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Strategic Sourcing in the
Digital Economy
Dr. Martin Kotula, SAP Ariba / Divya Krishna, Bristlecone / Sidney Soares, wasl
October 26, 2016
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 2Public
The world is changing
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 3Public
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 3Public
Competing in today’s digital economy requires
speed and agility
5 technology trends
are changing the way
we work, live, and interact
Adoption of new technologies is happening at 10X scale and 5X speed
Hyper
connectivity
Super
computing
Cloud
computing
Smarter
world
Smarter
security
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 4Public
Mills & mining • O&G
Chemicals • EC&O
Utilities
Life sciences / Healthcare
Services / Transportation
Consumer goods / AFS
Public sector • Auto • IM&C
A&D • Higher education
Banking / Insurance
Retail / Wholesale
Telco • Media
High tech
Sports & entertainment
Defense & security
HurricaneSevere stormHigh winds
Digital transformation is different by industry
Ultimately every industry will be impacted

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Ariba
AribaAriba
Ariba

Ariba was founded in 1996 to facilitate and improve the procurement process using the internet. It provides spend management solutions to help companies analyze, understand, and manage spending to achieve cost savings. Ariba offers solutions across the entire spend management lifecycle from analysis and sourcing to contract management, procurement, payment, and supplier management. It has a large customer base across many industries and competes against companies like SAP, Oracle, and Basware. Ariba generates revenue primarily from software licensing, auction commissions, advertising, and subscription fees.

e commercearibaspend management
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 5Public
81%
Of executives surveyed believe simplification is
important for their organization, and 88% admit IT
investment is important to achieve simplification
Source: SAP benchmarking
36
Enterprise apps per billion US dollars in
revenue for the average company. This is
driving most of the technical complexity.
Source: SAP benchmarking
$50 billion
Incremental revenue available through
simplification in the United States, United
Kingdom, and Germany combined.
Source: S+G Global Brand Simplicity Index 2013
Complexity is an obstacle to digitization
Complexity is a barrier to simplification, innovation, and the transition to digital
From: To:
Standardization Simplification and innovation
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 6Public
CPOs are navigating a changing environment…
 Fragmented supply base
 Volatile markets
 Intricate costing and
pricing structures
 Detailed specs and design
requirements
 Extensive supplier
qualification
 Many line items and pricing
variances
 Existing strategic supplier
relationships
 Supplier contingency plans
 Regulatory and environmental
requirements
Market complexity Category complexity Strategic constraints
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 7Public
Procurement does
not have a clear
digital strategy
Source: Deloitte CPO Survey 2016
60%
have a clear digital
strategy
Source: Deloitte CPO Survey 2016
40%
Not even started
22% 26%
Have a clear digital strategy
aligned with the needs of the
wider organization
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 8Public
Many CPOs invest heavily into technology
Source: Deloitte CPO Survey 2016
45%
70%
43%
Self Service Procurement Mobile Technologies
23%
42%
26%
Cloud based solutions
2014
2015
1.6x
1.8x 1.7x

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"Procurement executives are continually challenged to maintain sustainable savings, overall operational efficiency, and risk mitigation in today’s highly volatile commodity markets and risk-prone global supply chains. Organizations today look up to procurement teams to deliver value beyond tactical savings. Procurement is increasingly seen as the driver of business value through cross-functional collaboration within the enterprise as well as outside. During this session, we’ll hear about two successful transformation stories: • Murphy Oil, which was supported by Accenture in the implementation • SAP Global Procurement organization, describing how SAP’s internal procurement uses SAP Ariba solutions Learn how a truly integrated source-to-settle process in both companies offers a tremendous ROI, with spend analysis driving effective sourcing, well-managed suppliers, and contract-compliant purchases. We will share an overview of the journey, from the vision and business case through to deployment of technology, along with the necessary process change management."

