Patrick D. Quirk CEO, Emptoris

Inspiring Success in the Era of “Smart” IBM Emptoris

Strategic Supply Management

The past year… Economy

80% of CEOs are concerned

about uncertain economic

growth

Volatility 56% of CEOs said their operations were impacted by Euro-zone debt crisis

Risk 29% of CEOs

cited an impact from Japan's

earthquake and tsunami

Emerging Markets 50% of CEOs believe emerging economies are more important to their company’s future than developed markets

…has shaped the corporate agenda

Global growth and sustainable savings

Manage risk and compliance

Identify volatility and maximize predictability

Drive innovation

Meeting the Business Needs of Chief Procurement Officers

Chief Procurement Officers are challenged to: – Drive global growth and

sustainable savings – Manage risk and compliance – Identify volatility and maximize predictability – Maximize sourcing and fulfillment flexibility

Buy Adaptive

procurement and optimized

supply chain Procurement transformation requires a combination of best practices and

the right technology

What if you could deliver greater value?

99% of spend visibility achieved for customers on

average

99% 90% 11% 35%

90% of contracts under

management and compliance

11% average savings on total sourced spend

35% savings possible on

telecom expenses

$30B

$30 Billion in savings

documented in a survey

of our customers

Ability to: Analyze $1 Trillion

of spend

Ability to: Manage more

than 2.5M contracts

Ability to: Conduct more

than 25,000 eSourcing events

annually

Ability to: Seamlessly

manage $1.2B in telecom expenses

Ability to: Sustain savings

Era of “Smart” Forrester is beginning to characterize many of the

SVM-centric offerings as “smart process apps” due to the deep process, collaboration, analytics, and integration built into these solutions

By connecting the sourcing-life-cycle processes that are already taking place with these smart process apps, SVMOs can bootstrap themselves out of a transactional-effectiveness mode and into a strategic value driver role for the business

Source: The Forrester Wave™: SVM Tool Set, February 25, 2013

Procurement technologies drive innovative performance

Source: IBM Institute of Business Value

New value to inspire customer success People • 500 consultants

worldwide supported by 3,000 supply chain professionals

• Recognized by Gartner as BPO leader

Processes • Market leader in

Procurement Services

• Over $57B in managed spend

• Sourcing Councils supported by analytics

Technology

Our mission and our commitment to customer success

Delivering strategic supply and contract management solutions that enable our customers to maximize

financial performance and optimize commercial risk.

Challenge

Solution

Results

IBM success story

Transform the IBM procurement organization to become an essential corporate function. Standardize procurement best practices globally in an effort to reduce costs, generate revenue, increase customer satisfaction and drive supplier innovation and collaboration.

IBM Emptoris Strategic Supply Management IBM Cognos Procurement Analytics IBM ILOG Optimization

Realized savings of $7b savings in the last year Common global process and platform Comprehensive strategic sourcing agenda Spend compliance greater than 95% Integrated and automated approach to Business Unit Requirements, RFX,

Contracting, and transaction execution

IBM spends approximately $36.5 billion annually through its supply chain, procuring materials and services globally. The supply, manufacturing and logistics and customer

fulfillment operations are integrated in one operating unit that has optimized inventories

over time.

Customer Profile

“IBM’s platform utilizing Emptoris, Cognos, ILOG offers fast time to value by enabling predictive analytics. Organizations who

leverage this new technology will be the leaders in the next wave of procurement”

– John Paterson, CPO, IBM

Coming in May! IBM’s Institute for Business Value (IBV) will deliver its first ever…

http://www.ibm.com/services/c-suite/series-download.html

Global Chief Procurement

Officer Study

Contributor Demographics

19%

2%

79%

32%

8%8%

19%

33%

Survey Respondent Headquarters Region

Approximate Annual Revenue

1128 large, geographically diverse companies completed CPO survey, and one-on-one conversations with senior procurement leaders gave context to findings

12% of respondents hold the title ‘Chief Procurement Officer’, and 88% report directly to the CPO

Geographic representation from 22 countries and all industry sectors

One-on-one interviews conducted between December 2012 and February 2013 by IBM procurement specialists

Topics covered included procurement management metrics, procurement technologies, human resource challenges, best practices, and emerging procurement trends

12

$1bn to $10bn

$10bn to $100bn

Over $100bn

North America

Europe

Asia Pacific

Latin America

Middle East & Africa

Strategic Supply Management addressing client needs

Maximize and lock in savings with advanced sourcing and enterprise contract management capabilities

Analyze enterprise spend across systems and effectively source and manage complex categories

Effectively manage supplier information, relationships and processes to ensure compliance and mitigate risk

Enterprise and Category Spend Management Source to Contract Supplier Management,

Risk and Compliance

It’s all about ROI An Army of Solution Sellers: +200 people

utilizing the ROI model and business case template world wide.

