Chandra Yeleshwarapu and Rick Collison Ariba Procurement Solutions What's New, What's Coming, Best Practices Chandra Yeleshwarapu and Rick Collison © 2011 Ariba, Inc. All rights reserved.

Agenda Procurement State of the Union Summary and Q&A What’s New Procure to Pay and Procure to Order Procurement Content Services Procurement What’s Coming Product Roadmap Vision Summary and Q&A © 2011 Ariba, Inc. All rights reserved.

Economy Scorecard Rate of change is increasing © 2011 Ariba, Inc. All rights reserved.

Renegotiate Contracts Responding to Changing Market CPO Priority: Focus on spend management outcomes Top Drivers Top Priorities Risk and Compliance Conserve Cash 1 Renegotiate Contracts 1 Cash flow focus 2 Supply Risk 2 Tight budgets 3 Spend Mgmt Effectiveness 3 Slower Investment © 2011 Ariba, Inc. All rights reserved. 4

The CPO Situation Normal channels have less to give Drive more savings You are here What are your top business drivers in 2011? “Can you give me some shade?” Ariba / ISM (Institute for Supply Management) Survey conducted February 23, 2011 5 © 2011 Ariba, Inc. All rights reserved.

The Business Commerce Problem… Investments Inefficiencies Remain Between Companies ERP or Niche ERP Source Procure Pay Buyer Wasted time and resource Lost negotiation history Poor visibility into compliance Manual ad hoc collaboration Delayed payment; Cash “mis-mgmt” Limited visibility and risk Sell Fulfill Invoice & Collect Seller CRM Order Mgmt. ERP Average number of trading partners: 134,500 (Source: Forbes Global 2000) Transactions completed manually: 80% (Source: Celent Communications) Paper-based invoices and payments: 85% (Aite Group: Global Cash Management: Going Green. 2009) Costs of ineffective collaboration: $650 Billion (Source: Basex Research- “Information Overload” Feb, 2008) Inefficient Commerce Collaboration is Costing G2000 $338 Billion (Source: Ariba Benchmarking) © 2011 Ariba, Inc. All rights reserved.

The Impact on Procurement Challenges Business Impact Poor control of spend Poor visibility into what is being spent and with which vendor Lack of standardization across business units and geographies High maverick spend Spend not compliant with negotiated terms Poor visibility and management by post-spend auditing Failure to meet commitments increases risks and costs Multiple contracts and terms with the same vendors Duplicate processes and global disparities The new normal drives some universal challenges in Services Procurement. These impact the business in reduced productivity, loss of control resulting in high maverick spend, poor spend visibility leading to ineffective sourcing and higher prices. And of course increased risk around failure to meet commitments as well as legal conflicts. How does your organization view these? 7 © 2011 Ariba, Inc. All rights reserved. 7

Efficiency Prize in Procurement What are your targets for improving P2P processing costs within the next two years: Source: Defining and expanding the value proposition of P2P survey, ISM, Forrester, Ariba; February 2011; relative population sample. 8 © 2011 Ariba, Inc. All rights reserved.

The Approach: Holistic What is your top Procurement initiative for 2011? Better processes and automation Multi-year strategic plan with enterprise goals Internal and external collaboration Compliance Training & investment Source: Defining and expanding the value proposition of P2P survey, ISM, Forrester, Ariba; February 2011. Entire registrant population of 1,137. 9 © 2011 Ariba, Inc. All rights reserved.

Procurement Business Process e-Procurement © 2011 Ariba, Inc. All rights reserved. 10

Solution Ariba Commerce Cloud BUY MANAGE CASH SELL TECHNOLOGY Applications Spend Mgmt. | Collaborative Finance Mgmt. | Sales Acceleration Mgmt. Platform Analytics | Security | Performance | Integration | Mobility COMMUNITY Peer Collaboration World’s Largest Trading Network Partner Ecosystem CAPABILITIES Domain Expertise Value Enablement Execution Support © 2011 Ariba, Inc. All rights reserved. 11

Ariba Procurement: Compliance, Collaboration, Visibility Supplier Network Ordering Approval Fulfillment Receive Reconcile Settle Contract Source Control goods, services, across all ERP’s: Require ERP receipt or payment: Compliant ERP Ordering: Automate AP: Up to 80% of spend is Services: Recapture Savings Leakage: Supplier, Price, Term Improved Processes and Visibility Lower resource needs: short- and long-term across all ERPs Flexible many-to-many networking = long-term system efficiency Allows for strategic cash management Proven value Why It Matters: © 2011 Ariba, Inc. All rights reserved.

