Keynote Presentation by Thierry Loir of the Procurement & Finance on the SAP Innovate or Die Event. Leuven, 18 June 2014

1. The Ariba Network
A two-sided business model
Thierry Loir, Solution Executive, Procurement, SAP BeLux

2. © 2014 SAP AG or an SAP affiliate company. All rights reserved. 2Public
Source: McKinsey & Company, “The rise of the networked enterprise, Web 2.0
finds it’s payday.” Survey of 4,394 executives. December 2010
“ Networked enterprises are 50% more likely to have
increased sales, higher profit margins, gain market share,
and be a market leader. ”
41%
improved
collaboration
across
silos
55%
better
information
sharing
24%
increased
revenue
77%
increased
access to
knowledge
63%
increased
marketing
effectiveness
43%
greater
market
share
8%
higher
margins
“Increasingly companies are
embracing collaboration as part of
their strategy to grow.”
The Rise of the Networked Economy

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So it all starts with the Network…
1.4+ million
Trading Partners
72+ million
Annual Invoices
$USD 170B
In Sourcing volume
190+
Countries
$USD 500B+
In Transaction Volume
15 million
Leads Sent to Sellers
Buyer Participants
Global
Enterprises
Mid-Market
Companies
Functional
Buyers
Seller Participants
Complex
(e.g. temp
labor, SOW,
T&E)
Simple
(e.g. catalog,
Pcard, etc.)
Automated
(Direct, MRO)
2x +

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Saphire Orlando, June 2014

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… on which apps operate…
Spend
Viz
Srcg
Contra
ct
Perf
Mgt
Proc
…
Profile
Leads
PO’s
IN’s
Score
Cards
Dyn.
Dsc’g
…
Network
Intelligence

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… integrated with backend systems
Any
eDoc
HTML
EDI
Email
Paper
FAX
CSV
cXML

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5 paraboles

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“What Hath God Wrought?”
Created by the Telegraph:
 Newspaper Wire Services
 Wire Transfers
 Futures Trading
 Greenwich Mean Time
 Sears Roebuck and the Catalogue
 Railways

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Reaching Critical Mass (= when the value of joining is higher than the cost)

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Reaching Critical Mass
Network Started Critical Mass Time Required Built by
Railways 1820’s 1890’s 70 years Tycoons, Barons
Electricity 1860’s 1930’s 70 years Local Govts, co-ops
Telephones 1870’s 1940’s 70 years GPO
Oil Pipelines 1880’s 1920’s 40 years Standard Oil
Credit cards 1950’s 1980’s 30 years Visa
UPC Barcode 1952 1975 23 years CPGs & Retailers
Internet 1982 2000 18 years US Government
Business Network 1999 2014 15 years Ariba
Source: Infrastructure History Series (Amy Friedlander) http://www.cnri.reston.va.us/series.html

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Guaranteed Delivery?

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Anti-Virus Software for Finance

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RESEARCH BUYING & SELLING COMMUNITY &
CONTENT
COMMUNICATION
& COLLABORATION
Personal Networks Make Our Lives Run Better…

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Procurement
without a
Network is
“Batteries not
included”

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VIDEO GAME
MANUFACTURERS
SPICE
MARKET
What are “Two-Sided Businesses?”
Customer Group 1 Customer Group 2
ReadersAdvertisers
Video Game
Developers
Video Game
Players
Spice
Growers
People Who
Cook
Group
1
Group
2
Attracts two parties who
need each other
Promotes ongoing
interactions between parties
Superior benefits are
realized by both parties
Marketplaces Platforms Exchanges Malls Clubs
NEWSPAPERS

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Fun Facts About Ariba Network
Ariba Network
Buyers includes all
types of companies
1 2 43Ariba Network
supports a broad
mix of spend
Ariba Network
is global
Ariba Network
supports a broad
range of commerce
11,200
1,270
750

