1. B Smarter Supplier Management
– Improving Supplier Performance Through Better
Collaboration and Monitoring
Sundar Kamakshisundaram – Ariba
Olivier Veilhan – Bouygues Telecom
Heiko Spanuth – KONE
Rachel Lee – Norland Managed Services
© 2012 Ariba, Inc. All rights reserved.

2. Agenda
Introduction
Panel Discussion
Olivier Veilhan – Bouygues Telecom
Heiko Spanuth – KONE
Rachel Lee – Norland Managed Services
Q&A
2 © 2012 Ariba, Inc. All rights reserved.

3. Strategic Sourcing Is Foundational, but Supplier
Management (SRM) Is Transformational...
Source: Procurement Key Issues Study, The Hackett Group, 2011
3 © 2012 Ariba, Inc. All rights reserved.

4. Defining Supplier Management or
Alternately Called “SRM”…
“Supplier Management” is multi- faceted and
touches many aspects of Business Commerce
Registration &
On-boarding Supplier
Process Portals • Supplier Information Management that unifies
platform, process and supplier profiles across the
Supplier company and keeps it current, complete and correct.
Discovery • Highly usable web-based portal for suppliers to register
Supplier Performance
and manage information collaboratively with customers
Management Management
• Supplier Performance Management capabilities
or SRM
including Process Workflow and approvals, Surveys
Vendor Master
and scorecards, flexible role based dashboards and
Management Diversity/Green/
Corporate customizable reports
Risk Responsibility • A Robust technology platform that seamlessly
Management
integrates in-context Supplier info such as
Parentage, Financials, Diversity and Sustainability to
manage and mitigate Supply Risk
• A unified Supplier Record merging data and process
flows to third party systems and data sources
4 © 2012 Ariba, Inc. All rights reserved.