Collaboration on the Network is the Key “We feel the system is beneficial from the upfront control process. We also think the system is very easy to use. It's intuitive and our users have been able to adopt it quickly.” Bob Fair, Director of Global Procurement Operations McGraw Hill ERP ARIBA NETWORK Supplier Buyer Sourcer Mgr  Any Buyer  Any Supplier  Any ERP  Total Process Control 13 © 2011 Ariba, Inc. All rights reserved.

Comprehensive Spend Management Service Indirect Supplier on Boarding Time and Labor Payments Catalog Management Source to Procure Bids and Auction Direct Plan to Procure Capacity Constraints & Sourcing Splits Extended Enterprise – On Time Delivery Direct Commodities & Options © 2011 Ariba, Inc. All rights reserved.

Best Practice - Procurement 2011 Process Efficiency Hyper Collaboration and Usability Expand Spend Categories under process control Spend Visibility Control contract leakages and identify the savings Supply Risk Management Use the Ariba Cloud Commerce, Expand spend categories and implement across geographies © 2011 Ariba, Inc. All rights reserved.

© 2011 Ariba, Inc. All rights reserved. What’s New © 2011 Ariba, Inc. All rights reserved.

Disciplined Innovation Approach Combining all customer experience into the journey Feature surveys connect.ariba.com On-site customer visits Advisory councils and user groups Early access programs and design partnerships Functionality and usability testing On-Demand Releases Common Code Line 9s5 10s1 10s2 Future Releases © 2011 Ariba, Inc. All rights reserved.

Thanks for Making Ariba the Leader Ariba Procurement Leader © 2011 Ariba, Inc. All rights reserved.

What’s new in Procurement? Theme – Process Efficiency and Usability Procure to Pay Determine Account Type by Item Price Denial by Approver in Parallel Chain Mass edit of Partial Items Support Flexfields in Receipt Import Reporting - Accounting Contract facts Respect User ship to and Deliver to in requisitions New Language support – Swedish, Dutch, Danish, Norwegian Procurement Content SRM 7 Certification Catalog Self Service Services Procurement Collaborative Requisitioning © 2011 Ariba, Inc. All rights reserved. 19

Determine Account Type by Item Price 10s2 SP1, P2P, P2O Determine Account Type by Item Price We support determining account type based on commodity and the spend This enhancement allows users to determine the account type by price of the commodity Example Requisition Item per unit price = $10 Quantity = 500 Account Type Policy Spend ≤ $1,000  Expense Account Spend > $1,000  Capex Account Since spend is $5000, it will be Capex Account Account Type Policy Price ≤ $500  Expense Account Price > $500  Capex Account Since price is $10, it will be Expense Account © 2011 Ariba, Inc. All rights reserved.

Denial by an Approver in Parallel Chain 10s2 SP1, P2P, P2O Denial by an Approver in Parallel Chain Earlier, even if Archie denied the requisition, Gene could approve the requisition without knowing that Archie had already denied it The requisition was eventually denied Now, the approver in the parallel chain cannot approve this requisition © 2011 Ariba, Inc. All rights reserved.

Denial by an Approver in Parallel Chain 10s2 SP1, P2P, P2O Denial by an Approver in Parallel Chain If Gene tries to approve the requisition after Archie denies it © 2011 Ariba, Inc. All rights reserved.

