The Business Case for AP Automation

Speakers Ariba Host: James Tucker Panelists Samantha Haynes, Sr. Vice President, BB&T Diane Greenhaw, VP of AP, Regions Bank Belinda Cordina, Director of Procurement, Nalco © 2011 Ariba, Inc. All rights reserved.

Benchmark © 2011 Ariba, Inc. All rights reserved. Key Performance Indicators (KPIs) Laggards/ Average Best- In-Class % of Paper Invoices 90% 10% % of PO invoices to total invoices received 66% 82% First Pass invoice matching rate 70% 95% # of invoices per AP FTE 11K 40K Cost per invoice $11.03 $1.90 Days to process invoice and schedule to pay 16 3 % of discounts captured 52% 100% % of discounted spend 3% 15% % of suppliers with discount terms 1% 20% Contract Leakage as a % of Spend 2% 0.1% % of paper checks / payments 75% 67% 70% Cost Reduction $2M in Discounts per $1B $9M+ Savings per $1B

Savings Levers to Help You Build a Better Business Case $15 Million in working capital impact for every $1 Billion in Spend © 2011 Ariba, Inc. All rights reserved. available resources 3-for-1 “ “ 70% Cost Take Out “ “ 3-for-1 “ “ 9-for-1 “ “ © 2011 Ariba, Inc. All rights reserved. CHALLENGE OPPORTUNITY Process 70% of cost take out as a result of process automation and paper elimination Discounts $3 Million in discount savings for every $1 Billion in discountable spend Compliance $9 Million in contract leakage savings for every $1 Billion in spend under contract Working Capital $3 Million in working capital impact for 1 days of payables extension (DPO) on every $1 Billion in spend

BB&T Organization BB&T Corporation is the 10 th largest financial holding company, with $157.1 billion in assets 1,800 financial centers Enterprise Spend Management reporting to CFO within the Financial Management Division Business Case presented to Executive Management for creation of a Shared Services Organization and Spend Management Platform Business Process Manager – Support for Ariba Platform Number of Suppliers 30,000+ Suppliers Transacting via Ariba 5,000+ Annual Spend $1.2B Annual Sourceable Spend $800M © 2011 Ariba, Inc. All rights reserved.

BB&T Organization Weekly Activity © 2011 Ariba, Inc. All rights reserved. Procurement/ Payment Method # of Invoices Spend % of Total Spend Catalog 693 $1,538,042.63 7.05% Non-Catalog 154 $918,865.05 4.21% Pay Off Contract 29 $1,159,717.06 5.32% e-RFD 2328 $4,427,433.40 20.31% RFD 4153 $13,758,105.02 63.10% Total 7357 $21,802,163.16

BB&T Spend Management Program Vision Reduce off-contract spending by 74% Cut requisition-to-order cycles by 80% Increase total Spend Under Management by 30% Reduce payment processing cycles by more than 70% Improve invoice and payment processing efficiencies © 2011 Ariba, Inc. All rights reserved.

BB&T Spend Management Areas of Opportunity Consolidate redundant spend approvals and gain upfront approval when possible Better support for increased regulatory focus on supplier dependence and performance Better visibility into what we buy, and from whom More straight-through processing More consistent approvals Shift from focusing on non-value added processing to focusing on compliance © 2011 Ariba, Inc. All rights reserved.

Regions Bank Regions Bank – Fortune 500 Company One of the nation’s leading banks Headquartered in Birmingham, Alabama Serving 16 states across the South, Midwest and Texas Diane Greenhaw – Vice President Corporate Finance – 16 Years with Regions Manage Corporate Accounts Payable Bachelor of Science (Accounting) and MBA – The University of Alabama at Birmingham © 2011 Ariba, Inc. All rights reserved.

Regions Bank Ranked 5th or Better in Market Share Associates 28,000 Branches 1,800 ATMs 2,200 Deposits* $95 Billion Loans* $83 Billion # 1 Market Share in Alabama, Tennessee and Mississippi Branches across footprint * As of 12/31/2010 397 142 244 147 118 85 100 263 36 9 3 16 67 13 68 64 © 2011 Ariba, Inc. All rights reserved.

Regions Business Issues AP Centralized in payment of Non PO invoices – Decentralized in receipt and approval of invoices Large volume of paper invoices Many invoices requires multiple approvers Invoices routed via interoffice mail, overnight mail and US mail for required approvals - then sent to Accounts Payable for processing Document imaging and archiving at the end of the payment cycle Limited visibility into the status of in-process invoice payments and financial obligation © 2011 Ariba, Inc. All rights reserved.

Regions Business Solution Partner with Ariba and Regions Corporate Procurement to create an enterprise invoice solution Implement an automated, paperless solution for invoice processing and approval workflow Provide a single point of receipt for all paper invoices by employing an Invoice Conversion Service Determine optimal suppliers for transacting invoices via the Ariba Network Leverage current email system for invoice approval routing Implemented November 15, 2010 © 2011 Ariba, Inc. All rights reserved.

3rd Party Shipments Manual Process © 2011 Ariba, Inc. All rights reserved. CUSTOMER Is the price in the purchase order right? Has the vendor received the order? Can the vendor meet the requested delivery date? Can Nalco meet the requested delivery date? When was the product shipped? Quantity shipped? Does price match purchase order price? Customer Order VENDOR Purchase Order Shipment Invoice Invoice

3 rd Party Shipments Automated Process CUSTOMER Automatic communication to sales on order status Easy to see and fix PO transmission failures Vendor acknowledges orders Vendor confirms/changes delivery date, quantity and/or price Vendor confirms product shipment- Nalco invoices customer Price matches purchase order price. Quantity matches goods received quantiy. © 2011 Ariba, Inc. All rights reserved. Customer Order VENDOR (connected through Ariba ) Purchase Order Order Confirmation Shipment Shipment Information Invoice Invoice

Nalco Business Case BENEFITS COSTS © 2011 Ariba, Inc. All rights reserved. Order to Cash Procure to Pay One-Time Pilot One-Time Phase 2 Ongoing Reduce Order Processing Costs Productivity Target $ Decrease procurement process costs Scanning Center Fees Hardware and software Ariba Supported Onboarding $/ transaction Improve On-time Delivery X% Target Decrease purchase price Supplier Productivity Ariba Supported Onboarding Self help Onboarding Self help Onboarding Improve cash flow Target X days Vendor invoice accuracy AP headcount Field customization Customer invoice accuracy Productivity Target $ Decrease order delivery time Reduction in leadtimes Increase sales force productivity Productivity Target Hrs/FTE Improved vendor relationship Reduction in credit holds

Productivity Gains 40% of Customer Service Reps redeployed who were manually tracking 3 rd party orders Reduction in DSO by five days Automation of late delivery notifications Reduction of blocked invoices and credit holds Reduction in scanning center fees © 2011 Ariba, Inc. All rights reserved.

“Safe Harbor” and Confidential Information Statement This information reflects the status of Ariba solution planning as of January 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.

The Business Case for AP Automation

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