© 2012 Ariba, Inc. All rights reserved. Ariba Network Best Practices Defining the Buyer Compliance Policy Leigh Tangretti, Director Network Services

Agenda Network Enablement is a Journey What is a Buyer Compliance Policy and why is it important? The key elements of a Buyer Compliance Policy and associated best practices Key Collaborative Commerce Questions to ask yourself © 2012 Ariba, Inc. All rights reserved. 2

3 Specialize and Sustain Capture More Complex Areas Expand and Enable Increase Adoption Process Maturity (Learning & Collaboration) Hi Low Hi Launch and Leverage Get Early Savings and Organizational Wins Adoption (technology/automation) Phase 3 Phase 2 Phase 2 Phase 1 The Path to Best-in-Class is a Journey

Agenda Network Enablement is a Journey What is a Buyer Compliance Policy and why is it important? The key elements of a Buyer Compliance Policy and associated best practices Key Collaborative Commerce Questions to ask yourself © 2012 Ariba, Inc. All rights reserved. 4

5 Buyer Compliance Policy The foundation for Collaborative Commerce communication is the Compliance Policy The Compliance Policy directly affects supplier enablement efforts All internal buyer stakeholders should be aware of and able to communicate the Compliance Policy

6 A strong Compliance Policy will result in more suppliers transacting electronically

Agenda Network Enablement is a Journey What is a Buyer Compliance Policy and why is it important? The key elements of a Buyer Compliance Policy and associated best practices Key Collaborative Commerce Questions to ask yourself © 2012 Ariba, Inc. All rights reserved. 7

What is the Buyer Compliance Policy? The governing policy by which a Buyer manages their Collaborative Commerce program. © 2012 Ariba, Inc. All rights reserved. 8 EDICT Designed to define the policy Communication Internal and external communication materials to educate on the policy Non-Compliant Process Buyer defined seller escalation path for sellers not supporting the policy

Defining the EDICT © 2012 Ariba, Inc. All rights reserved. 9 E EXPECTATION Inform suppliers of the project and what you want them to do D DEADLINE Set a deadline date for enablement I INCENTIVE Provide an incentive for participation C CONSEQUENCES Establish realistic and executable consequences for Non-Compliance T TOGETHERNESS Assure your suppliers that these changes are mutually beneficial; You are in this together.

Defining the EDICT © 2012 Ariba, Inc. All rights reserved. 10 E EXPECTATION Inform suppliers of the project and what you want them to do D DEADLINE Set a deadline date for enablement I INCENTIVE Provide an incentive for participation C CONSEQUENCES Establish realistic and executable consequences for Non-Compliance T TOGETHERNESS Assure your suppliers that these changes are mutually beneficial; You are in this together. Dear Seller, Your participation in this program is required…..

Defining the EDICT © 2012 Ariba, Inc. All rights reserved. 11 D DEADLINE Set a deadline date for enablement D DEADLINE Set a deadline date for enablement I INCENTIVE Provide an incentive for participation C CONSEQUENCES Establish realistic and executable consequences for Non-Compliance T TOGETHERNESS Assure your suppliers that these changes are mutually beneficial; You are in this together. Dear Seller, Completion of Ariba registration is expected by November 12, Registration on the Ariba Network must be completed within 2 weeks of receiving the Relationship Request Letter. Paper, , Fax transactions will cease as of November 12, 2012.

Defining the EDICT © 2012 Ariba, Inc. All rights reserved. 12 I INCENTIVE Provide an incentive for participation D DEADLINE Set a deadline date for enablement I INCENTIVE Provide an incentive for participation C CONSEQUENCES Establish realistic and executable consequences for Non-Compliance T TOGETHERNESS Assure your suppliers that these changes are mutually beneficial; You are in this together. Dear Seller, By participating in this program, you can obtain the following benefits: Accelerated cash flow Continued business with our company Document visibility of payment status online Favorable payment terms Preferred supplier designation Processing efficiencies Improved vendor visibility

Defining the EDICT © 2012 Ariba, Inc. All rights reserved. 13 C CONSEQUENCES Establish realistic and executable consequences for Non-Compliance D DEADLINE Set a deadline date for enablement I INCENTIVE Provide an incentive for participation C CONSEQUENCES Establish realistic and executable consequences for Non-Compliance T TOGETHERNESS Assure your suppliers that these changes are mutually beneficial; You are in this together. Dear Seller, Consequences of not participating in this program will expose your too: Extended payment terms Paper processing fees Discontinuation of paper delivery/receipt Discontinuation of business

Defining the EDICT © 2012 Ariba, Inc. All rights reserved. 14 T TOGETHERNESS Assure your suppliers that these changes are mutually beneficial; You are in this together. D DEADLINE Set a deadline date for enablement I INCENTIVE Provide an incentive for participation C CONSEQUENCES Establish realistic and executable consequences for Non-Compliance T TOGETHERNESS Assure your suppliers that these changes are mutually beneficial; You are in this together. Dear Seller, We are very pleased to announce a progressive change within our company that will improve the way we interact with our suppliers. We have entered into a relationship with Ariba, the leading global provider of collaborative business commerce solutions, which will allow our suppliers to easily extend their back-end systems and processes to benefit from electronic transactions.

