automating all of your spend types and supplier relationships.
17 © 2011 Ariba, Inc. All rights reserved.

18. The central issue has been that the economics of
establishing 100% digital collaborative connections
to all your trading partners has not scaled…
Level of Trading
Categories of Corporate Spend Partner Connectivity1
Direct
General Indirect
Maintenance, Repair & Operations
Strategic Goods & Services
Simple Services
Complex Services
Infrequent Goods & Services
Scale 1As a percentage of the total number of business-to-
business relationships that your business has in place
low high
18 © 2011 Ariba, Inc. All rights reserved.

19. Benefits of 2-Sided Business Network
Collaborative Business Commerce Added Value for Buyers and Sellers
Buyer Benefits Supplier Benefits
• 70% process cost savings • Improved visibility and control from self-service
• $2M discount savings on every Billion in spend supplier portal
• $9M in contract leakage savings per Billion in • Reduced order-to-cash cycle
spend • Eliminate exception with smart invoicing
• $3M in working capital impact per Billion in spend • Increased revenue from new customer discovery
• Rapid success from buyer/supplier matching • Broad value proposition drives 90%+ renewal rate
• Single connection to existing back office systems
19 © 2011 Ariba, Inc. All rights reserved.

20. Ariba Collaborative Commerce for use with ERP
addresses 100% of your corporate spend, and 100% of
your supplier relationships
No Supplier Left Behind:
• Single point of collaboration for ALL
your suppliers
• Collaborative capabilities for ALL spend
Collaborative Commerce
for use with ERP
types
• Simplified Buying
• Buying Collaboration
• Catalog Management
• Known cost up front
• Deployment in as little as 14 weeks
• Cash-positive impact in first 12 months
…with the Ariba Collaborative Commerce™ for use with ERP solution, you can deploy a
collaboration solution that enables complete collaboration with 100% of your suppliers and
partners, with a solution design that creates value for both you and your suppliers.
20 © 2011 Ariba, Inc. All rights reserved.

21. Gauging your Chance for Success
VISION Leading Laggard
Clarity Deliver $50M in Source to Make processes more efficient
Settle savings within 52
weeks.
Coverage 85% of all orders are Provide more catalogs
electronic and 99% of these
are accurate upon invoice
receipt.
Commitment The CFO will report monthly to The project is funded
(Compliance) the CEO the progress against
metrics. Penalties are
identified for non-compliance.
Collaboration 80% of trading partners are Procurement, IT and AP are
enabled and 100% source-to- on the selection team
settle eTransacting.
21 Ariba, Inc. 2011 All rights reserved.

22. Q&A
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23. Managing your Challenges in 2020
• “Suppliers in the coming decade will continue to take on bigger
pieces of things they already do for customers.”
• “Market pricing for goods and services will become so
transparent … that negotiation will be a lost art.”
• “Procurement will become more strongly linked to financial
supply chains, optimizing cash flow and working capital,
implementing dynamic discounting, supply chain financing, and
so forth.”
• “Timing of customer-supplier collaboration will shift” earlier
23 Ariba, Inc. 2011 All rights reserved.

24. Next Steps CIO Magazine Webinar recording:
How the Cloud can benefit ERP
http://exchange.ariba.com/community/solutions/collabo
• Free Business Case Assessment rative_commerce/blog/2011/08/29/cio-magazine-
webinar-recording-how-the-cloud-can-benefit-erp
• Transaction and ramp
assessment
• Savings estimate
• Business case and ROI
John Lark
Director of Marketing
(650) 390-1903
jlark@ariba.com
Ariba Collaborative Commerce for
Dummies Whitepaper
http://www.ariba.com/resourcelibrary/views/re
source_library_asset_brief.cfm?asset_id=772
Vision 2020
Welcome to the Future of Procurement Ariba Collaborative Commerce
Research Whitepaper
http://www.ariba.com/resourcelibrary/views/mi http://www.ariba.com/resourcelibrary/views/re
crosites.cfm? source_library_asset_brief.cfm?asset_id=829
© 2011 Ariba, Inc. All rights reserved.