5. What is Supplier Relationship
Management (SRM)*?
“Key processes, definitions, tools, and roles to drive
coordinated proactive management of suppliers across the business”
Supplier Performance Supplier Development
Supplier Stratification SRM Governance
Management and Collaboration
How should supplier How should supplier-facing How should supplier How should capabilities of
relationships be stratified staff be organized and performance be managed existing suppliers be
based on strategic internal collaboration and across different supplier developed to deliver
importance to prioritize supplier interactions be types and strata to continuous improvement
resources and tailor conducted? maximize performance? and ongoing cost
management processes? reduction?
• Supplier Stratification • Team Structure and • Function KPI • Supplier Development
Definition Roles Development Needs Definition
• Supplier Stratification • Ongoing Governance • Supplier Performance • Supplier Development
Criteria • SRM Competency Target, KPI and Program Definition
• Supplier Stratification Management Scorecard Definition • Ongoing Supplier
Process • Ongoing Supplier Development
Measurement. Includes
Cost, Quality, Risk, etc.
Executive Supplier Scorecard Supplier Name
Executive
Strategic
Company-
Management
Executive
Management
Team Roles
Executive
Sponsor
Executive
Sponsor
Executive
Executive
Sponsor
Executive
Sponsor
Executive
SRM Lead:
Account Manager:
Functional Area / Category:
Site:
Intellectual
capital
Company Supplier Supplier Contact: Scorecard Date:
Wide Partners Management
Team Roles Sponsor Sponsor
Status Definition Supplier Representatives:
Strategic Team Roles Good Meets or exceeds performance target
Enterprise
Partners
Relationship
Relationship
Relationship
Management Lead
Relationship
Relationship
Management Lead
Relationship
Fair
Poor
Does not meet performance target; acceptable variance; improvement needed
Unacceptable variance from performance targets; action required
Company Representatives:
Joint sharing Joint
80% Leads Roles Management Lead
Relationship Management Lead
Relationship
Invalid Invalid percentage data has been entered into the cell
Relationship
Financial
Value Strategic
Leads Roles
Leads Roles
Company
Management Lead Supplier
Management Lead KPIs Metrics Performance Targets Performance Trend
Supplier Score
(Scale of 1-10)
Comments
capability process
Business Office Roles Operations Management Team Roles Metric Metric Data Score Unaccept- Last Last Last One Qtr Metric KPI
investment improvement
Accept-
KPI
Target
Multi-
Multi-
KPI Wt. Metric Today
Strategic Suppliers Wt. Total Source Range able Range able Range Yr Qtr Mo Trend Score Score
Suppliers Business Office Roles Operations Management Team Roles
of Supply -
Assurance
≤ ≥ h
Business Office Roles Operations Management Team Roles
Delivery
On time delivery percentage 50% tbd 0 - 100 80 81 - 89 90 90 80 85 90 9.0
Contract Communications Operations Initiative Risk 15%
Management
Contract
Management
Management
Communications
Management
Management
Operations
Management
Management
Initiative
Management
Management
Risk
Management
Delivery conformance
Additional available capacity
50%
56%
100% tbd
tbd
0 - 100
0 - 100
≤
≤
80
80
81 - 89
80 - 89
≥
≥
90
90
80
50
78
75
85
80
95
90
h
h
9.5
9.0
9.3
supplier
Environment /
Assurance of
Communications
Contract Operations Initiative Risk
Capability Systems &
Business
collaboration
Supply -
Company Company
Management Company
Management Company
Management Company
Management Management 15% ≤ ≥ i
Core
Core Suppliers Supplier Supplier Supplier Supplier Supplier
Financial stress
Credit score
33%
11% 100%
tbd
tbd
0 - 60
0 - 20 ≤
48
16
49 - 53
17 ≥
54
18
40
15
54
16
58
17
50
18 h
8.3
9.0 8.8
Suppliers
Financial Legal & Audit Customer
Rejection rate
Weighted non-comformance rate
26% tbd 0 - 100 ≤
≤
80 81 - 89 ≥
≥
90 70 75 80 90 h
h
9.0 acquisition process
Escalation Performance 26% tbd 0 - 100 80 81 - 89 90 80 83 85 91 9.1
Performance
Financial Satisfaction
Customer Management Management
/ CAR
by supplier Value integration
Quality
Management Support Audit
Legal & Management Escalation Performance 25% Process chage 16% tbd 0 - 60 ≤ 48 49 - 53 ≥ 54 40 45 50 60 h 10.0
Performance
Financial Support Satisfaction
Customer Management Management
20% Management
Company Company & Audit
Legal Management
Company
Satisfaction Escalation
Company Performance
Company Audit rating 16% tbd 0 - 60 ≤ 48 49 - 53 ≥ 54 30 35 40 42 h 7.0
Basic Performance Support Management Management
Financial
Value
Basic Suppliers
Transactional Suppliers
Suppliers
Management
Supplier Supplier Management
Supplier Supplier Supplier
Supplier 1
Auidt response time
Response to standard request
16%
9%
100% tbd
tbd
0 - 60
0 - 100
≤
≤
48
80
49 - 53
81 - 89
≥
≥
54
90
40
60
43
70
45
80
56
91
h
h
9.3
9.1
8.9
creation
Supplier 2
Supplier 3
Response to emergency request
Communication about potential
problems
9%
9%
tbd
tbd
0 - 100
0 - 100
≤
≤
80
80
81 - 89
81 - 89
≥
≥
90
90
90
70
80
75
70
76
60
78
i
h
6.0
7.8
opportunity
Flexibility to change 9% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 80 85 85 91 h 9.1
Roles Company Team Member Supplier Team Member
≤ ≥ h
Non-Preferred Customer services 9% tbd 0 - 100 80 81 - 89 90 70 75 80 85 8.5
Services
15% Efficiency in providing information 9% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 90 80 70 60 i 6.0
Local support efficiency 9% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 75 80 85 91 h 9.1
Production lead-times 9% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 90 80 70 60 i 6.0
Competitiveness of Production
9% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 75 80 85 90 h 9.0
lead-times
Stability of lead-times 9% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 75 80 80 80 g 8.0
Compliance with quoted lead-
9% 100% tbd 0 - 100 ≤ 80 81 - 89 ≥ 90 75 80 85 90 h 9.0 8.0
* Hackett Group Study on SRM
times

6. Value of SRM?
• Value beyond Sourcing Savings
World-Class procurement groups create:
TCO reduction and „disciplined growth‟
– 3.6x greater savings from SRM than peers in
Non-cost performance improvement direct spend
• The Growth Agenda – 13.1x greater savings from SRM than peers
in indirect!
More innovation
Source: 2011 Hackett Procurement Benchmark
Emerging markets
Incremental revenue from
“Agility” (variabilization, flexibility) supplier innovation efforts
• Supply Risk
facilitated by Procurement
8.3%
Viability/capacity
Compliance (quality, regulatory, etc.) 3.5%
• Third-party governance
• Supply Chain vs. Supply Chain
Multi-tier management
•
Peer Group Top Quartile
Efficiency/automation of SRM Source: 2011 Hackett Procurement Benchmark
6 © 2012 Ariba, Inc. All rights reserved.