Catalog Self Service – 1 of 2 Description Ability for buyer and supplier to manage catalogs in a self service mode Features Complete self service in enabling and maintaining catalogs Buyers Self service to set up catalog validation rules Support for supplier specific rules Rule Engine Load catalog default rules Create, modify and save new rules Validate catalogs against the defined rules set Identify and display errors in catalog to both suppliers and buyers Communicate error status via email Suppliers View and download catalog validation rules View and correct catalog errors Do catalog comparison © 2011 Ariba, Inc. All rights reserved. 23 23

Catalog Self Service – 2 of 2 Description Ability for the buyer and supplier to manage catalogs in a self service mode Benefits Buyers Reduce cycle time. Faster catalog enablement. Lower enablement \ maintenance costs by reducing manual steps Enabling more catalogs Suppliers Reducing time and cost to enable catalogs Increased visibility and transparency Increasing catalog coverage > More transactions Examples Loading catalogs with rules to check. Required fields filled in (Price, Classification Code, UOM, Lead Time Supplier specific check on (Classification code range 4312****, Lead time < 10days & UOM = EA) © 2011 Ariba, Inc. All rights reserved. 24 24

Catalog Self Service New Process 2 Load CIF Enriched CIF File Buyer Normalized Yes © 2011 Ariba, Inc. All rights reserved.

Catalog Self Service – Use Case Catalog validation rules definition (Buyer) Set up catalog validation rules All Suppliers (Green \ Hazardous \ UOM) Supplier Specific Rules (Classification Code \ Expiration Date \ Lead Time) Download rules & create catalog file (Supplier) View and download catalog validation rules Prepare and load catalog file through Network account Catalog Validation (Catalog Self Service Engine) Synchronize catalog with buyer instance Validation of catalog and error reporting (field, line wise) Error correction and republish catalog (Supplier) Email notification on errors View errors online and correct catalog file Publish new catalog version Publish catalog (Buyer) Email notification on catalog load View and validation. Catalog difference report. Approval and publish to end users Catalog Status update (Supplier) Online update of catalog status Published Pending Validated Approved Activated © 2011 Ariba, Inc. All rights reserved.

Collaborative Requisitioning Description Ability for the buyer to collaborate with suppliers on all requisition types Features Extends collaboration to catalog and non catalog items (deployed on P2P, P2O, APC) Can enforce X Bids and a Buy on any type of requisition (deployed on P2P, P2O, APC, Services Procurement) Quick Enablement Collaboration Request Benefits Buyer can negotiation with supplier on any type of requisition, X bids and a buy can be enforced Suppliers no longer need to be on the AN to receive a Collaboration Request Examples Buyer has a standard catalog item (Widgets at $10 a unit) from Supplier XYZ. They can collaborate with Supplier XYZ and 2 other suppliers on this item to see if the supplier has the item in stock and to negotiate a lower price. © 2011 Ariba, Inc. All rights reserved.

Procurement Track Overview Sr. No Title Presenter Time 1. Collaborative Procurement Cathal O’Sullivan Monday April 11 4:45 to 6:00 2. Ariba Procure to Pay and Procure to Order Sybel Bevington Tuesday April 12 1:30 to 2:45 3. Ariba Payment and Invoice Management Chris Chase 3:15 to 4:30 4. Ariba Network Order Management Achim Voermanek 5. Ariba Supplier enablement Olaf Schrader 6. Best in class approval rules Leslie Martensen 7. Ariba procurement content and catalog management Dawn Fischer 28 © 2011 Ariba, Inc. All rights reserved. © 2011 Ariba, Inc. All rights reserved.

© 2011 Ariba, Inc. All rights reserved. What’s Coming © 2011 Ariba, Inc. All rights reserved.

Ariba’s New Release Model Guiding Principles Decouple App releases Allows focused engineering execution by solution area. Independent Platform Development Minimizes quality risk of simultaneously changing all layers in the architecture Focus on Readiness Explicit focus on readiness tailored by solution Quarterly Drumbeat Predictable schedule for bringing innovation to the market © 2011 Ariba, Inc. All rights reserved.

(Spend Vis, Sourcing, SIPM, Contracts) (Procurement & Invoicing) Ariba’s Future Release Vision More improvements behind the scenes “Cloud Cadence” 11s - Series 12s - Series 13s - Series 11s1 (Spend Vis, Sourcing, SIPM, Contracts) 12s1 13s1 14s1 11s2 (Procurement & Invoicing) 12s2 13s2 14s2 11s3 (Ariba Network) 12s3 13s3 14s3 31 © 2011 Ariba, Inc. All rights reserved.

