Building an eGovernment Procurement together

1. Buildingan eGovernmentProcurementtogether Natalia Parmenova Business Development Manager SAPMarkets Europe

2. What we would like to share with you today • What is the profile of SAPMarkets • Where we see the eMarketplaces business going • What solutions SAPMarkets provides to the clients • What lessons we have learned together with our partners in eMarketplace projects • How SAPMarkets can bring value to your eMarketplace

3. Corporate Profile • SAP AG spin-off • Headquarters in Palo Alto, California • Announced March 15, 2000 • Opened for business in May, 2000 • Employees: ~200 initially, ~400 by 2001 • SAP to retain majority control of SAPMarkets

4. SAPMarkets Regional Offices Walldorf - Development Center - Biz Development Europe Montreal - Development Center Bangalore - Development Center Palo Alto - Headquarters - Marketing - Development Center - Biz Development Americas Singapore - Biz Development Asia

5. Mission of SAPMarkets Develop, market and operatethe open business network of marketplaces.

6. Why Form SAPMarkets? • Focused, agile entity • World wide strength driven from Palo Alto at the heart of the Internet revolution • Leverage SAP ecosystem (customers, partners, service organization and sales force) • More than buying and selling (collaborative forecasting, dynamic pricing, RFP/RFQ matching, tendering, ...) • Leverage SAP’s existing industry knowledge • Draw on SAP’s integration knowledge

7. Where we see eMarketplaces business going

8. B2B e-commerce is evolving rapidly to address more complex business processes B2B eCommerce evolution trend Exchange-to-exchangeComplex Business Process Direct Goods and Services Trade Facilitation Trade Services E-MarketplacesBuying and SellingIndirect Goods and Service Point-to-Point ConnectionsDiscreet Applications

9. Marketplace Options A) B) n:m Marketplace (e.g. Exchange) Portal (e.g. B2C Sales - Mall) Federation Internal Marketplace (Integration Hub) D) C) 1:n Marketplace (e.g. Supply chain hub)

10. The New Landscape of Collaboration Enterprise Marketplace Consumer

11. Consumer Portals / Malls

12. Exchanges

13. Channel Master Marketplaces

14. Corporate Marketplaces

15. The New Landscape of Collaboration Enterprise Marketplace Consumer

16. e-Business Applications for On- and Off-Ramps On-/Off-Ramps

17. Syndication of Services 3rd party service provider

18. Single Access

19. What lessons we have learned together with our partners in eMarketplace projects

20. Automotive Aerospace Energy Chemicals & Pharmaceuticals Engineering Metals & Mining Consumer Products Global Utilities N. America Utilities Industry e-Marketplaces

21. Promises: Increase shareholder value Maximize liquidity Increase investor confidence Improve market efficiency Facts: Economic value of pure exchanges is unclear Applications create the value “Show me the money” attitude Observation 1: PR War Turns into Delivery War

22. Workplace eCom-merce CRM SCM BI ERP Marketplace Observation 2: Integration Continues To Be Key High Needed: • A business plan • Openness • Partners’components • Integration • Common messaging semantics Short term fix:Buy/build tactically A real plan: Integration Architecture Strategic nature of integration Hackers heaven Go to the lab: ? Low High Time before plan changes

23. Observation 3: Applications Become Services A) Components migrateonto marketplaces: • Serve multiple companies • Hosted • Ubiquitous • Personalized • Partner software built-in • Integrated with back-end • Scalability, performance,availability and security B) • Supply Chain Optimization • MRO Procurement • Direct Procurement • Planning and Optimizing • Analysis • Relationship Management • Sales • Service • Marketing

24. Observation 4: Revenue models impact service offerings eMarketplace revenue streams will evolve from transaction to value-added services Current focus is on driving transactions to generate revenue for exchange Over time, value-added services revenue will become dominant revenue source Revenue Transaction revenue Value added service revenue Time

