Supplier Community Enablement: New Channels for Content ONCE Global Summit May 2005 Vance Checketts Global Solution Architect – Procurement

Supplier Community Enablement Defined  Supply base management – Identification – Qualification – Negotiation  Catalog & contract management – Catalog content creation & management – Price changes – Contract deliverables & compliance  Purchase/sales execution – Electronic messages – Self-service transactions – Online inquiries

The Problem... Supplier enablement has traditionally dictated an “every one for themselves” solution Company ACompany DCompany CCompany BCompany E

n 2 Effect  5 buyers, 5 suppliers = 5 2 or 25 individual connections  The net result is Distributed Complexity  High costs, low performance for everyone BuyersSuppliers

Symptoms of Distributed Complexity  Requires multiple standards, protocols and translators  Buyers need to maintain preferences for each supplier  All supplier changes require work for buyers  IT project for each supplier “enablement” effort  Difficulty maintaining connections  No centralized transaction tracking and error control Result: Even the best companies have only “enabled” a small % of their supply base

Solution – Supplier Networks Centralized information, centralized management

Also... Specialized Services  Specialized procurement services are a great compliment to procurement software and traditional implementation services  Perfect Commerce, Saqqara – Catalog management  D&B, Austin-Tetra – Supplier data cleansing  Zycus – Category rationalization  AT Kearney – Sourcing strategy  BearingPoint – Business process definition  IBM – Business process outsourcing

Remote: Network / Hub Remote: Supplier Hosted LocalCatalogs Content Management Multiple options to support different needs Raw materials, assets & mission critical items Items under strict controls (hazardous, etc.) Items under existing long term agreements Loaded from spreadsheets, XML or EDI Dynamic pricing & availability Configurable items Large selection of items Accessed via punchout Services, supplies & non-critical items New or sourcing items, supplies & non-critical items Static item and pricing information Approval controls for price changes Items not tightly controlled Accessed via punchout No Catalogs, “Smart” Forms One-time requests & services User-specified items Early stages of implementation Option Request Type Item Characteristics

Actual Catalog Implementations Source – Aberdeen Group, Dec ‘04

Other Areas of “Enablement”  Supplier profile management  Invoicing  Contractor time & expense tracking  Inbound logistics  Negotiations  Contract management  Supplier-managed inventory  Consignment  Design & prototype  Forecasting

Software vs. Services  Pure software – Oracle, SAP, legacy PeopleSoft, legacy Ariba  Pure services – D&B, Austin-Tetra, BearingPoint, etc.  Services w/supporting software – CC-Hubwoo, Saqqara, ATK, legacy FMKT, etc.  Software w/supporting services – Emptoris, Requisite, Ariba/FMKT, etc.

Panel Questions  What is supplier “content” beyond a product catalog?  What value-added services complement content?  What are “supplier networks” and where do they fit?  How does regional, vertical and commodity-specific content increase the ROI of procurement software?  Should regional content providers expand globally? How? What is the role of software / service partnerships?  What role will interoperability play in global expansion, especially for large, multi-national buying customers?  What are customers of procurement software requesting re supplier content?  What are customers of supplier content requesting re procurement software?