SAP Financial Services Statement of Qualifications

1
PricewaterhouseCoopers Shaping the World of
Business Online
January 2001
2
Agenda

• Background
• PwC Alliances
• ERP vs. Emarkets
• Key Trends
• An e-markets Example
• What PwC Does With E-Markets
• Questions

3
Why PricewaterhouseCoopers
Global Strength PricewaterhouseCoopers is the
largest Professional Services firm in the world
and has integrated global e-business practice
capability - - from strategy to implementation
Global Professional Services Personnel 155,000 Re
venues 15 billion Countries 152 Offices 860

• Global Consulting Practice
• Personnel 32,000
• Revenues 4.5 billion

• Global E-Business Practice
• Personnel 15,000
• Revenues 2 billion

4
PwCs eMarkets Global Organization

• Think Globally, Act Locally - across Americas,
  EMEA, and Asia-PAC theaters
• Deliver Integrated portfolio of eMarkets services
  from Strategy through Operations at our eMarket
  and eHub engagements

PwC eMarket Global Org.
Industry
eMarket Delivery
Global eMarkets COE
eMarkets Gold Teams (Global, Theater, BU)
Global Knowledge Mgmt - e.g. Tools Methods
5
Personal Background

• Education
• Professional Experience
• Andersen Consulting
• Gartner Group
• Benchmarking Partners
• PricewaterhouseCoopers
• Areas of Expertise
• ERP
• Supply Chain
• E-markets

6
Our Vendor Alliance Process
A Full Lifecycle Approach
Discover
Select
Maintain
Execute
Invest
Retire
Execute plan as agreed upon by both parties with
measurable goals and objectives
Provide support tools and aides for practitioner
selling and delivering services around the product
Monitor relationship and either exit or transfer
to appropriate functional vendor relationship area
Identify potential vendors of interest
Perform technical and business due diligence to
determine level of relationship and possible
monetary investment
Construct terms of the deal to reflect type of
relationship and type of investment
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Key Alliances and Potential Alliances

• Strategic
• SAP
• Oracle
• JDEdwards
• PeopleSoft
• i2
• Manugistics
• Commerce One
• Ariba
• Siebel
• Epiphany
• Broadvision

• Emerging
• Rightworks
• Yantra
• Spaceworks
• NetVendor
• Syncra
• VerticalNet

8
PwC Alliances in Action
9
eMarkets
An eMarket is an Internet-based environment for
companies to communicate, collaborate, conduct
business and create new business in two primary
models consortium-based exchanges and eHubs
(private exchanges). eMarkets will provide the
technology/process glue that will enable
Value-Added Communities and MetaMarkets to emerge
quickly.
10
Evolution of The Networked Economy

• The 21st Century Enterprise The transformation
  of the company from the traditional business
  model to the eBusiness model shifts the focus
  away from an internal base of physical capital
  and into an internet enabled enterprise focused
  on integration along the value chain.

Industry Value-Chain Focus (Value-Added
Communities)
Single Company Focus
Customer Pull Focus
BRAND CAPITAL
Sales Push Focus
Customer Focus
HUMAN CAPITAL
Production Focus
Information replacing Inventory
High
Low
WORKING CAPITAL
WIP, Finished Goods
High
Low
Ownership of Production
PHYSICALCAPITAL
Outsourcing
Traditional Business
eBusiness
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eMarkets and eHubs - Evolution of The Networked
Economy

• Where ERP and MRP focused on integrating a
  companys individual supply chain, eMarkets and
  eHubs are the logical next step in integrating
  the value chain.

Extra-prise Collaboration i.e., The Networked
Economy
High
eMarkets / eHubs
Enterprise Integration
ERP
Computer Integrated Manufacturing
Degree of Collaboration/ Networking
MRP II
Islands of Automation
MRP
Low
1970 1980 1990 2000
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Todays Reality Inefficient Supply Networks
Functional Silos
13
The eMarket and eHub Vision Networked and
Collaborative Supply and Value Chains
14
Participation Benefits Are Widely Recognized and
Accepted
Buy-Side Benefits
Supply-Side Benefits
Value Proposition

• Buy better auction pricing, collaborative
  buying
• Eliminate EDI and 3rd party (VAN) costs
• Larger, more open markets
• Improve efficiency and communication across
  entire supply chain
• Access to more suppliers globally
• Shorten product development cycles with key
  suppliers
• Lower inventory levels and reduce out of stock
  positions
• Facilitate built-to-order production model
• Joint Develop and Application Hosting

• Eliminate EDI and 3rd party (VAN) costs
• Access to new retailers at a lower cost
• Auction surplus inventories, capacity
• Build one interface to exchange vs. many
  interfaces to individual retailers extranets
• Reduce safety stocks and inventory levels
• Manage production capacity more effectively
  efficiently