25. Success stories of today

26. Success Story: ec4ec • Buyer / supplier involvement in business & service roadmap planning • Long-term service offering planning (18 months time horizon) • Business plan: 5 year horizon • Distinctive value proposition: • Collaboration between engineers, purchasers and suppliers in creating and procuring complex components • Reduced time-to-market, therefore, lower process costs • Simple, fast and cost-effective solution

27. Success Story: CPGmarket • Industry issues oriented • Speed of services offering • Active marketing by all founder-participants • Third-party services • Value proposition: • potential for cost reductions for sellers and buyers by sharing a technical platform and infrastructure, decreasing procurement cost, reducing the time taken to source products and services • shared planning services to reduce supply chain costs • tailored information to potentially exploit new opportunities

28. Success Story: EMARO • Differentiation points • Seamless integration of business processes through the marketplace • User oriented Catalog Mgt to enable flexible and comprehensive product offering • Value proposition • Lower Transaction costs • Reduced M&S costs for seller • Lower prices for buyers • Why to select SAP / SAPMarkets / Commerce One? • Availability of solution • One-stop shopping & strong integration of services & to back-end systems • Strong partnership between SAPMarkets / SAP AG and Deutsche Bank • Strong partnership for service extension, business development and sales support

29. Success Story: hubwoo • Addressing Europe and building strong partnership with other regional marketplaces in USA and Asia • Focusing on large buyers (> 200 Mio € revenues) • eProcurement, Reporting, Benchmarking, Logistics, Transportations • 3rd party: Financial services • Lessons learned / experiences: Provide standard solution based on SAP standards

30. So, all in all, what have we learned? • Business modelling is a key for proving the validity of the ideas • Rapid deployment coupled with sound service offering road map is a key for attracting participants • Differentiating your value proposition is a key for getting the traffic quickly • Long-term partnerships help to built confidence

31. What solutions SAPMarkets provides to the clients

32. Component Architecture MarketSet Buyer On-Ramps Seller On-Ramps MarketSet Builder Browser Browser Enterprise Buyer Desktop / Professional SAP Internet Sales / SAP Customer Relationship Mgmt MarketSet Services Framework SAP Materials Management / SAP Financials / SAP Document Mgmt System MarketSet Procurement MarketSet Order Management MarketSet Dynamic Pricing SAP Online Store / SAP Sales & Distribution / SAP Financials / SAP Document Mgmt System MarketSet Connector MarketSet Connector MarketSet Catalog MarketSet Life-Cycle Collaboration MarketSet Supply Chain Collaboration SAP Advanced Planner & Optimizer SAP Advanced Planner & Optimizer MarketSet Bulletin Board MarketSet Analytics (further to come….) xCBL xCBL 3rd Party Components Oracle, PeopleSoft, i2, Ariba, etc. 3rd Party Components Oracle, PeopleSoft, i2, Ariba, etc. MarketSet Platform Marketplaces SAP, GTW, dotcoms, etc. Transport Service Provider Export/Import Service Provider Financial Service Provider Marketplaces SAP, GTW, dotcoms, etc.

33. MarketSet Builder MarketSet Services Framework MarketSet MarketSet MarketSet Order Dynamic Procurement Management Pricing MarketSet MarketSet MarketSet Life - Cycle Supply Chain Catalog Collaboration Collaboration MarketSet MarketSet (further to Bulletin Analytics come….) Board MarketSet Platform Architecture MarketSet Builder Create the front-facing marketplace experience: • User Interface builder for HTML and mobile services • Community features and services • Role based & user driven personalization features • Trading Partner Directory MarketSet Services Framework Framework for rapid integration of marketplace services: • Pre-packaged components for seamless integration of bundled, premium and third-party services MarketSet Platform Basic infrastructure on which marketplaces are built: • Trading partner connectivity through xCBL • Document message routing and transaction processing • EDI and RosettaNet gateway support • Administration console for process management • Marketplace and transaction security and Single Sign On