7. B
Bouygues Telecom
Olivier Veilhan, Head of Purchasing and IT
Processes
© 2012 Ariba, Inc. All rights reserved.

8. Agenda
• Ariba Solution within Bouygues Telecom
• Supplier Relationship Management
• 360° View
• Current situation
• Next Steps
8 © 2012 Ariba, Inc. All rights reserved.

9. Bouygues Telecom : 3rd operator in
France
• Key dates
 Creation of company: October 1994
 Commercial launch: 29 May 1996
 Acquisition of fixed network: 1 July 2008
• Key figures
 11,304,000 mobile customers (end December 2011)
 1,241,000 fixed broadband customers (end December 2011)
 9,800 employees (end 2011)
 5.741 B€ sales in 2011
• Ownership structure
89.5% 10.5%
9 © 2012 Ariba, Inc. All rights reserved.

10. Purchasing Organisation
Over 2.4 B€ ordered in 2011
80 people in purchasing organisation
Center of Service, IT, Process
Performance and Sustainable
development
Network
Handsets
Marketing, adv. com, General
supplies
IT
Fixed services
10 © 2012 Ariba, Inc. All rights reserved.

11. Ariba On-demand Solution within
Bouygues Telecom
• Ariba upstream solution since end 2010 :
Sourcing, Supplier Information and Performance
Management
All commodities are sourced in Sourcing
200 sourcing events done today
300 internal users (buyers and team members)
900 suppliers contacts
• Contract module to be deployed in june 2012
11 © 2012 Ariba, Inc. All rights reserved.

12. Our Goal : 360°-view of Supplier
Sourcing
events
• Sustainable
• Financial External
Contracts
(ratings…) informations
• … Supplier
Profile
Supplier
• Surveys
Spend • Scorecards
Performance
© 2012 Ariba, Inc. All rights reserved.
12

13. Our Goal : 360°-view of Supplier
Supplier Profile
Spend
Contracts
Surveys
Sourcing
events
Scorecards
© 2012 Ariba, Inc. All rights reserved.

14. Supplier Profile
• Supplier creation initiated by each buyer
• Supplier profile to be fulfilled by each supplier at
first event
All questions are not mandatory at first
• Standard Non Disclosure Agreement (NDA) included in
the profile, dematerialized. On-line agreement is
mandatory to access the event (RFx)
14 © 2012 Ariba, Inc. All rights reserved.

15. Subscriber Profile : 60 Questions
15 © 2012 Ariba, Inc. All rights reserved.

16. Subscriber Profile : Generic NDA
16 © 2012 Ariba, Inc. All rights reserved.

17. Today : Sustainable Infos
• Interface with Ecovadis sustainable informations
• Ecovadis main scores of suppliers‟ evaluations uploaded
in Ariba suppliers profiles, including a link to the
Ecovadis supplier profile
• Ecovadis provides a file with all the informations
• Bouygues Telecom uploads those informations in Ariba
suppliers profile every month
17 © 2012 Ariba, Inc. All rights reserved.

18. Today : Sustainable Infos
18 © 2012 Ariba, Inc. All rights reserved.

19. Today : Sustainable Infos
19 © 2012 Ariba, Inc. All rights reserved.

20. Today : Suppliers Surveys
• 190 {supplier-contract} surveys done based on an
analysis process to identify business critical
suppliers/contracts
• Evaluations every 6 months
• Scoring done in Excel
• Evolution to be studied with Ariba
Simplify the process of collecting the surveys
Implement scoring cards inside the platform
20 © 2012 Ariba, Inc. All rights reserved.

