e-Sourcing:

Picking up where ERP and

e-Procurement Fall Short
64157

2002 Spring, Week 4-1

TASKCO Corporation
Info@taskco.com
886-2-8772-2583

2002/03/16

June 1, 2001
CONFIDENTIAL

Todays Painful Reality

The first time you hear about a big purchase
is when you see the invoice.
Purchasing is considered the enemy by
your business units.
Best practices are for people with more
time.
Cycle time for sourcing projects can be as
long as 6 months.

CONFIDENTIAL

Agenda

What is Strategic Sourcing?

Automating the Enterprise

e-Sourcing
e-Sourcing Solution
Integration: Putting it all together
IT e-Sourcing

CONFIDENTIAL

What is Strategic Sourcing?

Strategic sourcing is a disciplined

process which organizations
implement to more effectively
purchase materials and services
from suppliers.
The process generates savings by
reducing product and operations
costs through consolidation of
purchases, elimination of duplicate
and functionally equivalent parts,
and rationalizing suppliers to the
right number of partners.

CONFIDENTIAL

Why Strategic Sourcing?

Areas of Potential Purchasing Savings

73% of potential
purchasing savings are
in sourcing.
Resulting in savings of 2-4%
overall going right to the bottom
line
Some commodity areas can save
more than 20%

Source: CAPS, The Watch Group, A.T. Kearney analysis

CONFIDENTIAL

Evolution of Strategic Sourcing

Solutions
Enterprise
Enterprise
Software
Software
Vendors
Vendors

Sophistication of Enterprise

Large enterprise,
sophisticated
purchasing group

Large enterprise,
unsophisticated
purchasing group

Small and
medium sized
business

Sourcing
Sourcing
Specialists
Specialists

Point
Point
Solution
Solution
Vendors
Vendors
Basic, hosted
software
No consultants

Solution Capability

Limited
software
Many
consultants

Enterpriseclass
software
No consultants
CONFIDENTIAL

Why an Enterprise Automation Software

Solution?

An Enterprise Automation Solution:

is a new class of product that complements (not
replaces) existing enterprise systems.
can be integrated with other enterprise systems
for maximum value (more on this later).
gives unprecedented visibility into the sourcing
process including sensitive expenditure data.
supports a consistent, disciplined process for
sourcing.
empowers the people you have.
promotes enterprise-wide collaboration.

CONFIDENTIAL

Where does Strategic Sourcing fit?

e-Purchasing

Design
Collaboration

e-Sourcing

e-Procurement
Contract

Negotiate

Buy Off Of

CONFIDENTIAL

Strategic Sourcing is distinct from Transaction

Execution
Strategic
Sourcing
en
em
ag
an
M
nd

ys

Build RFP
& Analyze
Responses

Supplier Selection

Processing
1. Issue PO
2. Receive and Verify
3. Approve Invoice
4. Payment Settlement

ERP

is

Ve

al

or

An

Select
Strategy

Create & Manage

Contracts
Decide & Select
Supplier(s)

e-Procurement

Assess
Marketplace

re

Assess Value &

Vendor Performance

1. Requisition
2. Approval
3. Order

itu

Spot Purchasing

Ordering

nd

Analyze
Orders/Spend

pe

Sourcing Project

Transaction
Execution

Ex

Demand
Generation

Negotiate with
Suppliers

e-Sourcing
CONFIDENTIAL

Automating the Enterprise

SFA / CRM

ERP

e-Procurement

e-Sourcing

Top-line Sales
Revenue
Operating Costs
& Efficiency
Bottom-line
Cost Savings

Only e-Sourcing focuses squarely on bottom-line cost savings

(the 73% of purchasing savings opportunity). It is estimated that
every $1 saved in sourcing is worth $5-25 in increased sales.
CONFIDENTIAL

Automating the Enterprise

SFA / CRM

ERP

e-Procurement

e-Sourcing

Percent of
Transactions

90%

10%

Percent of
Spend

20%

80%

Most applications are focused on the 90% of transactions that

only represent about 20% of my costs. E-Sourcing, however, is
focused on the 10% of my transactions that make up about 80%
of my costs. You tell me which is more important for my
business?
-