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One-time purchase? Non-catalog item? Looking for new vendors? Maybe it’s a product or service you haven’t purchased before, or you need to find local or minority-owned vendors. No matter the project size, timing, or amount, hear from a panel of customers who have used Ariba Discovery to fulfill a wide range of tactical spend and indirect purchases. This session will focus on the use cases and opportunities for indirect/tactical spend and the challenges buyers face in these scenarios. Caesars Entertainment will share their experience of standardizing Ariba Discovery to drive compliance and savings corporate-wide. Other customers will discuss why they chose Ariba Discovery and how it fits with their sourcing and procurement processes.

ariba live 2014networked economyariba
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 9Public
The digital sourcing framework
Where are you today?Drivers
Technology
Competition
Suppliers
Globalization
Megatrends
Shareholder
expectations
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 10Public
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 11Public
INTEGRATION to SAP and NON-SAP Systems
End-to-End – Single portal for all collaboration with your suppliers. Cross-organizational management of your pricing terms.
Comprehensive intelligence from spend visibility.
Key Capabilities In Source-to-Contract
 Spend Classification
 Commodity Classification
 Enrichment Services
 Market Intelligence
 D&B Insight
 Spend Analytics
 Dashboard – 360 Visibility
Spend Visibility
 Supplier Discovery
 Strategic Sourcing eRFX
 Reverse Auctions
 Knowledge/ Repository
 Reporting/ Analysis
 Project Management
 Process Compliance
Sourcing
 Contracting Workflow
 Authoring
 Repository
 Contract Lifecycle
Notifications
 Collaboration
 Traceability & Compliance
 Process Compliance
 Expiring Contracts
Contract
 Supplier Registration & On-
Boarding
 Pre-Qualification and Quality
tracking
 Diversity/ Green/
Sustainability
 Risk Management
 Surveys
 Scorecards
 Performance Tracking
 Vendor Master Data
Supplier Info
& Performance
SUPPLIERS
Fulfill SettleMarket
Buyer management
BUYERS
Procure SettleSource
Supplier management
Integration to SAP and third-party solutions, security, open platform
SAP Ariba solutions in the
context of digital
transformation
Suppliers
& networks
Customer
experience
Workforce
engagement
loT
& big data Security
SAP HANA Platform
Digital Core
SPENDCATEGORIES
Direct
Indirect and MRO
Contingent labor
Travel
Ariba Network

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"Thinking about expanding your procurement solution? Seeking additional value and ROI? How do you get from here to there? What examples do you have? Many organizations start the digital journey with a partial solution to kick off a transformation process. Once you have experience with your revised operating model and SAP Ariba solutions, why not take the opportunity to maximize efficiency and ROI? Likewise, you may have a legacy on-premise SAP Ariba solution that is not meeting your requirements today in terms of scope and response time. Now is a great time to move to our new cloud solutions and realize lower TCO, a great user experience, and tremendous benefits."

non-full timecontingent laborpermanent workers
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 13Public
Higher average
annual savings where
organizations drive
best price through
e-auctions, global
sourcing, and new
suppliers
Source: SAP Performance Benchmarking
54%
Spend that is contract
compliant at best-in-class
companies, versus 48%
at all others
Source: Ardent Partners
69%
Lower sourcing cycle
time when using
auction as the
e-sourcing strategy
over RFP
Source: SAP Performance Benchmarking
47%
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 14Public
The future is just around the corner…
Maersk
$800 million in savings
within a span of 4 years
Etihad
1 department for sourcing
from 5 in the past with
common processes
Al-Futtaim
$16 million savings and 62% of
transactions fast-tracked
through catalogs
Abu Dhabi Commercial Bank
60% reduction in tendering
time and support through
auctions; payback < 3 months
ExxonMobil
4,000 sourcing projects per
year managed and 15,000
contracts stored in SAP Ariba
solutions
BASF
Deployment of global
strategic sourcing suite on
SAP Ariba solutions with co-
innovation
© 2016 SAP SE or an SAP affiliate company. All rights reserved. 15Public
Thank you!
Digital DNA: need to
build new capabilities
Dr. Martin Kotula
Senior Director
SAP SE
Network Value Organization
Centre of Excellence
+49 173 7399 120
martin.kotula@sap.com