21. Today : Supplier Surveys
Note des couples Fournisseur – prestation Note des couples Fournisseur – prestation
VAGUE 2 VAGUE 1
Zone de risque
LIVRAISONS
4 Nb de frns ds la zone
PDT - SERVICES
DEPENDANCE
ECONOMIQUE
MAITRISE DE LA Évaluation
évaluation PRESTATION
Opérationnelle
Financière
MAINTENANCE /
RATING FINANCIER SAV
DEVISE DE TRANSPARENCE
REFERENCE = EURO
Évaluation
Économique
SUBSTITUABILITE RSE / ENVIRONNEMENT
RSE / FOURNISSEURS RSE / LAB-SOCIAL
rating RSE
RSE / ETHIQUE DES écovadis
21 © 2012 Ariba, Inc. All rights reserved. AFFAIRES

22. Tomorrow : Enrich the Supplier
Vision
• Spend informations : extracted from our BW/ERP SAP
• Financial informations :
Eg : Dun & Bradstreet ratings and informations
• Possibly, legal suppliers documentation
• To be studied, self registration of new suppliers directly
through Ariba
22 © 2012 Ariba, Inc. All rights reserved.

23. One-stop Supplier Shopping !
23 © 2012 Ariba, Inc. All rights reserved.

24. Thank you for your attention
24 © 2012 Ariba, Inc. All rights reserved.

25. B
Norland’s Approach
to Supplier
Management
Rachel Lee, Procurement Director
© 2012 Ariba, Inc. All rights reserved.

26. Norland at a Glance
 Private Limited Company – profits invested in future growth
 27 years – Hard Services led FM
 Turnover for 2010/11 - £252m - 96% Customer retention
 D&B Rating: 2A1
 2,452 members of staff - 93% Staff retention
 Customer focused Business Units
300
250
200
150
252
100 191.2 211
150.8
50 122.9
0
FY07 FY08 FY09 FY10 FY11
26 © 2012 Ariba, Inc. All rights reserved.

27. Our Aim for SRM
Gain competitive advantage by
truly being a
„customer of choice‟
27 © 2012 Ariba, Inc. All rights reserved.

28. Our Market
• Highly competitive market
• Common set of suppliers as our competitors
• Suppliers much larger than us
• Highly diverse supply chain
• Our customers often have greater brand recognition
than us
28 © 2012 Ariba, Inc. All rights reserved.

29. Key Challenges
• Vast number of suppliers
• Volume of information needed
Including statutory requirement
• Downstreamed procurement model
• Many touch points with suppliers
• Varying service level requirements from our customers
29 © 2012 Ariba, Inc. All rights reserved.

30. SRM Objectives
• Fast, efficient on-boarding
• Statutory compliance
• Consistent pricing across our many sites
• Common view of supplier performance
• In summary
Manage our risks
Become „customer of choice‟
30 © 2012 Ariba, Inc. All rights reserved.

31. Our Market
• Highly competitive market
• Common set of suppliers as our competitors
• Suppliers much larger than us
• Highly diverse supply chain
• Our customers often have greater brand recognition
than us
31 © 2012 Ariba, Inc. All rights reserved.

32. Operating Model
Supplier
Supplier Contract Sourcing
Management Performance
Self registration (tenders/auctions)
(SRM)
Supplier selection
Supplier data Repository (category/region) Automated
(scored) (controlled access) scorecards
Drive compliance
Credential Search utility Selection decision Performance
management (pricing & terms) (negotiation) dashboard
32 © 2012 Ariba, Inc. All rights reserved.

33. What We Did
• Developed Full and Lite SRM programme
• Kept it simple
• Extensive stakeholder engagement
• Training programme for business managers
• Soft skill development for Procurement team
• Clarified everyone‟s role in procurement
• Continual communication with suppliers
33 © 2012 Ariba, Inc. All rights reserved.

34. Barriers to Success
• Suppliers don‟t always „get it‟
• Procurement team need ability to „sell‟
• Time and resource available
• Trying to get to end game too quickly
34 © 2012 Ariba, Inc. All rights reserved.

35. B
Ariba and Supplier
Performance
Management at KONE
How ARIBA supports KONE in Supplier
Performance Management
Heiko Spanuth, Manager, Sourcing Processes
© 2012 Ariba, Inc. All rights reserved.

36. KONE – In Brief
• KONE provides
industry-leading elevators, escalators and automatic
building doors
innovative solutions for maintenance and
modernization
• KONE is one of the leading companies in its
industry
• KONE was founded in Finland in 1910
• KONE operates worldwide
• KONE has approx. 35,000 employees
• Net sales EUR 5.2 billion (2011)
• KONE is listed on the NASDAQ OMX Helsinki
since 1967
36 © 2012 Ariba, Inc. All rights reserved.

