Sap Overview

SAP’s Approach to Sourcing and Procurement Strategies in Today’s Economy;

MARKET

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Global Trends are Driving Change in Procurement Practices

Economic Downturn Focus on Efficiency

Globalization

Sustainability

Increased Focus on Costs

New approaches to savings Pressure to increase spend visibility and management

Growing Supplier Risk

Supply base becoming more global Need to effectively manage risk and provide insights

Importance of Governance

Increased pressure on sustainability objectives New regional and global regulations

Demand for Rapid Productivity

Employees requiring intuitive self services Focus on automated and integrated processes

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In this market, my focus must be on delivering reduced costs.

Maximize sustainable cost savings Optimize contracts and enforce sustainability KPIs Manage suppliers’ performance and information Deliver rapid time to value

© SAP 2010/ Page 4

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ISSUES

© SAP 2009 / Page 5 2010/ Page 5

KEY

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Inefficient Source-to-Pay Processes

Result in High Costs

High Costs Lack of centralized information; transparency into demand, current spend, and costs

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R&D Plant B Plant A

Subsidiary XYZ

Ineffective Governance and Compliance Lack of ability to enforce processes, contracts, sustainability goals and other core KPIs

CPO

Corporate

PROCUREMENT

Direct Materials

A/P Finance East Region Services

Slow Time to Value Gradual innovation and adoption Lengthy deployment times Limited to no process and or data integration to ERP

Indirect Goods

Poor Supplier Risk Management Inability to monitor and reduce supplier risk, monitor supplier performance and drive improvements

Slow Productivity Increases Non-standardized processes, poor user adoption and disparate systems

© SAP 2010/ Page 6

Best-In-Class Procurement Organizations

Significance Difference Between Top Performing Companies and Other Companies

Effectiveness: Spend Under Return on Assets...