SAP's procurement solutions help companies address challenges in today's economy by delivering efficient source-to-pay processes to reduce costs. SAP provides options for on-premise, hosted, and on-demand deployment to support procurement goals. Benchmarking shows SAP solutions can increase managed spend and savings by hundreds of percent. SAP aims to drive rapid time to value through flexible deployment and easy to use best practice processes.

1. SAP’s Approach to Sourcing and
Procurement Strategies in
Today’s Economy;
Cathy Daw
Procurement Specialist
SAP UK Ltd
September 29th 2010
© SAP 2010/ Page 1

2. DIRECTION
MARKET
?
© SAP 2009 / Page 2
2010/ Page 2

3. Global Trends are Driving Change in
Procurement Practices
Economic Focus on
Downturn Globalization Sustainability Efficiency
Increased Focus Growing Supplier Importance of Demand for Rapid
on Costs Risk Governance Productivity
New approaches to Supply base becoming Increased pressure on Employees requiring
savings more global sustainability intuitive self services
Pressure to increase Need to effectively objectives
Focus on automated
spend visibility and manage risk and New regional and and integrated
management provide insights global regulations processes

4. In this market,
“
“
my focus must be on
delivering reduced costs.
Maximize sustainable
cost savings
Optimize contracts and enforce
sustainability KPIs
Manage suppliers’ performance
and information
Deliver rapid time to value
© SAP 2010/ Page 4

5. KEY
ISSUES ?
© SAP 2009 / Page 5
2010/ Page 5

6. Inefficient Source-to-Pay Processes
Result in High Costs
Ineffective Governance and
High Costs
Compliance
Lack of centralized information;
Lack of ability to enforce
transparency into demand, current
processes, contracts,
spend, and costs
sustainability goals and other
Subsidiary core KPIs
! XYZ
R&D
Plant B
Plant A
CPO
Direct Materials
Corporate PROCUREMENT
A/P
Finance
Services
East Region
Indirect
Slow Time to Value Goods
Gradual innovation
Poor Supplier Risk Slow Productivity Increases
and adoption
Management
Lengthy deployment times Non-standardized processes,
Limited to no process and Inability to monitor and reduce
supplier risk, monitor supplier poor user adoption and
or data integration to ERP disparate systems
performance and drive improvements
© SAP 2010/ Page 6

7. Best-In-Class Procurement Organizations
Significance Difference Between Top
Performing Companies and Other Companies
Effectiveness:
Spend Under Source to Pay Supplier
Return on Assets
Management Automation Management
Top
Performing 82% 81% 64%
Companies
All Other 47% 37% 36%
Companies
0 20 40 60 80 100 0 20 40 60 80 100 0 20 40 60 80 100
Source – Aberdeen, CPO ‘s Agenda 2009
© SAP 2010/ Page 7

8. Pace of Adoption of Procurement Solutions
Speed of Change
© SAP 2007 / Page 8
2010/ Page 8

9. Customer Market Adoption of
Procurement Solutions
Adoption of Procurement Solutions Total
Continues to Accelerate
30,000
Operational Procurement
Global Procurement Customers
Sourcing
Contract Management
Supplier Management
Invoice Management
Spend Analysis
Services Procurement
On-Demand
1990 1995 2000 2005 *2009
Time
Source: Forrester: TechRadar For Sourcing and Vendor
© SAP 2010/ Page 9 Mgmt Professionals Q3’2009

10. Procurement Solutions Evolution Curve
Across All Key Solution Areas
Procurement is Evolving Across All Solution Areas
Source: Forrester: TechRadar For Sourcing and Vendor
Mgmt Professionals Q3’2009
© SAP 2010 / Page 10

11. What SAP have seen from CPO’s
•A clear move to increased centralisation
•An increase in internal prominence
•Procurement goals closely related to finance
•Supplier Collaboration
Procurement’s Interface with the Rest of the Company
100%
80%
60%
40%
20%
0%
2008 2010 Future
Proactive & Consistent Occasional proactive Reactive Rare
© SAP 2009 / Page 11

12. SAP’s
Approach ?
© SAP 2009 / Page 12
2010/ Page 12

13. SAP Procurement Portfolio
SAP Spend Performance
Source Strategic Procurement
Management
Qualify
Enables the complete source to
Negotiate contract process and the
consistent improvement of
Analyze/ strategic sourcing activities
Strategize SAP Sourcing
Award
Requisition or
Contract
Spot Source Operational Procurement
Enables the complete procure to
Invoice pay process from daily
SAP E-Procurement
Approve requisitions (including spot
sourcing) to the order and pay
process for all goods and
Receive services
Assign
Order

14. Efficient Source-to-Pay Processes Ensure
Cost Savings
Automate Governance and
Reduce Costs
Compliance
Centralized spend visibility
Enforce processes,
and opportunity identification
contract usage, sustainability
for sourcing and demand
Subsidiary requirements and other core
management XYZ
governance goals
R&D
Plant B
Plant A
CPO
Direct Materials
Corporate
A/P
Finance Services
East Region
Provides Rapid Indirect
Goods
Time to Value
Increase speed to value
Manage Supplier Risk Deliver Enhanced Productivity
through rapid innovation
and adoption Automated and easy to use
Quick On-Demand deployment Streamline supplier management for best practice processes;
and integrated support services better efficiency, reduced risk and decreased cycle times and
Seamless process and data increased supplier performance and increased adoption
integration to ERP engagement
© SAP 2010/ Page 14