34. MarketSet Builder MarketSet Services Framework MarketSet MarketSet MarketSet Order Dynamic Procurement Management Pricing MarketSet MarketSet MarketSet Life - Cycle Supply Chain Catalog Collaboration Collaboration MarketSet MarketSet (further to Bulletin Analytics come….) Board MarketSet Platform Architecture - Builder MarketSet Builder Front-facing marketplace experience: • User Interface builder for HTML and Mobile services • Based on Jetspeed rendering engine • HTML input as well as XML • Integration to SAP’s workplace business content • Community features and services • Personalization features Help market makers create a community • Templates • System for user/policy management • Role-based and user-based personalization • Methods for trading partner registration & user login

35. MarketSet Builder MarketSet Services Framework MarketSet MarketSet MarketSet Order Dynamic Procurement Management Pricing MarketSet MarketSet MarketSet Life - Cycle Supply Chain Catalog Collaboration Collaboration MarketSet MarketSet (further to Bulletin Analytics come….) Board MarketSet Platform Architecture – Service Framework MarketSet Services Framework Rapid integration of services • Pre-packaged components for seamless integration of bundled, premium and third-party services • Software tools, APIs, documentation, and methodologies for integrating services • Documented in Business Service Framework (BSF) Cookbook Native support for xCBL • xCBL = XML Common Business Library -> http://www.xcbl.org/ • Document framework for robust XML exchange

36. MarketSet Builder MarketSet Services Framework MarketSet MarketSet MarketSet Order Dynamic Procurement Management Pricing MarketSet MarketSet MarketSet Life - Cycle Supply Chain Catalog Collaboration Collaboration MarketSet MarketSet (further to Bulletin Analytics come….) Board MarketSet Platform Architecture - Platform MarketSet Platform Security • Marketplace security • Secure document message routing • SAP Trust Center services integration Connectivity • Establish xCBL communication points for trading partners • Integration of SAP applications via MarketSet Connector • EDI gateway for transaction services and supplier integration • RosettaNet gateway support Management • Administration console • Marketplace management • Performance tuning

37. MarketSet MarketSet Builder MarketSet Services Framework Market Buyer Bulletin Board Dynamic Pricing Order Mgmt. Planning Services Design Services Analysis Services Catalog Services Logistics Services Financial Services Trade Services … MarketSet Platform Marketplace Services on demand People acting in roles (purchaser, employee), participating in business scenarios Marketplace front end (role based, personal user interface with access to marketplace services & application, set of html/XML templates) MarketSet Builder User Management Marketplace Services (hosted Services provided by Marketplace) eProcurement Analysis Order Management eCatalogue Collaborative Design Collaborative Planning Marketplace Platform MP Performance Management Market Connect Security

38. SAP Internet Sales Enterprise Buyer Pro ITS User Interface Community Services EBP/CRM Internet Sales/CRM Requisite Business Service Mgmt Jetspeed IPC ITS Trading Partner Mgt. Cocoon Dr. Fuzzy User Mgmt / Security Search Communities Enterprise Buyer Desk Buysite MarketSet OM MarketSet Procurement MarketSet Bulletin Board MarketSet DP CRM EBP/CRM BB DPE Security Package Security Package Websphere Websphere ITS Security Package Security Package XDK Pro XDK Pro SAP R/3 SAP APO MarketSet SCC MarketSet LC MarketSet Analytics MarketSet Catalog SD APO APO PLM BW Content Engine FI Live Cache Live Cache Live Cache ITS iMerge DMS ITS ITS KPro Online Store SAP APO ITS APO SAP R/3 MarketSet Info Services Live Cache MM News Feed ITS FI Advertisement Feed DMS MarketSet Connect MarketSet Connect SonicMQ SonicMQ 3rd Party XDK Pro XDK Pro Data Storage Mapping Mapping 3rd Party DBs “Oracle, PeopleSof,..etc” LDAP Transformation Transformation Legacy Oracle, PeopleSoft,..etc Legacy BC Mapping XDK Pro MarketSet Architecture – Logical Diagram Buy Side On Ramps Marketplace Sell Side On Ramps MarketSet Builder Browser Browser MarketSet Service Framework Marketplaces Logistic Service Financial Service Trade Service MarketSet Platform Marketplaces Portal Router Multicast PDC* CCMS SonicMQ Transformation BDC* Foglight XPC Round Trip Firewall* Tracking Load Balancer* *not part of MarketSet Delivery

