1. MC How Smart
Invoicing Enables
Straight-Through
Processing for All
of Your Suppliers
Chris Rauen, Ariba
Geoff Brown, Liberty Mutual
Jeff Phillips, UPS
© 2012 Ariba, Inc. All rights reserved.

2. Confusing E-Invoicing Options
E-Invoicing Networks
Collection Services
Invoice Printing
Consultants
Post Audit Recovery Supplier Portals
F&A BPO EDI/VANs
Archiving Services Software Houses
Scanning Services Banks
Digital Signature Providers
Workflow Services ERP Integration
Evaluated Receipt Settlement
2 © 2012 Ariba, Inc. All rights reserved.

3. Where Do You Stand?
Best-in-Class (Top 20%) 5.3 days to process an invoice
60% of invoices paid early enough
to secure early payment discount
$7.78 average cost to process an invoice
Industry Average (Middle 50%) 10.2 days to process an invoice
9% of invoices paid early enough
to secure early payment discount
$12.05 average cost to process
an invoice
Laggard (Bottom 30%) 24.5 days to process an invoice
2% of invoices paid early enough
to secure early payment discount
$37.45 average cost to process
an invoice
Source: Aberdeen Group, E-Payables 2011 Report
3 © 2012 Ariba, Inc. All rights reserved.

4. Best Practice: Ariba Smart Invoicing
 The best invoice solution is the one that is TOUCHLESS!  Lower AP Cost
 Ariba Smart Invoicing drives auto post rates of 98% compared to  Faster Cycles
less than 60% with other solutions  Lower Risk
1M+ TRADING PARTNERS
Invoice
Number
GST/VAT
Compliance
Customer Sub Total
Amount Bill To
Supplier
Business Address
PO Account rules
ERP Coding by country
Total
Ship to
Amount Supplier
Country- Address
98%... Contract
specific
Match Invoice
Network Touchless templates
Supplier
Adapter Shipping Requester
Thresholds
AP Price - Tax Supplier Supplier
Pay match
Compliance Tax
Invoice
Thresholds
Date Supplier
Withholding
tax support
VAT / GST
IDs Faster billing and
receivables
processing at
lower cost
4 © 2012 Ariba, Inc. All rights reserved

5. MC How Smart
Invoicing Enables
Straight-Through
Processing for All
of Your Suppliers
Geoff Brown
Manager of Procurement Operations
Liberty Mutual
© 2012 Ariba, Inc. All rights reserved.

6. About Liberty
• Fortune 100 company providing
competitively priced insurance products
• Founded in 1912 - we’re 100 years old!
• 2011 - $34.7B in revenue
• Third-largest property and casualty
insurer in the U.S. (based on 2010 net
written premium)
• 45,000+ employees across the globe
• 900+ offices
• 26 countries
• Mission: “Helping people live safer,
more secure lives.”
6 © 2012 Ariba, Inc. All rights reserved.

7. Our eCommerce Journey
Claims Spend
Database Supplier
Contract
Workbench Performance
High module Management
(repository) module
Analysis
reporting 9r1
module Procurement Upgrade
Policies
Contract
Engagement
Buyer and
Invoice Compliance
Med modules module
(eInvoicing)
Q4 Purchase
of Ariba Spend Sourcing
Mgmt. Suite module
Low
Change Management, Influence, Process Improvements
2004 2005 2006 2007 2008 2009 2010 2011
7 © 2012 Ariba, Inc. All rights reserved.

8. Business Challenges – Products
• Prior to our Smart Invoicing implementation
Some EDI-to-AP invoice passing for large relationships
(fleet, shipping, office supplies)
Very limited structure for manager approval of purchases
High degree of manual invoice processing in AP (80% paper)
Invoices were getting “lost”
Cumbersome, manual processes for approvals and payment
• Answer = Implementation of the Ariba Buyer and Ariba Invoice modules
Provided a consistent approach to purchasing frequently ordered products
(IT, office supplies, furniture, etc.)
Electronic requisitions with manager approval
Catalogs
Electronic invoicing
Commoditization of spend = enhanced reporting
8 © 2012 Ariba, Inc. All rights reserved.

