As part of the workshop, Ariba will highlight and demonstrate the eAuction functionality within the Sourcing Professional module. The session aims to de-bunk many of the myths surrounding eAuctions whilst demonstrating the functionality; examining how they can be utilised as part of a sourcing strategy and discussing the best practice processes for execution.

1. APJ Customer User Conference
Bohdan Gorman
October 21-22, 2015 Public

2. © 2015 Ariba – an SAP company. All rights reserved. 2Public
Agenda
Power of e-Auctions
 Why Do Auctions Work
 Ease of Setting Up
Opportunity Identification
 The C’s of e-Auctions
Mythbusting Auctions
 You can only Auction Simple Commodities
 E-Auctions are only about Price
 Negative Impact on Supplier Relationship

3. © 2015 Ariba – an SAP company. All rights reserved. 3Public
Why Do Auctions Work
All suppliers in the “room” at one time
• Minimise negotiation time
• Always guaranteed best market pricing
• Qualified suppliers understand this is the final price component
Easy to Setup
• Simple clicks to set up an event
• Easy to cycle past events

4. © 2015 Ariba – an SAP company. All rights reserved. 4Public
Opportunity Identification – The Auction C’s
Clearly Defined Requirements
 Scope of work must be tight.
 No assumptions
Compressible Pricing
 Must be a perceived savings opportunity, otherwise tender
should be used
Commercially Attractive
 Significant enough spend, both internally and externally
Changing Suppliers
 Must be willing to change suppliers
Competitive Supply Base
 Competition relative to the category and auction strategy

5. © 2015 Ariba – an SAP company. All rights reserved. 5Public
Auction Mythbusting
You can only auction simple
commodities
 True, simple commodities are easier
 The golden C, “Clearly Defined
Requirement”
– Once a scope is clearly defined, and
suppliers are bidding apples to
apples, suppliers can bid without
ambiguity

6. © 2015 Ariba – an SAP company. All rights reserved. 6Public
Auction Mythbusting
Auctions are only about price
 Price is one component of a wider
strategy
 Evaluation methodology is used, just
like a tender
 Only qualified/shortlisted suppliers are
invited to the auction
 Transformation factors should be
applied to account for weightings

7. © 2015 Ariba – an SAP company. All rights reserved. 7Public
Auction Mythbusting
Negative impact on supplier
relationship
 Auctions show full transparency in the
price negotiation
 Only qualified suppliers are invited, this
is not about driving the incumbent price
down
 Removes pricing doubt from both sides
 Does not waste the time of either the
buyer or supplier

8. © 2015 Ariba – an SAP company. All rights reserved. 8Public
Example Screenshots - Supplier
 Suppliers are taken through a
registration process (if they have not
used Ariba previously.
 Depending on the “market feedback”
chosen by the Buyer, the suppliers
screen will look similar to the one
pictured
 Most common types of feedback are:
– Rank Only
– Generic Alias
– Unique Alias
– Rank with Low Price

9. © 2015 Ariba – an SAP company. All rights reserved. 9Public
Example Screenshots – Buyer Screen
 Real time reporting:
– Suppliers invited/participated
– Number of bids
– Potential savings from benchmark/historic
– Potential savings from incumbent
– Bid Graphs provide visual representation of
auction results real time

10. Thank you