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The eMarket Challenge - The CPG Example
Consumer Products Exchanges
Supply-Side Markets
Full Service Exchanges
Demand-Side Markets
Novopoint .com
Transora
WalMart
World-wide Retail Exchange (WWRE)
Cargill meat
Global NetXchange (GNX)
Rooster .com
DealByNet .com
Inc2Inc .com
Verticals
Chevron C-Store
CPGMarket .com
ecFood
3
EfDex.com
9
4
11
1
12
8
5
7
2
6
13
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Output Verticals
Consumer Products Verticals
Input Verticals
Food Service Verticals 12 Foodbuy.com 13
Instill
Chemical Verticals 3 Envera 4 eChemicals 5
CheMatch 6 ChemConnect
Paper/Packaging Verticals 1 Packaging Insider 2
Packaging Network
Agriculture Verticals 7 Agriplace.com 8
Foodtrader.com 9 FoodUSA.com 10
VerticalNet 11 Worldoffruit.com
Bubble Size proportional to current/potential
number of participants Source Company press
releases, PwC Analysis (last update 10/16/00)
Foodingredientsonline.com, Foodonline.com,
Bakeryonline.com, Beverageonline.com,
dairynetworkonline.com, eatandpoultryonline.com

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What is Transora?
Transora will provide its customers a single
window on the web increasing overall
functionality and massively reducing integration
costs
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Transora Capabilities
eMarket Research eMedia Buying eCouponing
CPFR Inventory Management Transportation/Logistic
s
Item Catalog Order Management Promotion
Management Category Management
eProcurement Technology eSourcing
Tools Collaborative Purchasing
eSettlement, Government Trade Programs, Hedging,
Treasury Management
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Selected Transora Technology Partners
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eMarkets - Best of Breed Architecture
Other Exchanges
Marketplace Portal Web Services
Exchange Company
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eMarkets Integration - Indirect Procurement
For many of our clients, indirect procurement
functionality is sequenced early in the eMarket
integration plan.

• Functionality
• Requisition
• Purchase Order
• Receiving
• Payment Processing

• Functionality
• Requisition
• Purchase Order
• Receiving
• Payment Processing
• Auctioning

Legacy Financial Systems
Purchase Orders
Payment
eMarket
eProcurement (B2B)
Master Data
Catalog Content, ProCard Reconciliation
Payment
On Ramp
Other ERP
Payment
Indirect Data
Indirect Data

• Master Data
• Vendor
• Material
• Account
• Cost Center
• WBS

Procurement Data Warehouse
SAP
Master Data Reference
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eMarkets Integration - Direct Procurement/Supply
Chain
Direct procurement involves much higher level of
supply chain integration.
Legacy Sales Systems

• Functionality
• Requisition
• Purchase Order
• Receiving
• Payment Processing
• Demand Auctioning
• Sales

• Functionality
• Requisition
• Purchase Order
• Receiving
• Payment Processing
• Auctioning
• Sales

Sales
Legacy MRP Systems
Purchase Order / Demand
Purchase Orders
eMarket
eProcurement (B2B)
Requisitions / Capacity
Purchase Order / Invoice / Payment / Sales
Catalog Content, ProCard Reconciliation
On Ramp
ERP / SAP
Requisitions / Capacity

• Procurement Data
• Indirect
• Engineering
• MRP

• Procurement Data
• Indirect
• Engineering
• MRP

Invoice / Payment

• Master Data
• Vendor
• Material
• Account
• Cost Center
• WBS

Procurement Data Warehouse
Financial Systems
SAP Master Data Reference
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IT Architecture - Foundation
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Where are eMarkets Today?

• Most industries have announced the establishment
  of at least one major eMarket or eHub.
• Most major players have already committed to an
  eMarket or eHub.
• Most eMarket projects are still developing their
  business model and in the early stage of their
  build - none are in full production.
• Most of the eMarkets bring up MRO procurement and
  auctions first, then work on more complex supply
  chain integration.
• Some eMarkets have established an online
  presence, albeit with limited functionality.
• Many eMarket projects are still evaluating
  technology partners - no single technology leader
  has emerged.
• eMarkets participants are currently budgeting for
  FY2001 integration and implementations.
• Major eMarket technology vendors are scrambling
  to develop functionality.

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PricewaterhouseCoopers offers our clients a
comprehensive set of service offerings to help
them launch their eHub/eMarket

• eHub / eMarket Accelerator Services From
  conception to implementation, PwCs eParticipate
  methodology is designed to get an eHub / eMarket
  up and running FAST.
• Owner/Member Integration From our eHub / eMarket
  Integration Diagnostic to complete back-end ERP
  integration, our tools and thought leadership
  help companies maximize the value derived from
  integration.
• Supplier Integration Our supplier integration
  services help first- and second-tier suppliers
  seamlessly connect with eHub / eMarket value
  chains.
• eHub / eMarket Design/Implementation
  Collaborating with clients to setup eHubs to
  facilitate integrated commerce with a multitude
  of external partners (eMarkets, major customers,
  major suppliers).

These services give our eHub / eMarket partners a
powerful competitive advantage.
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PricewaterhouseCoopers offers our clients a
comprehensive set of service offerings to help
them launch their eHub/eMarket

• eHub/eMarket Operations The operational backbone
  for multiple vertical and horizontal eMarkets.
• Joint Venture Funding A deal team to
  evaluate/approve all eHub / eMarket investments.
• Application Service Provider (ASP) Through our
  ASP services, we help companies deploy, host, and
  manage the software solutions that support the
  eHub and its members (marketsite operation,
  buyer/supplier integration, and buyer/supplier
  eHub operation).

These services give our eHub partners a powerful
competitive advantage.