Roy Anderson, Director of Purchasing, John Hancock Financial

Services (20 years of corporate purchasing experience)
CONFIDENTIAL

Automating the Enterprise

Usual Order of
Implementation
Nature of
Automation
Big Technical
Challenges
Big Business
Challenges

SFA / CRM

ERP

e-Procurement

e-Sourcing

paper catalogs
and requisitions

negotiations and
decisions

e-catalog
normalization,
B2Bi standards

decision support,
spend data
acquisition

info consolidation
accounting and
and customer
order processing
communication
systems
integration,
personalization

EAI, reliability
and scalability

cultural change to adopt new business processes

(often driven top-down), politics of standards adoption

The usual order of implementation follows the emergence of these

advanced technologies. e-Sourcing automates more than putting paper
on the web; it automates human negotiations and decision making.
CONFIDENTIAL

Agenda

What is Strategic Sourcing?

Automating the Enterprise

e-Sourcing
e-Sourcing Solution
Integration: Putting it all together
IT e-Sourcing

CONFIDENTIAL

A Process Viewpoint

Sourcing, then
Requisition to Pay Process
Inventory
Sourcing

Requisitioning
Buying

Delivery
Warehousing
Payables
Traffic
Logistics

CONFIDENTIAL

What is e-Sourcing?
Sourcing is the identification, evaluation,
negotiation, and configuration of new
products/suppliers.
Typically used for the negotiation of blanket
contracts, strategic goods.

An online sourcing tool that allows buyers and

strategic sourcing specialists to obtain
closed bids (and/or conduct reverse
auctions) in a way that:
Gives consistent automated RFx creation,
management and analysis
Increases efficiency by
standardizing work processes
Qualifies new vendors and updates
data/information on existing suppliers

CONFIDENTIAL

e-Sourcing Process

Execution &
Compliance

Sourcing-Ready
Suppliers

Needs Definition
& Aggregation

Enterprise
Compliance &
Analysis

Supplier
Management

RFx &
Contract
Market discovery EstablishmentNegotiation

RFI / RFP
RFQ, Reverse Auction
Negotiation
Decision Support Tools

Market Making &

Event Support
CONFIDENTIAL

Defining the e-Sourcing Framework.

CONFIDENTIAL

Sourcing cycle provides the greatest

opportunity for procurement savings.
Key savings opportunities
Inventory
holding costs
1%

Maverick
buying
8%

Procurement
operating
costs
1%

Addressable
sourcing
spend
73%

Inventory
17%

Sources: CRPS, The Wacht

Group, AT Kearney

CONFIDENTIAL

However, sourcing remains a long,

tedious process at most organizations.
Searching for/identifying appropriate suppliers (53%)
Managing/communicating preferred supplier list (7%)
RFQ development (10%)
RFQ response/receipt (7%)
Screening/sorting proposals (20%)
Contract negotiation (11%)

Average sourcing cycle = 3.3 months to 4.2 months

Source: Aberdeen Group
CONFIDENTIAL

Multiple Internet models target the sourcing

cycle.
Requirements/supplier identification/evaluation
OpenRatings, Thomas Register, TPN Register,
WorldPreferred.com, etc.

e-Marketplaces
BizBuyer, Chemconnect, e-Steel, National Transportation
Exchange, PlasticsNet, PartMiner, Ariba (SupplierMarket.com),
etc.

Auction/exchange software
Commerce One (CommerceBid), Moai, OpenSite, Ariba
(TradingDynamics), etc.

Aggregation/outsourced purchasing
AlphaDog, Demandline, EDS/CoNext, ICG Commerce, etc.

Sourcing solutions/services
Agile, eBreviate, Emptoris, FreeMarkets, Mindflow Technologies,
ShareMax, Webango, etc.