What is the Buyer Compliance Policy? The governing policy by which a Buyer manages their Collaborative Commerce program. © 2012 Ariba, Inc. All rights reserved. 15 EDICT Designed to define the policy Communication Internal and external communication materials to educate on the policy Non-Compliant Process Buyer defined seller escalation path for sellers not supporting the policy

16 Components of an Adherence Policy: Internal Communication The most effective deterrent to supplier compliance is conflicting buyer messages Internal Communication should include:  Initiative Announcement letter to Internal Resources from Executive Sponsor  Training for Key Stakeholders  FAQs/Talking Points for Key Stakeholders  Periodic reminders of Initiative (desk drops, buyer Intranet posting, , performance reviews)

© 2010 Ariba, Inc. All rights reserved. Strategic Operational Individual  Business strategy, expected value and benefits  Program timeline and measures of success  Critical success factors  Specific operational changes resulting from the initiative  Process, technology and people objectives  Consideration of local operations and impact  Team accountability and involvement, particularly as it relates to adherence  Actions to be taken to prepare stakeholders  Impact on individual & team goals and objectives  Individual job and career benefits: “what’s in it for me?”  Specific job requirement changes/impact on roles & responsibilities  Activities and preparation for change resulting from program Key Internal Communication Messages 17

Sample of Internal Communication © 2012 Ariba, Inc. All rights reserved. 18 Operational Strategic Overview Timeline

19 Components of a Compliance Policy: Supplier Communication The Compliance Policy should be pervasive in all supplier communications:  Relationship Request Letter  PO Terms & Conditions  RFXs  Business Awards/Contracts  Payment (Remittance Notes)  Supplier Intranets, Extranets, etc. Key Stakeholders should emphasize the Compliance Policy during supplier interaction

20 Supplier Relationship Request Letter should “Issue an EDICT” Expectation Deadline Incentive Togetherness Consequence

What is the Buyer Compliance Policy? The governing policy by which a Buyer manages their Collaborative Commerce program. © 2012 Ariba, Inc. All rights reserved. 21 EDICT Designed to define the policy Communication Internal and external communication materials to educate on the policy Non-Compliant Process Buyer defined seller escalation path for sellers not supporting the policy

22 Components of a Compliance Policy: Supplier Enablement NCE Process Non-Compliant Escalation is a key component of the Supplier Enablement process For buyers with SE Services, NCE is a joint process that can maximize enablement success To be effective, the NCE process must incorporate the consequences outlined in the “EDICT”

23 SE Services NCE Process Resolve NAE and Ariba Supplier Enablement resumes progress with supplier Action 2 Action 3 Action 1 Buyer NAE Contact On Hold Report Reject supplier for participation in Collaborative Commerce initiative Execute appropriate consequence

24 “On Hold” Supplier Report Best Practice is to resolve On Hold status relationships within 10 business days

25 NCE Tracking Process

26 Supplier Enablement NCE Process

Agenda Network Enablement is a Journey What is a Buyer Compliance Policy and why is it important? The key elements of a Buyer Compliance Policy and associated best practices Key Collaborative Commerce Questions to ask yourself © 2012 Ariba, Inc. All rights reserved. 27

28 Key Collaborative Commerce Policy Questions Is participation in this initiative mandatory? Do we have a desired deadline date for suppliers to convert from paper POs/invoices to the Ariba Network? Should we provide incentive for the supplier to participate? If so, what incentives are we comfortable and/or prepared to offer? Do we want to alter payment terms for suppliers participating in collaborative commerce? Will we allow a supplier to just receive electronic Purchase Orders? Or, will we only issue electronic Purchase Orders if the supplier also submits invoices electronically? Are there any suppliers that we do not want or cannot move to the Ariba Network? Do we want to incorporate mass recruitment techniques?

29 Key Collaborative Commerce Policy Questions Do we have a new supplier set-up process? How does it need to be modified to include supplier set-up on the Ariba Network? How do we want to handle one-time vendors? Should they register on the AN? Should we return paper invoices received after a supplier has registered on the AN? Can we include supplier participation in collaborative commerce as a condition for the award or renewal of business with our company? What communication channels do we have available to publicize our collaborative commerce initiative to our suppliers? Do we have an effective way to communicate our collaborative commerce policy to internal stakeholders? Do we have executive buy-in and support for implementing our collaborative commerce policy?

Questions © 2012 Ariba, Inc. All rights reserved. 30