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17
SAP Ariba Network Live, Dubai 2016
Strategic Sourcing in the Digital Economy
Transform Procurement by
Driving Operational Efficiency at wasl
Leverage BiC Processes & Application | Enhance Adoption | Institutionalize Benefits
Transformation Journey at wasl
Design Procurement
Model & Processes
Identify Processes –
Upstream Procurement
Breakdown Processes-
System Automation
Mapping
Deploy Applications –
as per Design
Drive User AdoptionMeasure against the Plan
Involve Other Processes…
Prior to Transformation of Processes, wasl planned the segmentation within their Procurement org as per business
priorities. Processes were detailed and key focus was given to realizing operation efficiency with tool deployment.Key Lesson
wasl SAP Ariba Upstream Deployment - Priorities
SAP ECC
Request & Buy Invoice & Pay
ContractSourcePlan OrderApproveRequest PayManageReceive
Supplier Management
Supplier
Collaboration
Involve Supplier in
Your Growth
Tech & Process
Adoption
Enhance People,
Processes & Skills
Identify &
Mitigate Risks
Identify Best Source
of Supply
Achieve Business Fit
Neatly align solution to
defined solution matrix
SAP Ariba deployment priorities were pre-defined
keeping the 4 pillars in mind:
• All solution gains linked to business fit
• Adoption of key business segments
• Project risk
• Processes involving better supplier integration
Key
Lesson
Attract & Source
Model defined by wasl for measuring Digitization
Supplier Discovery Approach to Market Evaluation, Selection Contract Management
97%
Reporting
96% 100% 95% 95%
56% 97%
Manage & Maintain
Best Fit Quality, Performance Surveys
73% 100%
13% 87%
Assess & Refine
Review of Policy & Procedures
50% 50%
Overall Score (Upstream Procurement Process)
44% 88%

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Data is the "new oil." Spend data can unlock hidden opportunities to maximize savings, improve compliance, and mitigate supply chain risks. Without proper visibility into spend, suppliers, or market information, sourcing and procurement decisions can run counter to business objectives. Comprehensive visibility is the stepping stone to effective spend management. This session shares customer success stories and best practice insights to help you get the most from spend analytics initiatives.

sapcontingent workforcetarp
 End goals linked to process design
 Process design flowed in to SAP Ariba deployment
 Process efficiency linked to End State solution
 Focus of the engagement on deriving
Operational efficiency
 Easier to measure (activities automated with
SAP Ariba solution)
 Priorities were articulated
 Alignment with deployment partner
 Clarity on solution goals, work arounds, IP
development, solution fit, etc.
Summary
Compliance Drive 100% internal
disciplineCompliance
Cost
Savings
Focus on value enhancements Cost
Savings
Lead Time
Reduction
Effective utilization of
resources
Lead Time
Reduction
LongTermImpactofDigitization
Bristlecone Approach for Procurement Transformation
Process
re-alignment
• Business requirements
Review
• Industry best practices
and guidelines
• Fit- Gap Analysis
Application
Deployment
• Process driven
Configuration
• Standard functionality
Enhancement
• End to End Integration
User Adoption
• Business User Training
• Supplier On-boarding
• Change Management
Realize
Benefits
• Process compliance
• Reduction in cycle
times
• Increased savings
SAP Ariba Centre
of Excellence
SAP Ariba
Partnership
Intellectual
Properties
Decision Support
Innovation -
Analytics
Transformation Model Asset Base
Consulting &
Diagnostics
Thank You
Bristlecone Middle East
PO Box 282567, Jumeirah Lake Towers, Dubai
www.bcone.com
United States . Canada . United Kingdom . Germany . Switzerland. Dubai . India . Malaysia . Singapore
©2016 Bristlecone Ltd. Bristlecone believes the information in this presentation is accurate as of the presentation date. The information is subject to change without notice. Bristlecone acknowledges the proprietary rights of the trademarks and product
names of all companies mentioned herein. All Rights Reserved.
Bristlecone International AG
Rheinweg 7, Schaffhausen 8200, Switzerland
www.bcone.com
Bristlecone GMBH
Partnerport, Waldorf, D-69190, Germany
www.bcone.com
23

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Strategic Sourcing in the Digital Economy