CONFIDENTIAL

How Internet sourcing can benefit your

organization.
Reduction in prices of materials/services (5% 20%)
Rapidly establish competitive bidding space
Access new suppliers
Expand geographical reach

Shorter procurement cycles (25% to 30%)

Automate the RFP/RFQ process
Streamline order-to-pay processes

Reduce administration costs

Improve buyer productivity
Reduce/eliminate paper-based processes

Improve ability to create/manage optimal

supply base
Improved market data
Minimize demand peaks

CONFIDENTIAL

Early sourcing solutions focused on

dynamic pricing.
Traditional pricing: Prices set by
hypothetical forecasts and cost plans.
Dynamic pricing: Prices established in
real-time by existing market conditions
(i.e., actual supply and demand.)
From buyers point of view = Reverse Auctions

Effective for standard/commodity

products
Oil, gas, electricity, broadband, excess assets,
inventories, etc.

CONFIDENTIAL

Business negotiations need to determine

the Lowest Total Cost solution.
The most effective companies will be those that
can establish the most efficient global supply
chains at the lowest TOTAL COST.
Includes sum cost of price, quality, technical expertise, delivery,
etc.

Negotiations and sourcing decisions based on

multiple parameters to deliver the lowest total cost
supply chain.

CONFIDENTIAL

Key negotiation functionality required for

effective support of true B2B interactions.
Multivariable negotiations

Negotiations based on multiple parameters

beyond just price, including quality, delivery,
warranty, and financial terms.

Multi-stage negotiations
RFI RFP RFQ Award

Multi-threaded negotiations

Back and forth buyer-supplier interactions

Synchronous supply chain negotiations

Ensuring purchases are not made without due
consideration of availability/cost of services
required to use and deliver these products

CONFIDENTIAL

Selecting an e-Sourcing framework.

Company: large enterprise
Strategy: purchase a negotiated commerce or eSourcing application.

Company: mid-size
Strategy: outsource sourcing of particular products to
procurement service provider.

Company: small
Strategy: leverage dynamic trading platform and
supply network of e-Market/exchange.

CONFIDENTIAL

Strategic Sourcing
Categorization
HIGH Leverage Purchases
Capital Plant

Strategic Purchases
Direct Materials

Dollar Value
Marginal Purchases

Tactical Purchases

Indirect Materials

Indirect Materials

LOW
LOW

HIGH
Transactional Volume

CONFIDENTIAL

Purchase Category - Examples

High
Contract
Value

Low
Contract
Value

- Compressors
- Motors
- Process Equipment
- Construction Contracts
- Environmental Contracts

- Local Services
- Emergency Purchases
- Incidental Materials

Low Transactional Volume

- Chemical Feedstocks
- Utilities

- Valves/Instruments
- Office Supplies
- Computer Supplies
- Office Furniture
- Lab/Safety Supplies
- Electrical Supplies
- Distribution Chemicals
High Transactional Volume

CONFIDENTIAL

Approach Capital Purchases

HIGH

Capital Purchases
ERP
Procurement

Dollar Value

LOW

Transactional Volume

CONFIDENTIAL

Approach Direct Purchases

HIGH

Direct Purchases
ERP+
Connection

Dollar Value

HIGH
Transactional Volume

CONFIDENTIAL

Approach Marginal Purchases

Dollar Value
Marginal Purchases

LOW
LOW

Transactional Volume

CONFIDENTIAL

Approach Tactical Purchases

Dollar Value
Tactical Purchases

LOW

Web Buyer
Transactional Volume

HIGH

CONFIDENTIAL

Web Buyer Function Tactical

Purchase
Portal to communicate how to purchase supplies and
materials.
On-line web-based ordering for many of these
(using Web Buyer style)
primary use is for tactical purchases
(usually consumables)
Cost savings created by:
- Lower transaction costs
- Compliance to leveraged agreements
- Data to create better deals and monitor compliance
- Supplier base consolidation
- Broad deployment globally

CONFIDENTIAL

Agenda

What is Strategic Sourcing?

Automating the Enterprise

e-Sourcing
e-Sourcing Solution
Integration: Putting it all together
IT e-Sourcing

CONFIDENTIAL

Requirements for an e-Sourcing

Solution
A complete, holistic solution includes:
1.
2.
3.
4.
5.
6.
7.