What’s coming in Procurement? Theme – Network & Usability Procure to Pay Enhanced accounting information in contracts Improved Budget Management Improved e-mail notification Enforce Minimum and Maximum order size from contract Handle Old and hanging POs Adhoc shipping address in user profile Improve Operational Reporting Procurement Content Catalog Search Catalog Reporting Services Procurement Enhanced Contingent Labor operational reports Time Sheet Supplier upload © 2011 Ariba, Inc. All rights reserved. 32

How to Get Involved and Influence Direction Get involved on ariba.exchange.com In addition to User Groups, other forums include venues such as our Advisory Council, customer surveys, beta programs and design partnerships, and functionality and usability testing Get involved in the early access program before each release Volunteer to provide feedback to the Solution Manager for your product © 2011 Ariba, Inc. All rights reserved.

© 2011 Ariba, Inc. All rights reserved. Vision Discussion © 2011 Ariba, Inc. All rights reserved.

Trends Data explosion requires new navigation paradigm Consumer technology trends impact the way business is done Procurement organizations have myriad operational models © 2011 Ariba, Inc. All rights reserved.

#1 Data Management and Retrieval Enterprise Data Growth & Enterprise Search Data Explosion Skimming the Surface © 2011 Ariba, Inc. All rights reserved. 36

Information Maze Where is it? Access? Relevance? Rich and actionable? Find the Information Go right then left and then right, then left ….. Take decision based on inadequate data …… Where is it? Desktop Intranet Internet Access? Security Navigation Relevance? Role Context Rich and actionable? © 2011 Ariba, Inc. All rights reserved. 37

# 2 Consumer Technology Trends Are Changing the Way Business Is Done Networking Communication Mobile Computing Matching Services Access to Content Then Now Trade shows vs. Social Networking (letters/post cards vs. Facebook) Communication (Phone vs. Smartphone) Looking for services: (Yellow Page vs. Service Magic) Mobile computing (Standalone Wi-Fi cards vs. Intel Centrino) Access to Info (Newspaper vs. Consumer generated content) Broader access to data Social networking going mainstream Increased collaboration between companies Information provided contextually © 2011 Ariba, Inc. All rights reserved.

Solution: Enterprise Search & Collaboration Internal Extended Enterprise Outside World Multiple Sources Distributed Information © 2011 Ariba, Inc. All rights reserved. 39

# 3 Trends in Procurement Emerging models need Flexibility in Procurement Integration Extensions Deployment © 2011 Ariba, Inc. All rights reserved.

Solution: Flexibility & P2P Automation Business Process Automation Direct Spend, Service Spend Invoicing and reconciliation Contract and terms Overlay With Network & Collaboration Social Network and collaboration Network Operations Add on Functions Ease of Integration with legacy applications © 2011 Ariba, Inc. All rights reserved.

In Summary Focus on process efficiency Collaboration is the key to process efficiency Use the Ariba Cloud Commerce, Expand spend categories and expand to other geographies Hyper Collaboration and Usability Ariba is committed to improving solution usability and process efficiency Control contract leakages and identify the savings Expand Spend Categories under control © 2011 Ariba, Inc. All rights reserved.

Questions © 2011 Ariba, Inc. All rights reserved.

“Safe Harbor” Statement This information reflects the status of Ariba solution planning as of April 2011. All such information is the Confidential Information of Ariba (per the contract between our companies), and must not be further disclosed, as stated in the confidentiality clause of that contract. This presentation contains only intended guidance and is not binding upon Ariba to any particular course of business, product strategy, and/or development. Its content is subject to change without notice. Ariba assumes no responsibility for errors or omissions in this document. Ariba 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. © 2011 Ariba, Inc. All rights reserved.

Chandra Yeleshwarapu and Rick Collison Ariba Procurement Solutions What's New, What's Coming, Best Practices Chandra Yeleshwarapu and Rick Collison © 2011 Ariba, Inc. All rights reserved.