  • 1. Strategic Sourcing in the Digital Economy Dr. Martin Kotula, SAP Ariba / Divya Krishna, Bristlecone / Sidney Soares, wasl October 26, 2016
  • 2. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 2Public The world is changing © 2016 SAP SE or an SAP affiliate company. All rights reserved. 3Public
  • 3. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 3Public Competing in today’s digital economy requires speed and agility 5 technology trends are changing the way we work, live, and interact Adoption of new technologies is happening at 10X scale and 5X speed Hyper connectivity Super computing Cloud computing Smarter world Smarter security
  • 4. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 4Public Mills & mining • O&G Chemicals • EC&O Utilities Life sciences / Healthcare Services / Transportation Consumer goods / AFS Public sector • Auto • IM&C A&D • Higher education Banking / Insurance Retail / Wholesale Telco • Media High tech Sports & entertainment Defense & security HurricaneSevere stormHigh winds Digital transformation is different by industry Ultimately every industry will be impacted
  • 5. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 5Public 81% Of executives surveyed believe simplification is important for their organization, and 88% admit IT investment is important to achieve simplification Source: SAP benchmarking 36 Enterprise apps per billion US dollars in revenue for the average company. This is driving most of the technical complexity. Source: SAP benchmarking $50 billion Incremental revenue available through simplification in the United States, United Kingdom, and Germany combined. Source: S+G Global Brand Simplicity Index 2013 Complexity is an obstacle to digitization Complexity is a barrier to simplification, innovation, and the transition to digital From: To: Standardization Simplification and innovation
  • 6. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 6Public CPOs are navigating a changing environment…  Fragmented supply base  Volatile markets  Intricate costing and pricing structures  Detailed specs and design requirements  Extensive supplier qualification  Many line items and pricing variances  Existing strategic supplier relationships  Supplier contingency plans  Regulatory and environmental requirements Market complexity Category complexity Strategic constraints
  • 7. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 7Public Procurement does not have a clear digital strategy Source: Deloitte CPO Survey 2016 60% have a clear digital strategy Source: Deloitte CPO Survey 2016 40% Not even started 22% 26% Have a clear digital strategy aligned with the needs of the wider organization
  • 8. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 8Public Many CPOs invest heavily into technology Source: Deloitte CPO Survey 2016 45% 70% 43% Self Service Procurement Mobile Technologies 23% 42% 26% Cloud based solutions 2014 2015 1.6x 1.8x 1.7x
  • 9. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 9Public The digital sourcing framework Where are you today?Drivers Technology Competition Suppliers Globalization Megatrends Shareholder expectations
  • 10. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 10Public
  • 11. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 11Public INTEGRATION to SAP and NON-SAP Systems End-to-End – Single portal for all collaboration with your suppliers. Cross-organizational management of your pricing terms. Comprehensive intelligence from spend visibility. Key Capabilities In Source-to-Contract  Spend Classification  Commodity Classification  Enrichment Services  Market Intelligence  D&B Insight  Spend Analytics  Dashboard – 360 Visibility Spend Visibility  Supplier Discovery  Strategic Sourcing eRFX  Reverse Auctions  Knowledge/ Repository  Reporting/ Analysis  Project Management  Process Compliance Sourcing  Contracting Workflow  Authoring  Repository  Contract Lifecycle Notifications  Collaboration  Traceability & Compliance  Process Compliance  Expiring Contracts Contract  Supplier Registration & On- Boarding  Pre-Qualification and Quality tracking  Diversity/ Green/ Sustainability  Risk Management  Surveys  Scorecards  Performance Tracking  Vendor Master Data Supplier Info & Performance
  • 12. SUPPLIERS Fulfill SettleMarket Buyer management BUYERS Procure SettleSource Supplier management Integration to SAP and third-party solutions, security, open platform SAP Ariba solutions in the context of digital transformation Suppliers & networks Customer experience Workforce engagement loT & big data Security SAP HANA Platform Digital Core SPENDCATEGORIES Direct Indirect and MRO Contingent labor Travel Ariba Network
