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

© 2012 Ariba, Inc. All rights reserved.

Ariba Network Best Practices

Defining the Buyer Compliance PolicyLeigh Tangretti, Director Network Services

© 2012 Ariba, Inc. All rights reserved. 2

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

3

Specialize and Sustain Capture More Complex Areas

Expand and EnableIncrease Adoption

Pro

cess

Mat

urity

(Le

arn

ing

& C

olla

bo

ratio

n)

Hi

Low Hi

Launch and LeverageGet Early Savings and Organizational Wins

Adoption(technology/automation)

Phase3

Phase3

Phase2

Phase2

Phase1

Phase1

The Path to Best-in-Class is a Journey


Agenda





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

Strength of Policy

% Targeted Suppliers Transacting on the Network

Weak Policy: No Internal

Communication Optional Participation No Deadline No Consequence Inconsistent No NCE Process

Moderate Policy: Internal Awareness Expectation Set Deadline Incentive No Consequence

20% 40% 60% 80%

Best In Class: Internal Buy-In Expectation Embedded Mandatory Deadline NCE Process in place Incentive/Consequence

Net 60 $25 paper fee No paper

A strong Compliance Policy will result in more suppliers transacting electronically


Agenda





What is the Buyer Compliance Policy?

The governing policy by which a Buyer manages their Collaborative

Commerce program.


EDICT Designed to define the policy

CommunicationInternal and external

communication materials to educate on the policy

Non-Compliant ProcessBuyer defined seller escalation path for sellers not supporting

the policy

Defining the EDICT


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


E •EXPECTATION•Inform suppliers of the project and what you want them to do





Dear Seller,

Your participation in this program is required…..

Defining the EDICT







Dear Seller,

Completion of Ariba registration is expected by November 12, 2012.

Registration on the Ariba Network must be completed within 2 weeks of receiving the Relationship Request Letter.

Paper, Email, Fax transactions will cease as of November 12, 2012.

Defining the EDICT







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







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







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.



Commerce program.






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, Email, 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


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



Commerce program.






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

Vendor Name Vendor ID Supplier ANID Status Reason Comments

Terms of Use

Accepted

Trading Relationship

Accepted

Vendor Contact First

Name

Vendor Contact Last

NameVendor Contact

Phone

Acme Corp 414412 AN01234567890Supplier declined participation

5 Jan MV: Spoke to Ana at Ext. 208;She said they will not participate without new business. No No Ana (212) 555-5555

Widgets R Us 400345 AN213419836152Supplier declined participation due to fees

13 Dec MV: Spoke to John; He said he would not pay the SMP fees Yes No John Smith

Don's Tree Service 418901 AN19816100012 Invalid contact information

19 Jan MV: Cannot locate Don's Tree Service; Phone number is invalid Yes No (404) 777-9311

Best Practice is to resolve On Hold status relationships within 10

business days

25

NCE Tracking Process

# Supplier Name Supplier ANIDSupplier

Vendor ID NCE Date On Hold Reason

Date NCE Response

SentCount of

EscalationsDate

Escalated

Date of Escalation Response NCE Status Notes

1 Acme Corp AN01234567890 414412 1/5/2011 Supplier declined participation 1/8/2011 1 In Progres Conference Called scheduled for 1/21/11

2 Widgets R Us AN213419836152 400345 12/13/2010Supplier declined participation due to fees 12/15/2010 3 1/15/2011 Escalated Called Procurement Manager to intervene

3 Don's Tree Service AN19816100012 418901 1/19/2011 Invalid contact information 1 New

26

Supplier Enablement NCE ProcessEnablement NCE Process

Buy

er

Ari

ba

Bu

yer

N

CE

Co

nta

ct

Bu

yer

S

tak

eh

old

ers

Su

pp

lier

Supplier resists enablement

request

Is supplier still Active?

NCE Contact escalates to key Procurement/SC

resource for support

Process complete

Procurement/SC engages with

supplier

NCE contact shares result of interaction with

Ariba

Process complete

Ariba escalates supplier to NCE

contact, with reason code

NCE Contact sends appropriate

response based on reason code and

copies Ariba

Ariba sets supplier status to “Closed”

and assigns appropriate Status

reason

Supplier registers?

Procurement/SC reports results of

supplier interaction to NCE Contact

Yes

No

No

Ariba escalates supplier to NCE

contact, with reason code

Yes

Ariba reengages with

supplier

Ariba reengages with

supplier

Yes


Agenda





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. Ariba Network Best Practices Defining the Buyer Compliance Policy Leigh Tangretti, Director Network Services.

Documents

compliance policy slide

strong compliance policy

governing policy

policy communication

journey slide

enablement d deadline

deadline date

ariba network best practices