A lot of value being found:

• Customer Loyalty has completed over 350 studies in 2.5 years.

• +30% of the Pro-forma (L1) studies move to L2 studies with heavy customer engagement

Accuracy, accuracy, accuracy: L1's are typically within 75% of the achievable value. Working with the customer to adjust moves accuracy to >90% of achievable value.

Recent examples of top brands utilizing the process: 3M Company AON Apple AT&T Cathay Pacific Airways Citigroup Florida Blue Frontier Communications Altria Group Qantas

Spend Management – Best In Class

Ease of Use Success Requires Adoption

Uncompromised Best in Class in Every Area

True Savings Identified & Realized

What does best of breed combination really mean?

Transaction Engine

Channel Spend Through Preferred Suppliers

Capture Savings & Ensure Compliance

Strategic Sourcing

Identify & Contract With Preferred Suppliers

Negotiate Savings & Favorable Terms

Coupa-Emptoris Solution

Back office “strategic” analysis

and negotiations Powerful analytics, sourcing

and contract processes Negotiate savings from

sourcing and contracting

Front office “procure to pay” offering Captures and controls your spend Realize savings from strategic initiatives

Analyze

Source

Create Contracts

Enforce Compliance

P2P

Coupa-Emptoris Solution POWERFUL PARTNERSHIP

INDUSTRY ACKNOWLEDGED LEADERS

COMPREHENSIVE SOLUTION ANALYTICS Dashboards Advanced reporting What-if analysis

SOURCING RFI, RFQ, RFP, Reverse Auction Bid Optimization Comparison charting

CONTRACTS Buy side – Sell side Approvals Redlining Authoring and negotiation

PROCURE–TO–PAY eProcurement Budgets Approvals Inventory CSN Taxes Freight AP/Invoicing Shopping Compliance T&E Transactional reporting

Analyze

Source

Create Contracts

Enforce Compliance

P2P

Coupa-Emptoris Solution

Out of the box integration Business processes mapped to

your requirements

POWERFUL PARTNERSHIP

INDUSTRY ACKNOWLEDGED LEADERS

COMPREHENSIVE SOLUTION

SEAMLESS, INTEGRATED WORKFLOW Analyze

Source

Create Contracts

Enforce Compliance

P2P

Joint Coupa & IBM Customers

You can’t afford NOT to get a better handle on your data

“The Year of the Supplier: Perspectives on Supplier Management in 2011”, published by Aberdeen, May 2011

“Nearly one third of respondents don’t know the costs related to supplier management disruptions.”

“44% of organizations don’t know or don’t measure supplier failure costs.”

“only 20% of organizations are tracking supplier corporate social responsibility.”

“supplier data residing in multiple systems”

systems “unable to manage the depth of supplier information being demanded”

You can’t afford NOT to have your forecasted savings materialize

“The State of Strategic Sourcing: Building a Context for the Next Decade”, published by Aberdeen, April 2011

Savings leakage

Off-contract spending and poor

contract management

Failure to accurately forecast and

understand business performance

Unexpected supplier price increases

Inconsistent supplier information • Due to multiple procurement and purchasing systems

Single supplier master record • Cross-referenced to source systems eliminates

duplication and confusion

No single supplier view • Due to unlinked data spread across multiple systems

Single supplier view • Provides information on performance, risk status,

spend, bids and contracts

Challenges Capabilities

Supplier data inaccuracy • Due to lack of data checking and cross-referencing

Supplier data governance • Ensures that supplier data is consistent and correct

Limited procurement insights • Due to data inaccuracies and lack of consistent

structure

Analytics • Across all procurement applications provides deep

procurement insights

Limited scope of suppl. programs • Due to manual processes for managing supplier

information

Process Automation • Improving productivity and increasing the number of

suppliers under management

Start buying smarter

Solutions to help you buy smarter

Emptoris Integration Services

Virtual Supply Master Technology Suppliers

Categories Events Users Organizations

Regions Bids

Program Management

Supplier Lifecycle

Management

Suite Reporting / e360

Spend Analysis

Sourcing Contract Management

Telecom Expense

Management

Services Procurement

Suppliers Users

Suppliers Users

What’s coming

IBM Portal and IBM Connections

for Social Business

Consistently recognized as a Leader by independent research firms

Market Leader

Leaders Quadrant

Gartner Telecom Expense

Management Magic Quadrant

2012

The Forrester WaveTM: Services

Procurement Q3 2010

Leaders Quadrant

Gartner Strategic Sourcing

Magic Quadrant 2010

Market Leader

Market Leader

The Forrester WaveTM:

Sourcing and Vendor

Management Q1 2013

The Forrester WaveTM: Contract

Life-Cycle Management Q2

2011

Leading Analyst Recognition

Thank You!