Expenditure Analysis
Project Management
RFP / RFQ
Reverse Auctions
Contract Management
Vendor Management
Sourcing Workbench

Ideally, all modules are integrated and

designed to work together

CONFIDENTIAL

A Frictionless Sourcing Example

Expenditure
Project,
Collaborative,
Contract,
Analysis
online
and Vendor
supplier
Management
negotiations

CONFIDENTIAL

RFP Proposal with Scoring Decision

Support

CONFIDENTIAL

E-Sourcing Software
QuickSource
QuickSource is the only e-sourcing solution
designed for sourcing professionals by
sourcing professionals. This comprehensive
full-featured e-sourcing platform is local for
automating, streamlining and providing
visibility into the sourcing processes. Based
on the industry leading e-sourcing
technologies developed by FreeMarkets,
QuickSource contains a robust set of
features that allow buyers to create and
conduct online auctions right from their
desktops
CONFIDENTIAL

E-Sourcing Software
QuickSource
Create re-usable templates for
Requests for Information and
Quotations (RFxs)
Collaborate with and manage suppliers
Create and run a wide variety of realtime, competitive bidding and
negotiation activities
Conduct offline negotiations

CONFIDENTIAL

E-Sourcing Software
QuickSource Add on Services
Market Operations Services
E-Sourcing Support Desk
QuickSource Supplier Training

QuickSource Rapid Implementation and

Deployment
15 Days to e-sourcing process
QuickSource website readiness
QuickSource team readiness
QuickSource launch preparation
CONFIDENTIAL

E-Sourcing Services
FullSource
(E-Sourcing Acceleration Program)
19% average savings per contract for
direct and indirect goods and services
30-50% cycle time reduction in the
sourcing decision process
Average return on investment of more
than 20 to 1
An average of nine more suppliers per
negotiation for greater pricing
competition
CONFIDENTIAL

 FullSource

(E-Source Acceleration Program)

Industry-specific program management driven
by a dedicated, experienced team who will help
design and implement a unique e-sourcing
program for each customer
Expert e-sourcing services in hundreds of spend
categories
Information and knowledge about specific
commodities and supply market dynamics
FreeMarkets' industry-leading, real-time,
advanced e-sourcing technology
24-hour technical and operational support in
over 30 languages
CONFIDENTIAL

 FullSource
(E-Sourcing Software )
Transformation bidding
Index bidding
Net Present Value (NPV) bidding
Multiple Offering bidding
Rank-Only bidding
FreeMarkets is the only e-sourcing solution
provider willing to share responsibility with
an organization to meet its strategic
sourcing objectives.
CONFIDENTIAL

 FullSource
Market Operations

Global

FreeMarkets' Global Market Operations Centers

(GMOCs) are located in Singapore, Brussels,
and Pittsburgh to service customers across
world markets
Coordinate and test events Develop and
enforce market rules
Proactively monitor bidder connections and
bidding activity
Provide surrogate bidding for any bidders that
experience technical difficulties
Train and support all participating suppliers
Provide real-time event support
CONFIDENTIAL

 Asset Management
Fast, market-based pricing when selling surplus
assets
Quick, easy access to needed assets for buyers
A variety of sales venues, including Online Asset
Auctions and Onsite Asset Auctions
Support by dedicated customer service teams
Ability to create a fair, neutral marketplace with
equal access for all participants
Public or private access to a global asset
database and trading environment
FreeMarkets Online Asset Auctions
FreeMarkets Onsite Asset Auctions

CONFIDENTIAL

Future Functions
FreeMarkets continues to develop end-to-end enterprise esourcing platform code named Sierra Nevada
o Functions of Sierra Nevada
o 1) Collecting and analyzing data
o 2) Developing sourcing strategies
o 3) Locating, managing, and evaluating suppliers
o 4) Creating requests for information, proposals, and
quotations
o 5) Selecting price discovery methods and executing
negotiations
o 6) Analyzing price discovery responses
o 7) Awarding contracts and tracking implementation
o 8) Managing awarded contracts and supplier performance
Release of Sierra Nevada in summer of 2002

CONFIDENTIAL

Intelligent Trading Networks.