15. SAP Procurement Solutions Deliver Choices
for Deployment
SAP
Delivers on-premise,
hosted, and on-demand
On-premise: deployment options
SAP Enables a common
experience across all
procurement solutions
On-demand: Supports additional choice of
Business process deployment while extending
SAP outsourcing (BPO): existing investments
Enabled through partners
Partners
Deliver BPO offerings and other
flexible deployment options
© SAP 2010/ Page 15

16. ON-DEMAND
VALUE OF
!
© SAP 2009 / Page 16
2010/ Page 16

17. Procurement On Demand Solutions Deliver
Rapid Time to Value
SAP Sourcing On-Demand
Over 400 customers and
growing rapidly
Delivers closed-loop
strategic source to
contract process across
all categories of spend
Provides standard
integration into ERP
Rapidly innovated with 2
new releases per year
Business Suite
© SAP 2010/ Page 17

18. Revlon - Up and Running Quickly
A Significant Increase in Managed Spend
250% increase in COGS
savings over three years
“The rapid, three-week Phase I
implementation process allowed us
to immediately start generating 300% increase in managed
benefits.” spend, using same staff
William Reis,
levels
Chief Procurement Officer
Live implementation in
three weeks
© SAP 2010 / Page 18

19. SAP Customers are Extending Their Reach
with Analytics – Spend
Drive Spend Performance Management
Spend Related
Insight
Savings Comparison to
Potential Plan/Budget
Price Evaluate
Variance Supplier Risk
Data Standardization & Contract
Enrichment Performance
ERP
GL
BI
P-Cards T&E
Deliver Integrated Data Provide Transparency
Management and Insight
“Automate data capture Comprehensive data model
Enable data enrichment Powerful adhoc analytics
and normalization
© SAP 2010 / Page 19

20. Identifying Value
!
© SAP 2009 / Page 20
2010 Page 20

21. SAP Value Discovery Offer
Helps Identify and Prioritize Quick Wins
SAP Performance Benchmarking Sample Analysis:
Performance of primary KPIs and potential benefit
Benchmark Potential Benefit
One of the largest global KPI Performance (in $ Million)
benchmarking programs
Procurement Costs Bot 25% Average Top 25%
0 – 2.9
As % of Spend 3.0 1.5 1.1 0.6
Over 5,000 participants Average Annual Bot 25% Average Top 25%
0 – 4.4
Savings (in %) 2.0 3.3 5.0 5.8
Over 20 processes, including Spend Managed
Bot 25% Average Top 25% 1.1 – 3.7
Sourcing and Procurement Strategically (in %)
68.9 69.0 74.7 89.0
Maverick Spend
Bot 25% Average Top 25% 0.1 – 1.0
Comparison with industry peers (in %)
15.8 7.2 6.4 1.2
Benefit of Closing Gap to Average
Benefit of Closing Gap to Top 25%
Industry Specific Benchmarks Available:
Example Spend Managed Strategically (Indirect)
Average Top 25%
© SAP 2010 / Page 21

22. THE
SUMMARY !
© SAP 2009 / Page 22
2010 Page 22

23. Key Take Aways
The pace of change continues to increase in all
solutions areas and particularly with respect to
on-demand
The SAP sourcing and procurement platform
provides the best opportunity to drive increased
speed of productivity across your organization -
no matter how diverse
Increasing importance of managing all aspects of
your source-to-pay process to obtain realized cost
savings
In today’s market, you need to drive incremental,
as well as quick wins through flexible deployment
options – on premise, hosted or on-demand
© SAP 2010 / Page 23

24. Join us October 20th – to hear from some of
our customers.......to register
www.sapevent.co.uk/procurement
Cathy Daw
Procurement Specialist
© SAP 2007 / Page 24

25. SAP’s Approach to Sourcing and
Procurement Strategies in
Today’s Economy;
Cathy Daw
Procurement Specialist
SAP UK Ltd
September 29th 2010
© SAP 2010/ Page 25

26. Copyright © 2010 SAP AG
All rights reserved
No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission
of SAP AG. The information contained herein may be changed without prior notice.
Some software products marketed by SAP AG and its distributors contain proprietary software components of other
software vendors.
SAP, R/3, xApps, xApp, SAP NetWeaver, Duet, SAP Business ByDesign, ByDesign, PartnerEdge and other SAP products
and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in
Germany and in several other countries all over the world. All other product and service names mentioned and associated
logos displayed are the trademarks of their respective companies. Data contained in this document serves informational
purposes only. National product specifications may vary.
The information in this document is proprietary to SAP. This document is a preliminary version and not subject to your
license agreement or any other agreement with SAP. This document contains only intended strategies, developments, and
functionalities of the SAP® product and is not intended to be binding upon SAP to any particular course of business,
product strategy, and/or development. SAP assumes no responsibility for errors or omissions in this document. SAP does
not warrant the accuracy or completeness of the information, text, graphics, links, or other items contained within this
material. This document is provided without a warranty of any kind, either express or implied, including but not limited to the
implied warranties of merchantability, fitness for a particular purpose, or non-infringement.
SAP shall have no liability for damages of any kind including without limitation direct, special, indirect, or consequential
damages that may result from the use of these materials. This limitation shall not apply in cases of intent or gross
negligence.
The statutory liability for personal injury and defective products is not affected. SAP has no control over the information that
you may access through the use of hot links contained in these materials and does not endorse your use of third-party Web
pages nor provide any warranty whatsoever relating to third-party Web pages
© SAP 2010/ Page 26