39. What is Collaborative Business Scenario

40. Participant Participant Participant Activity Activity Activity Activity Activity Activity Activity Activity Activity What is a Collaborative Business Scenario? Collaborative Business Scenarios • Are business processes that transcend the borders of individual enterprises • Involve multiple parties and people with defined activities and roles • Span multiple IT environments and systems • Make use of internet technology and services • Can take place on marketplaces and hubs

41. Rules of Drawing Active form is used for actions done by a user. Passive form is used for actions done automatically by the system Color Key Action done by buyer Column Key Action done by seller Functionality of buyer´s backend system Buyer Marketplace Seller Action done by market place Functionality of Enterprise Buyer Includes also Market Buyer and Order Management Functionality of MarketSet Functionality of Internet Sales or Online Store xCBL, SAP XML Software behind firewall of buyer, which allows access to marketplace Functionality of seller´s backend system Data passed via standard market place interface Other standard interface Software behind firewall of seller, which allows access to marketplace Application component

42. m : n m : 1 : n Participant Participant Participant Participant Participant Participant Participant Participant Participant Participant Participant Participant Marketplace Introducing the Marketplace

43. Applications follow Processes Inter-Enterprise Collaborative Applicationson Marketplace Processes Applications Marketplace Backend Backend Backend Backend

44. RFx Process Initiator Marketplace Respondent Need for RFx Need for Business ... Prepare Engineering Documents Create RFx Receive RFx Backend Backend ... Bulletin Board Prepare Engineering Documents Review bids and select winner Create Bid ... ...

45. Request for Information Buyer Marketplace Product / product group is specified Seller Select supplier sub-set DP Submit Read invitation (with link to RFI) DP TPD RFI is published in Bulletin Board DP Email system Read notification Provide information BB Email system DP Update trading partner directory No automatic update of TPD so far TPD

46. Detail: Request for Quotation with DP (public) Define product specifics Buyer Marketplace Seller Specify RFQ DP Submit DP RFQ is published in Bulletin Board DP Request for registration BB Update trading partner directory TPD Read notification Make bid TPD Select winner(s) Read notification Email system DP Send out opportunity result or convert to reverse auction DP Email system DP

47. Detail: Request for Quotation with DP (non-public) Define product specifics Buyer Marketplace Seller Specify RFQ DP Select supplier sub-set DP Submit Read invitation (with link to RFQ) DP TPD Read notification Make bid DP Email system RFQ follow-up Email system DP Select winner(s) Read notification DP Send out opportunity result or convert to reverse auction DP Email system DP

48. Dynamic Pricing Example: Auction for Obsolete Equipment Initiator ABC Inc. Respondent XYZ Inc. Identify obsolete equipment Identify need for equipment Select saleschannel: Auction Select supply channel: Auction Marketplace HTML XML Create quotation Find auction and bid on auction ERP Backend ERP Backend HTML eMail Review bids and select winner Selected as winner of auction Auction XML XML Createsales order Createpurchase order Fulfillment and billing Receipt & payment

49. BBP - Bid Invitation Dynamic Pricing RFP/RFQ Delivery Note Asset retirement Exchanges Business Applications Auctions Bulletin Board Marketplace BULLETIN BOARD

50. Detail: Reverse Auction Specify product Buyer Marketplace Seller Specify auction DP Select supplier sub-set DP Submit Read invitation (with link to auction) DP TPD Auction is published in Bulletin Board DP Email system Make bid BB View best bid and make new bid DP Close auction and send out opportunity result DP DP