9. Business Challenges – Services
• Needed a way to address spend that didn’t lend itself to the traditional
requisition/purchase order process
♦ Examples: security, building maintenance, cleaning, advertising
• Answer = Implementation of Ariba Contract Compliance (ACC) module
♦ Flexible solution for internal stakeholders
♦ No need for upfront approvals
♦ Invoice approval by manager with approval authority
♦ Supplier submits invoice electronically via the Ariba Network
♦ Users can override default cost centers
♦ Rates can be validated
• To date, we’ve enabled 354 suppliers via this model (on 529 ACC contracts)
9 © 2012 Ariba, Inc. All rights reserved.

10. Approach to Automating Invoicing
Identification Enablement
• “Anything paper is game”… sort of • Obtain internal default GL and CC, and
• How it starts: list of approvers
♦ Analysis reporting based on • Creation of commodity codes
annual targets • Jointly reach out to supplier
♦ Contractually obligated • System demo
♦ User -generated interest • Provide materials (QRCs, IDs, etc.)
• Identify/approach spend owner • Create test ACC contract and perform
• Learn more about product service, how
obtained, etc.
Identification test with supplier
• Create live ACC contract
• Demo system capabilities to • Go Live
internal stakeholder
• Determine appropriate module
(Ariba Buyer or ACC)
Reporting Enablement
Reporting Invoicing Invoicing
• Look for “leakage” • Monitor invoice activity for the first
• ID new areas of spend with few invoices
enabled suppliers • Follow up with stakeholders on how
processing is going, ask for feedback
10 © 2012 Ariba, Inc. All rights reserved.

11. Results Over Time
2008 - $1,509M 2009 - $1,867M
Paper
$809M
54% Paper
$772M
42%
Admin Proc
BuySMART
Admin Proc $224M
BuySMART 12%
$46M
3%
IT Proc
IT Proc BuySMART
Non- BuySMART $304M
$288M Non- 16%
BuySMART BuySMART
Electronic 19%
Electronic
$367M $566M
24% 30%
2011 - $2,151M
Paper Not 2010 - $1,978M Admin Proc
Being Admin Proc Paper BuySMART
Pursued For BuySMART $568M $399M
BuySMART $542M 29% 20%
$252M 25%
12%
Admin Proc
BuySMART
Non- Potential / In-
BuySMART process
Electronic $166M IT Proc
$639M 8% BuySMART
Paper IT $414M
30% $43M IT Proc
Non- 21%
2% BuySMART
$509M BuySMART
23% Electronic
$597M
30%
11 © 2012 Ariba, Inc. All rights reserved.

12. Benefits
• No paper!
• Vastly improved payment to supplier
♦ Discount opportunities
• Enhanced process for stakeholders
• Superior reporting available
• Commoditization of more spend
• Accounts Payables likes us - sometimes? 
12 © 2012 Ariba, Inc. All rights reserved.

13. Next Steps
• Address infrequent suppliers with few invoices
Future initiative to implement systematic way to process in Ariba
• Running reports on a regular basis
Identifying new suppliers for electronic processing via Ariba
Identify leakage and change behaviors
• Enhance the supplier experience to help drive more
suppliers to move off paper
Example: Suppliers will be able to see payment status via the
Ariba Network starting in April
13 © 2012 Ariba, Inc. All rights reserved.

14. Lessons Learned
• Test, test, test!
• Sell processes with no mandate: promoting value
• Find advocates in lines of business
• Track successes (via reporting) and market
• Report/follow up to prevent leakage
• Utilize invoice tolerances
• Question the value of 3-way matching
• Seek continuous process improvement
14 © 2012 Ariba, Inc. All rights reserved.