CONFIDENTIAL

OnSite: General Motors

Background:
#1 automobile manufacturer
Expenditures = $87 billion/yr.
30,000 suppliers worldwide

e-Sourcing strategy:
64 reverse auctions (Nov. 99 Sep. 00)
Representing $500 million-plus of transactions
Including $10 million via forward auctions
25 different commodity types
Primarily commodity/low-engineered parts
Events involved 470 suppliers

CONFIDENTIAL

OnSite: General Motors

Results:
Typical savings of 3% to 30%
Reduced process cycles to 3 to 4 weeks.
WARNING: Bid transparency is not always to
buyers benefit

Future plans:
Multi-variable RFQ/evaluations
Multi-currency
Extend to more complex products

CONFIDENTIAL

Agenda

What is Strategic Sourcing?

Automating the Enterprise

e-Sourcing
e-Sourcing Solution
Integration: Putting it all together
IT e-Sourcing

CONFIDENTIAL

Systems Integration
Many e-Sourcing modules can add
immediate value without any enterprise
systems integration.
However, large incremental value is
realized with each integration including
your ERP, e-Procurement, e-Catalog, data
warehouse, and other enterprise
systems.

CONFIDENTIAL

Systems Integration Points

e-Procurement System
Purchase
Requisitions

Contract
Terms

MRP

RFI,
Sourcing Analysis

DW

AP

Vendors

Requisitions
Scorecard
Data
Vendor XML

RFPs/RFQs,
Reverse
Auctions

News,
Content,
Events
Commodity
Info

Platform

XML,
HTML

HTTP

Vendor
Spot Pricing,
Commodity
Pricing

Vendor

RFQ XML

Sourcing

Sourcing
DB
Data

Net
Markets

Email

B2Bi

AR, Vendor
Performance Data

Spend
Data

EAI

Purchasing

Material
Master

XML

Sourcing
Workbench

Requisitions

ERP System

Third-party
Content
Providers

e-Sourcing
System

Vendor
Sales System

Catalog

Quote XML
SOAP

Catalog
UDDI
Registry

UDDI Server
CONFIDENTIAL

Agenda

What is Strategic Sourcing?

Automating the Enterprise

e-Sourcing
e-Sourcing Solution
Integration: Putting it all together
IT e-Sourcing

CONFIDENTIAL

IBM e-Sourcing Business Hosting

CONFIDENTIAL

What is IBM e-business Hosting

e-business hosting includes a full spectrum of services that a
customer may acquire from an external provider to support
the deployment and operation of their business processes and
applications on the web.
The service might range from the basic provisioning of secure
data centre facilities, redundant network connectivity and
equipment rack and floor space (co-location), to varying
degrees of standard managed services through to our focus
on highly customised solutions delivering enterprise
applications over IP networks.
e-business hosting is comprised of modular service elements
that may be selected by customers at any time in the life of
the service engagement as their hosting needs evolve.
Do more business up front, and secure your future business
growth
CONFIDENTIAL

Why Customers Choose Hosting

Business Drivers

Technical Drivers

Freedom to focus on running

your business

Faster time-to-market

Maximise ROI potential

High-bandwidth Internet
connectivity

Flexibility to respond quickly to

market changes

Enhanced security

Enhanced reliability

Reduced risk

More cost-effective than

in-house
Why
Companies

Choose
Hosting Over
In-House

Source: Forrester
Research, May 2000

Performance optimisation

Lack of Expertise

Not Core Competency

Reliability

Responsiveness
Time Savings

9%

Lack of Technology

9%

Access to specialised skills

Cost Savings

18%

18%

45%

36%

27%

CONFIDENTIAL

The Continuum of Hosting Services

Level of Service

Complex

Basic
Low

Level of Integration

High
CONFIDENTIAL

Hosting Services
Challengers

3.0%
3.7%

11.1%

15.1%

4.2%

Exodus
AT&T
UUNet
UUNet

Digex
Genuity Digex
Data
Return
EDS
EDS
Navisite
Digital Island
Intira
Cable
Cable &
& Wireless
Wireless
Rackspace
Rackspace
PSINet
PSINet
Globix