  • 13. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 13Public Higher average annual savings where organizations drive best price through e-auctions, global sourcing, and new suppliers Source: SAP Performance Benchmarking 54% Spend that is contract compliant at best-in-class companies, versus 48% at all others Source: Ardent Partners 69% Lower sourcing cycle time when using auction as the e-sourcing strategy over RFP Source: SAP Performance Benchmarking 47%
  • 14. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 14Public The future is just around the corner… Maersk $800 million in savings within a span of 4 years Etihad 1 department for sourcing from 5 in the past with common processes Al-Futtaim $16 million savings and 62% of transactions fast-tracked through catalogs Abu Dhabi Commercial Bank 60% reduction in tendering time and support through auctions; payback < 3 months ExxonMobil 4,000 sourcing projects per year managed and 15,000 contracts stored in SAP Ariba solutions BASF Deployment of global strategic sourcing suite on SAP Ariba solutions with co- innovation
  • 15. © 2016 SAP SE or an SAP affiliate company. All rights reserved. 15Public
  • 16. Thank you! Digital DNA: need to build new capabilities Dr. Martin Kotula Senior Director SAP SE Network Value Organization Centre of Excellence +49 173 7399 120 martin.kotula@sap.com
  • 17. 17 SAP Ariba Network Live, Dubai 2016 Strategic Sourcing in the Digital Economy Transform Procurement by Driving Operational Efficiency at wasl Leverage BiC Processes & Application | Enhance Adoption | Institutionalize Benefits
  • 18. Transformation Journey at wasl Design Procurement Model & Processes Identify Processes – Upstream Procurement Breakdown Processes- System Automation Mapping Deploy Applications – as per Design Drive User AdoptionMeasure against the Plan Involve Other Processes… Prior to Transformation of Processes, wasl planned the segmentation within their Procurement org as per business priorities. Processes were detailed and key focus was given to realizing operation efficiency with tool deployment.Key Lesson
  • 19. wasl SAP Ariba Upstream Deployment - Priorities SAP ECC Request & Buy Invoice & Pay ContractSourcePlan OrderApproveRequest PayManageReceive Supplier Management Supplier Collaboration Involve Supplier in Your Growth Tech & Process Adoption Enhance People, Processes & Skills Identify & Mitigate Risks Identify Best Source of Supply Achieve Business Fit Neatly align solution to defined solution matrix SAP Ariba deployment priorities were pre-defined keeping the 4 pillars in mind: • All solution gains linked to business fit • Adoption of key business segments • Project risk • Processes involving better supplier integration Key Lesson
  • 20. Attract & Source Model defined by wasl for measuring Digitization Supplier Discovery Approach to Market Evaluation, Selection Contract Management 97% Reporting 96% 100% 95% 95% 56% 97% Manage & Maintain Best Fit Quality, Performance Surveys 73% 100% 13% 87% Assess & Refine Review of Policy & Procedures 50% 50% Overall Score (Upstream Procurement Process) 44% 88%
  • 21.  End goals linked to process design  Process design flowed in to SAP Ariba deployment  Process efficiency linked to End State solution  Focus of the engagement on deriving Operational efficiency  Easier to measure (activities automated with SAP Ariba solution)  Priorities were articulated  Alignment with deployment partner  Clarity on solution goals, work arounds, IP development, solution fit, etc. Summary Compliance Drive 100% internal disciplineCompliance Cost Savings Focus on value enhancements Cost Savings Lead Time Reduction Effective utilization of resources Lead Time Reduction LongTermImpactofDigitization
  • 22. Bristlecone Approach for Procurement Transformation Process re-alignment • Business requirements Review • Industry best practices and guidelines • Fit- Gap Analysis Application Deployment • Process driven Configuration • Standard functionality Enhancement • End to End Integration User Adoption • Business User Training • Supplier On-boarding • Change Management Realize Benefits • Process compliance • Reduction in cycle times • Increased savings SAP Ariba Centre of Excellence SAP Ariba Partnership Intellectual Properties Decision Support Innovation - Analytics Transformation Model Asset Base Consulting & Diagnostics
  • 23. Thank You Bristlecone Middle East PO Box 282567, Jumeirah Lake Towers, Dubai www.bcone.com United States . Canada . United Kingdom . Germany . Switzerland. Dubai . India . Malaysia . Singapore ©2016 Bristlecone Ltd. Bristlecone believes the information in this presentation is accurate as of the presentation date. The information is subject to change without notice. Bristlecone acknowledges the proprietary rights of the trademarks and product names of all companies mentioned herein. All Rights Reserved. Bristlecone International AG Rheinweg 7, Schaffhausen 8200, Switzerland www.bcone.com Bristlecone GMBH Partnerport, Waldorf, D-69190, Germany www.bcone.com 23