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Ariba’s Two-Sided Model Has ACCELERATED Growth of the Network
2005 2008 20112006 2007 2009 2010 2012 201320041999 2001 2002 20032000
Registered
Members
$$$ Transaction
(USD in millions)
Supplier Membership
Program (SMP)
introduced
Seller fee: fixed fee
per chargeable
relationship
Buyer Membership
Program introduced
Transaction based-
subscription fees for
buyers
Introduced
seller SMP
package
subscriptions
Spend-based
model for
SMP sellers
introduced Ariba Discovery
Pricing
introduced for
lead responses
One-Sided Model
$0.02B
$43B
$21B
$2B
$0.6B
177
77,246
15,918 44,0812,665
Ariba Network launches
Ariba Network free to
sellers
Buyers need to pay TSS
fees for Network access
Two-Sided Model
$59B
121,017
$163B
$135B
$112B
$108B
$99B$101B
$74B
$450B
$500B+
759,159
153,924 179,872 200,305
289,482
351,394
427,868
1,090,052
1,400,000

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Invest in Customer Success: Customer Programs & Services
BEST IN CLASS
CUSTOMER SUPPORT
CUSTOMER SATISFACTION
(OCT ’11 – NOV ’12):
8.94 / 10
Customer Satisfaction Survey Scores
Perfect 10:
58%
Other
calls answered in 120 sec. or less
SERVICE LEVEL: 8.5/10
First Contact
Resolution
Monthly Avg.
since Oct ‘11
First Contact Resolution:
86%
Other
ROBUST PLATFORM
99.5%+
performance reliability
20
languages
SAS 70 and Webtrust certification
e-invoice VAT/tax
compliance in
39 countries

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Invest in Customer Success: Customer Programs & Services
CUSTOMER ENGAGEMENT
Seller OnboardingCustomer Education
Online CollaborationIn-Person Events
CUSTOMER PROGRAMS
Supplier
Enablement
Programs
Seller Programs
Benchmarking
Programs
New

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Demonstrate Benefits to Both Buyers and Sellers
Bid
Sell
SellersBuyers
Typical Value of Benefits Within Each Collaborative Business Process*
5-7%
4-15%
10-30%
4-7%
15%
0.25%
5%-10%
5-35%
7%-30%
15-35%+
15-45%
.20%
Process Savings
Savings on Basis of Spend
Increased Revenues
* Primary benefits listed. Additional benefits in many of the processes

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21
Value Drives Seller Compliance to Your Automation Initiatives
Ariba
sellers
Non-Ariba
sellers
KEY FINDINGS*
• Sellers value top-line benefits
over costs
0% 20% 40% 60%
Increased customer
satisfaction
Increased visibility via
collaboration
Increased revenues
Decreased costs
Improved product / service
quality
Accelerated cash flows
Competitive response
Top Reasons Sellers Adopt*
• 55% recognize the value of
process visibility
*SOURCE: Ariba survey of 582 sellers
Participants
50% 50%

22. 22© 2014 SAP AG or an SAP affiliate company. All rights reserved. 22© 2013 Ariba, Inc . All rights reserved.
RoadmapStrategy InnovationsVision
Demand
Sensing & Shaping
Demand Signal Management
Customer Activity Repository
Project Ganges
Collaborative Supply
Chain
Ariba Business Network
ERP
Constraint-Based
Manufacturing Planning
Supply Chain Execution Platform
Transportation Management
Warehouse Management
Event Management
Supply Chain Planning Platform
Sales & Operations Planning, Inventory & Service Level Optimization
Predictive Demand Management, Supply Planning
Response Management
Control Tower & Integrity
The ProductStrategy isbased on Data ModelHarmonization and UserProfiles
SAP Supply Chain Product Strategy
Demand Driven Supply
Networks
Logistics & Order
Fulfillment
Integrated Business
Planning
Supply Chain Monitoring
22
Monitoring
Product Strategy
Planning
Networks
Logistics
New
New

23. © 2014 SAP AG or an SAP affiliate company. All rights reserved.
Thank you
Contact information:
Thierry Loir
Solution Executive, Procurement – SAP Belux
Thierry.loir@sap.com
+32 486 136 468