The role of supplier networks in financial transformation

© copyright OB OB10 and the OB10 logo are trademarks of OB10 Limited and are protected by law Agenda The CFO perspective The HP roadmap Enabling technologies Where the market is headed Potential financial impact

© copyright OB OB10 and the OB10 logo are trademarks of OB10 Limited and are protected by law The CFO Perspective Is A/P More Strategic More Same Less Source: 2009 Aberdeen Survey

© copyright OB OB10 and the OB10 logo are trademarks of OB10 Limited and are protected by law The CFO Perspective TreasuryPurchasing Finance A/P Source: 2009 Aberdeen Survey

© copyright OB OB10 and the OB10 logo are trademarks of OB10 Limited and are protected by law The CFO Perspective Source: 2009 Aberdeen Survey

©2010 HP6 HP GBS – our strategy journey 6 Decentralized Regional Shared Services Global Consolidation and Adoption Technology Enablement & Process Optimization Business Value Add as End-to- end Process Owner COSTSVALUE TIME

© copyright OB OB10 and the OB10 logo are trademarks of OB10 Limited and are protected by law 7 Invoice Receipt A/P WorkflowERP Invoice To Pay Process Settlement & Financing The A/P Process

© copyright OB OB10 and the OB10 logo are trademarks of OB10 Limited and are protected by law 8 Account Payable Workflow A/P Workflow Implementation On Premise 71% Hosted 20% Out- Sourced 9% No Intention 5% Implemented 45% Currently Implementing 15% Actively Planning 20% Planning 15% Source: 2009 Paystream Advisors Survey

© copyright OB OB10 and the OB10 logo are trademarks of OB10 Limited and are protected by law Benefits of A/P Workflow Automates routing and approval of invoices Standardizes the process Ensures greater visibility / compliance Enables off-shoring of non value added activities Compresses invoice approval cycle time

© copyright OB OB10 and the OB10 logo are trademarks of OB10 Limited and are protected by law 10 Invoice Receipt A/P WorkflowERP Invoice To Pay Process Settlement & Financing The A/P Process

© copyright OB OB10 and the OB10 logo are trademarks of OB10 Limited and are protected by law Why paper invoices persist Customers: −ERP Input formats are proprietary −Cost and complexity of working with hundreds of suppliers Suppliers: −Billing Systems output invoices proprietary formats −Cost and complexity of customizing for clients

© copyright OB OB10 and the OB10 logo are trademarks of OB10 Limited and are protected by law 12 Invoice submission methods Imaging Optical character recognition Outsourcing E-Invoicing supplier network

© copyright OB OB10 and the OB10 logo are trademarks of OB10 Limited and are protected by law CustomerSupplier Network Services Service components

© copyright OB OB10 and the OB10 logo are trademarks of OB10 Limited and are protected by law The Supplier Network Many of your suppliers will be on the network We enroll those who are not

© copyright OB OB10 and the OB10 logo are trademarks of OB10 Limited and are protected by law The global supplier enrolment team OB10 Office Locations

© copyright OB OB10 and the OB10 logo are trademarks of OB10 Limited and are protected by law Campaign Reporting

© copyright OB OB10 and the OB10 logo are trademarks of OB10 Limited and are protected by law 17 Touchless, Straight Through Processing Recycling is good at home… but not in AP operations No Touch Automated Matching Immediate Receipt VAT Compliant Full Line-Item Level Detail

© copyright OB OB10 and the OB10 logo are trademarks of OB10 Limited and are protected by law SAP Add-on Connector Supplier Customer / Buyer Firewall Supplier Archive

© copyright OB OB10 and the OB10 logo are trademarks of OB10 Limited and are protected by law Self-Service – Collaborative Network Procure to Pay Framework Electronic Purchase Order Delivery Electronic Invoice Management Supplier Financing Payment Management Purchasing Treasury A/P Sales Order Billing Treasury A/R Standard Supplier Information Buyer Supplier

© copyright OB OB10 and the OB10 logo are trademarks of OB10 Limited and are protected by law Self-Service – Collaborative Network Procure to Pay Framework Electronic Purchase Order Delivery Electronic Invoice Management Supplier Financing Payment Management Purchasing Treasury A/P Sales Order Billing Treasury A/R Standard Supplier Information Buyer Supplier

© copyright OB OB10 and the OB10 logo are trademarks of OB10 Limited and are protected by law Discounting Is More Attractive Than Ever Sources: REL/Hackett Group; own analysis; Cash: Goldman analysis of S&P 500; Interest on 4 week T-Bills by Federal Reserve; Invoice date Approval Due date 53 days 25 days Cash as % of assets Interest rates ’02 ’10 6% 10% ’05 ’10 0% 5%

© copyright OB OB10 and the OB10 logo are trademarks of OB10 Limited and are protected by law 22 Supplier views approved invoices… Click to View Details for Accelerated Payment

© copyright OB OB10 and the OB10 logo are trademarks of OB10 Limited and are protected by law 23 …Evaluates accelerated payment offer… Invoice Details & Current Terms Displayed Click Here to Select a Date for Accelerated Payment

© copyright OB OB10 and the OB10 logo are trademarks of OB10 Limited and are protected by law 24 …Selects payment date… Click on the Date Desired for Accelerated Payment

© copyright OB OB10 and the OB10 logo are trademarks of OB10 Limited and are protected by law 25 …Requests early payment Proposed Terms for Accelerated Payment Click “Submit” to Accept Terms for Accelerated Payment or “Cancel” to Leave Payment Date as is

© copyright OB OB10 and the OB10 logo are trademarks of OB10 Limited and are protected by law $5bn Invoiced spend Non-discount spend: 80% $4bn Accelerated spend: 20% $800M Accelerated spend: $800M Offer rate (APR) 12% Average acceleration 30 days Additional discount p.a.: $8M Example of $5 billion spend company

© copyright OB OB10 and the OB10 logo are trademarks of OB10 Limited and are protected by law ‣ Spend:$5 billion ‣ Invoices: 300,000 ‣ Cost per invoice: $10 Business case example Business Case AP automation ‣ Save $5 per invoice ‣ Annual savings $1.5M ‣ Payment terms: 45 days Net ‣ Approval cycle: 25 days Example company Business Case including Dynamic Discounting ‣ Acceleration 30 days ‣ Combined annual savings $1.5M + $8M = $9.5M ‣ Reduce approval cycle to 10 days