Source: IDC,
4/2001

IBM's Web Hosting Revenue Share as of 12/31/2000

IBM

Qwest
Qwest

Execute

Ability

15.1%

to

Ability to execute

IBM Global Services

Exodus

34.4%
Verio
Next 10
Qwest
Digex
Global Center
PSI Net

1.4%
Genuity

3.8%

2.3%
WorldCom

2.7%
EarthLink

3.1%
Other

Leaders

As
As of
of 12/00
12/00

Niche Players

Visionaries

Completeness of Vision

Recognised Leadership in the Market, and in the

scope of its e-business Hosted Solutions
CONFIDENTIAL

Some of IBMs Customers

Financial Services

Industrial

Wingspan Bank

ICSA T

iStarXchange

Citigroup, Inc.

Allied Holdings

Sony Electronics, Inc.

JP Morgan

Danone

Moody's Investors Service

Calberson

Retail/Services

Thomson Multimedia

NYSE

TAHO Commerce
Group, LLC
Cahoot

Communications

GRAMMY Awards

Energy Argus

Telecom Italia

Travel/Transportation

Bouygues

ISP/ASP

Scoot

Aventis

Wimbledon

Kellogg

Roland Garros

BP

IKON Office Solutions

Telemarine

Infrascope

Macy's

US Navy

GovernmentJobs.com

Sears Roebuck &

Company

Victoria's Secret

American School
Directory

Tinde

Alerio

ASP-One, Inc.

Eli Lilly

Catapulse

I-TRAX.com

Expansionet

CareTouch

Pragmatix

Health Care

Public Sector

Foundation for
Economic Development

CONFIDENTIAL

Universal Server Farm Architecture

The Universal Server Farm v3

architecture delivers...

Secure customer separation

Multi-layered firewalls

Consistent architecture
worldwide

Enhanced scalability,
rapid change

Internet
User

Internet

Switch
Switch and
and Firewall
Firewall

Web
Web Layer

Data Layer

Switch
Switch and
and Firewall
Firewall

Option for dedicated

environment
Logical design to enable
change via software from
remote locations
Cisco and other industry
products, and proprietary
management tools

Switch
Switch and Firewall
Firewall

Private
Networks

Customer
Premise

CONFIDENTIAL

e-business Hosting - a Fully Managed

Service
Account Support
Structure
Security
Keynote, SurfAid

Standard Hardware Platforms

pSeries (RS/6000), AIX
xSeries (Netfinity), NT, Linux
Sun, Solaris
Single site
Standard Application Servers