37. KONE Sourcing Organization
MISSION
• Continuously improve customer value and profit
contribution by proactively engaging best-in-
class suppliers as well as our organization in
collaborative teamwork.
• Relentlessly provide innovative solutions and
reduce total cost of ownership so that KONE is
competitively positioned in every market.
VISION
• To be recognized as a world-class sourcing
organization
37 © 2012 Ariba, Inc. All rights reserved.

38. KONE Sourcing Organization
• Team of approx. 140 central and local dedicated
sourcing resources
• Category management concept (10 DM categories,
6 NPR categories)
• Spend of approx. 2,5 billion EUR (approx. 60% direct
materials)
• Dedicated supplier quality management team of
approx. 35 people
38 © 2012 Ariba, Inc. All rights reserved.

39. How KONE Works with ARIBA
Stage 1 Stage 2 Stage 3 Stage 4 Stage 5
Baseline Evaluate Negotiate Implement Manage
ARIBA (=KONE SRM)
supports all key
phases of KONE‟s
strategic sourcing
process
39 © 2012 Ariba, Inc. All rights reserved.

40. KONE SRM - Objectives
• SPEND MANAGEMENT
Fast and reliable analyses
and savings opportunity identification
Automated quarterly Sourcing KPI reporting
• SOURCING MANAGEMENT
Professional tendering through eRFXs and eNegotiations
Sourcing cycle time reduction and increased transparency
• CONTRACTS MANAGEMENT
Central repository for local and global sourcing agreements
Creation of new agreements utilizing up-to-date templates
Company wide system based contract approval flow
• SUPPLIER PERFORMANCE MANAGEMENT
Standardized measurement of supplier performance for direct material suppliers
and subcontracting suppliers based on objective criteria for all key suppliers
Assessment of supplier risk
40 © 2012 Ariba, Inc. All rights reserved.

41. KONE SRM – In Numbers (2011)
• Users trained: 230
• Contracts published: 3200
• eSourcing events executed: 300
• Supplier Scorecards run: 666
41 © 2012 Ariba, Inc. All rights reserved.

42. Supplier Performance and Risk
Management Challenges
• Production, employees and customers in all continents
• Low volume, high diversity operations, especially in
maintenance business
• People Flow  Excellence in safety, quality and
innovations
• Economic uncertainty and increased risk of supplier
financial distress
• Increased need to manage sub-tier suppliers
42 © 2012 Ariba, Inc. All rights reserved.

43. Supplier Classification and Impact
on Performance Measurement
• Common Long Term plans (3-5 years)
• Dedicated Team + Key Account
• Supplier scorecard & Risk assessment
• Supplier excellent certification
Strategic • ...
• Common Mid Term plans (1-3 years)
• Establishes Dedicated Key Account
Preferred • Supplier Scorecard & Risk assessment in place
• ...
• Common short Term plans (1 year)
• Existing Purchasing contract/term and conditions
Approved
• KPI measurement
• ...
43 © 2012 Ariba, Inc. All rights reserved.

44. Supplier Scorecards Used in KONE
DM Supplier Scorecard Risk Scorecard
Quality KPIs Criticality to KONE
Logistics and Responsiveness Financial Viability
Cost Competitiveness Supplier Dependency
Technical Capability Dependency on tier-2 suppliers
Service level and Proactivity Supplier Operations
Reaction Time Non-stock Criticality to KONE
Installation Scorecard
Safety KPIs
Quality KPIs
Cost Competitiveness
Service Level
Site Management
Technical Competence
44 © 2012 Ariba, Inc. All rights reserved.

45. Supplier Performance Scorecard
Facts & Principles
Scorecard
Suppliers
Frequency
• Supplier scorecards are generated and
in Scope shared with suppliers based on the
Direct Material questionaire results
Supplier 150 4 x per year
Scorecard • Scores are given by selected individuals
from selected functions within KONE
Risk Scorecard 120 2 x per year
• Scorecards are managed by a
central team
Installation
Subcontracting 200 2 x per year • Suppliers provide initial input for Risk
Scorecard Scorecards
Other scorecards -
on needed • Scorecard outcome is 1 input for KONE‟s
basis supplier certification program
45 © 2012 Ariba, Inc. All rights reserved.

46. Thank you
Any questions?
46 © 2012 Ariba, Inc. All rights reserved.

47. Q&A
Contact info:
Sundar Kamakshisundaram: sundar@ariba.com
47 © 2012 Ariba, Inc. All rights reserved.

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