15. MC How Smart
Invoicing Enables
Straight-Through
Processing for All
of Your Suppliers
Jeff Phillips, Procure-to-Pay
Project Manager
UPS
© 2012 Ariba, Inc. All rights reserved.

16. About UPS
• Founded in Seattle, WA in 1907
• Corporate Headquarters: Atlanta, GA
• Primary Business Units:
Small Package
Supply Chain Solutions (Logistics/Warehouse/Forwarding)
UPS Freight
• 2011 Delivery Volume: 4 billion packages/documents
• 2011 Total Revenue: $53.1 billion ($44 billion small
package)
16 © 2012 Ariba, Inc. All rights reserved.

17. Invoicing Challenges
• Too much paper, manual matching of invoices for contract
suppliers (services spend) and catalog suppliers
• No validation checks with Oracle workflow
• Processing of PO invoices took up to 26 days
• Forced to contact suppliers to resolve invoice exceptions
• Inefficient process: meant many suppliers on immediate
payment terms
• Unable to capture many early payment discounts
• Difficult time managing multiple transaction types, including
EDI invoices
17 © 2012 Ariba, Inc. All rights reserved.

18. Smart Invoicing: Process Efficiency
• Ariba InvoicePro: Automating 57k invoices/month, with total
of 500k in scope
Supports e-invoicing in multiple file formats
Automates invoice validation (date, rates, etc.)
Rejects invalid invoices back to suppliers
Reduces supplier and user inquiries
Establishes accurate payment term date
Delivers supplier performance reporting
Take advantage of discounting, including dynamic discounts
• Improved Metrics
Reduces processing costs for services spend by about 40%
Reduces cycle time from an average of ~26 days to ~7 days
Fewer exceptions/calls about invoice status
224 corporate catalog vendors enabled on Ariba - $450M in spend going
to 271 vendors representing about $700 million in spend
18 © 2012 Ariba, Inc. All rights reserved.

19. Smart Invoicing: Improved Controls
and Compliance
• Catalog suppliers required to submit PO Confirmations and ASNs
prior to invoice submission for effective services procurement
♦ PO created from contractual rates
♦ Invoices not matched to a PO are validated against the contract
♦ Prohibits non-compliant invoicing
♦ Reduces supplier inquiries and AP transaction cost
• Zero tolerance on price discrepancies, invoice systemically
rejected back to supplier
Forces catalog suppliers to get all unit price changes, substitutions, packaging
quantity changes, etc. pre-approved by procurement
Forces non-catalog suppliers to invoice per contracted rates
Reduces UPS invoice exception processing
• Supplier “group” controls to reject invoices
Currently using 11 groups for different invoicing controls
19 © 2012 Ariba, Inc. All rights reserved.

20. Smart Invoicing: Manage Cash Better
• Majority of Ariba Network spend with catalog suppliers
UPS has negotiated contractual discount terms
4% of catalog suppliers accept standing offer (2% 15 net 45)
Catalog suppliers occasionally accept buyer-initiated discounts on an
invoice-by-invoice basis
– We monitor for consistent offer acceptance and contact the supplier for possible
standing offer acceptance.
• Contract invoicing for services spend
Majority of contracts do not have negotiated rate or payment terms
8% of transacting suppliers have accepted standing discount offers
An additional 9% of suppliers have participated in one-time, sliding scale
discounting on an invoice-by-invoice basis
20 © 2012 Ariba, Inc. All rights reserved.

21. Lessons Learned
• Ramp all catalog suppliers at once
• EDI is still complex
• Cannot over-communicate with stakeholders
• Compliance and Reporting: Transaction follow-up is critical
• Once trading relationship accepted, “push” them off the cliff
21 © 2012 Ariba, Inc. All rights reserved.

22. Next Steps
• Expand catalog suppliers
• Expand local service contract invoicing
• Early payment discount strategy
• Reduce maverick spend to drive user compliance
22 © 2012 Ariba, Inc. All rights reserved.

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23 © 2012 Ariba, Inc. All rights reserved.