WebSphere
Domino
Microsoft IIS
Netscape

Granular Service Components

Custom Services
Systems Management
Performance Management
Backup and Recovery

Dual site
Firewall
Firewall
Firewall
Firewall
Firewall
Firewall

Load
Load
Balancing
Balancing

Web
Web
Server

Web
Web
Server
Server

Load
Load
Balancing
Balancing

Web
Web
Server
Server

Web
Web
Server
Server

Web
Web
Server
Server

Load
Load
Balancing
Balancing

Web
Web
Server
Server

Web
Web
Server
Server

Firewall
Firewall

Firewall
Firewall

Application
Application
Server
Server

Applications: Siebel, Broadvision,

SAP, Oracle, Websphere

Application
Application
Server
Server

Database
Database
Server
Server

Web
Web
Server
Server

Firewall
Firewall

Application
Application
Server
Server

Database
Database
Server
Server

Database
Database
Server
Server

SAN
SAN

SAN
SAN

Firewall
Firewall

Firewall
Firewall

SAN

Web
Web
Server
Server

Data Centre

Load
Load
Balancing
Balancing

Data Centre

Firewall
Firewall

CONFIDENTIAL

Multiple-ISP Internet Access

Architecture
Internet/Other Private and Public Peered ISPs

ISP 1
IBM NOC

ISP 2

ISP 3

ROUTER
ROUTER

ISP 4

ROUTER
ROUTER

IbmAdministration
Administration &&
Ibm
Management
Services
Management Services

SWITCH
SWITCH

CUSTOMER
CUSTOMERWEB
WEB
ENVIRONMENT
ENVIRONMENT

SWITCH
SWITCH

Optional
Cross
Connect

POTS

CUSTOMER
CUSTOMERWEB
WEB
ENVIRONMENT
ENVIRONMENT

Bandwidth
Control
DOS Attack
Monitor

Level 3 VLAN
Architecture
Optional Redundant
Connections

e-business
e-business
Hosting
Hosting Center
Center
WAN

RTR
RTR

Customer
Customer
Premise
Premise

CONFIDENTIAL

Delivering Applications over an IP

Network
External Services

Enterprise
Data Center

THE INTERNET

Private
Enterprise
Network
CSR

CSR

Public Telephone Network

CSR

CSR

Branch
Branch Offices
Offices

CSR

Hosted Applications, Storage

eBHCs
eBHCs

AIP /aggregator for ASPs

ASP / integrator for Enterprises

Public
Public IP
IP
Network
Network Services
Services

THE INTERNET

GPRS
UMTS

ADSL
CSR

CSR

Branch
Branch Offices

CSR

Cable

CSR

CSR

SMB // SOHO
SOHO
CONFIDENTIAL

Application Hosting Services

Comprehensive infrastructure and application management -provided by a team of e-business experts

Custom hosting solutions

High-availability, high-volume sites

Overall site responsibility

Applications, operating systems,

servers

Complex security solutions

System integration

Web site design and development

Database and application

installation and configuration

Custom applications
and services

Advanced monitoring

Performance, capacity and change

management

Plan

Design

Build

Manage

Run

Test

CONFIDENTIAL

Hosted Applications

Fully managed infrastructure for Buy

and Supply, CRM, BI

Industry-leading hosting for

e-marketplace applications
Seamless data flow for B2B
transactions

World-class support

Trading Partner enabling

Single point of contact

Alliances with market-leading

application providers

IBM's Websphere

Ariba Technologies

i2 Technologies

SAP, Siebel, Broadvision, Oracle,

Global e-business presence

500k+ worldwide EDI-enabled

partners

Customers in 160 countries

IBM hosts many of the world's

leading e-markets

CONFIDENTIAL

Capacity On
Demand

Applications

Infrastructure

Storage on Demand

e-markets

EDI

ASPs

Ariba / i2

MIPS on Demand

Customer Apps

WebSphere

Wir
e
Acc less
ess

Management Services

Small Bus Solutions

The Future: Building from Superior

e-Hosting Capabilities to e-Sourcing

Bandwidth on Demand
Hosting Center Architecture
Hosting Facilities
CONFIDENTIAL

Advantage in Hosting
Provide your clients with the safest, most secure
and complete application hosting offering
Enhance your chances of Winning
Deliver a better service to your client
Secure the on-going business

Many competitors are experiencing financial

difficulties
Troubled providers need to raise capital to fund operations
Downsizing can affect client service
Too much is at stake to take a chance at being there when
"the lights are turned off"

CONFIDENTIAL

What does e-Sourcing bring to?

Work Processes For :

RFx Creation and Development
Customizable Templates

Supplier Qualification / Vendor Management

Electronic Transmission of Specs,
Documents, Drawings Etc.
E-bidding
Sealed Bid
Reverse Auction / Forward Auction

Expenditure/Bid Analysis

CONFIDENTIAL

Conclusion
73% of the potential cost savings are in
sourcing yet today, sourcing is done
completely manually.
If youre a large enterprise with a
sophisticated purchasing group, enterprise
software is the right choice.
If youre choosing enterprise software, you
need a holistic solution that addresses the
entire sourcing process.

CONFIDENTIAL

Efficient & Effective Procurement

Everyone on the same platform
(intellectually & physically)
Global scope
Choosing & using e- tools to help enable
improved work process
Supplier consolidation / leverage
Avoiding the maverick purchase
Measure results

CONFIDENTIAL