Ebusiness opportunities for suppliers

1
E-business opportunities for suppliers
Scandinavian Automotive Suppliers
ConferenceElmia, Jönköping, 2003-02-05 Hans
Ahlinder, CEO IBX hans.ahlinder_at_ibx.se
2

• COMPANY INTRODUCTION

3
Basic facts about IBX

• 73 employees
• Revenue 2002 7,5M, (growth 2002 20)
• Offices in Stockholm, Oslo, Stavanger, Copenhagen
  and Helsinki
• Operates e-procurement for buyers and suppliers
  in 17 countries
• Founded in July 2000 by Ericsson, SEB and
  b-business partners
• Monthly spend over exchange exceeding 80M
  (excluding investment purchases and internal
  (buyer-to-buyer) order volumes

4
IBX Business model

• IBX is a multiple private exchange, meaning
• it is buyer driven in terms of functionality and
  business model focusing streamlining procurement
  operations for large enterprises mapped to
  supplier requirements
• all trade is regulated in purchase agreement
  between the buyer and the supplier IBX is not
  engaged in commercial arrangements
• IBX is not
• a marketplace where every company can market,
  sell or buy to anybody

5
IBX commodity scope
Strategic Direct Material Product related,
strategic supply, company core, time critical,
global supply etc, differentiating
Non-Strategic Direct Material
Indirect Material Services Non-product related,
non critical, cost-driven, non-core supply
IBX core
6
IBX Customers Buyers and Sellers

• 250 suppliers industry and non-industry
  specific

• Sandvik
• Mitutoyo
• Hewlett-Packard
• VWR International
• Sigma Aldrich
• Atlas Copco
• Tibnor
• Ahlsells
• Lyreco
• Kinnarps
• Dell
• AGA
• Sodexho
• Papyrus
• Corporate Express
• EFG

BUYERS
SELLERS
7
IBX Global Activities
IBX GLOBAL NETWORK
IBX own supplier network
Network partner
8
IBX business model is built on interoperability
vision for supplier is to connect once
Customer unit in South Africa
UK
US
Customer unit in UK
ERP Integration
eProcurement application
Customer unit in Sweden
Automotive
IBX
Aerospace
Customer unit in Brazil
Germany
9
A potential model discussed with global industry
oriented exchanges would be set-up like
Cross-industry customers
IBX
Nordic suppliers
Industry specific customers
Industry focused service providers
Global suppliers
Industry specific customers
10
IBX is council memmer of ONCE(Open Network for
Commerce Exchanges)

• An independent, non-profit organization devoted
  to facilitating and promoting the continued
  growth of business-to-business e-commerce
• A global network of electronic exchanges that
  provide services to accelerate the movement of
  Internet trade
• Created by the vision of enabling buyers and
  suppliers to connect once
• A forum for the exchange of ideas and practices
  as well as the development of meaningful industry
  standardization for business interoperability,
  technical standards and public policies impacting
  the future growth of B2B commerce
• More information on www.connect-once.com

• 30 member service providers
• Chairman Ray Castelli, Quadrem
• CEO Kerry Lamson
• Executive board Sandy Kemper (eScout), Henry
  Danis (CommerceOne.net), Peter Lageson (IBX)

11
IBX experiences from working with ONCE

• Easier to get access to and assess local
  exchanges globally
• Shorter time to customer with SLA templates,
  Interoperability agreement templates, security
  guidelines and personal networks
• Communication standards such as xml is not a big
  issue
• Main challenges
• Cross industry standardisation of content on PO,
  Invoice, etc
• All industries are involved in standardisation
  work but suppliers are normally supporting many
  industries why de facto standards are not
  materialising
• Content standardisation categorization,
  attributes, formats etc
• The cost of connecting suppliers directly over
  IBX would be very high and time consuming
• The cost of finding and connecting local exchange
  partners would be difficult without ONCE

12
Focus areas for IBX in ONCE

• Standing committees
• Business Interoperability
• Business Services
• Security
• IBX is mainly involved in the work with business
  interoperability with focus on practical
  standardisation, service levels, content and
  supplier enablement issues
• ONCE is also an active member in OASIS and
  contributing to the continuous development of
  ebxml and related technical standards

13

• Understanding automotive customersWhy are your
  customers focusing on e-business and electronic
  procurement?

14
What is the customer business driver
fore-procurement?

• CONTROL
• Quality is high priority - only certified
  suppliers shall be used (environmental rules,
  ethical reasons, quality guarantee etc)
• Top-down driven change management in order to
  optimize number of suppliers
• Efficient cost management up-streams in order
  process provides agility for budget performance
  management
• COMPLIANCE
• Many large organisations have great difficulties
  in securing contract compliance industry
  benchmark is 10-30
• Off-contract buying (maverick) results in higher
  prices/higher TCO, extra administration and lower
  quality
• Non-compliance results in no negotiation power
  for buyer and lost market share for selected
  suppliers

15
What is the customer business driver for
e-procurement? Part two!

• PROCESS AUTOMATION
• Todays processes are often manual, paper
  phones based. They are costly for both buyer and
  suppliers!
• Long lead times and poor quality (errors, lost
  transactions, seek-and-find costs)
• Automated processes guarantees corporate
  standard, track-and-trace ability and reduced
  lead times
• Increase efficiency in supplier relationship
• OPTIMIZATION OF SUPPLIER BASE
• Organization with more than 20.000 employees have
  20.000 suppliers or more
• Optimization as a whole is often equivalent to
  reduction but within certain commodities you
  might actually want to increase number of
  suppliers

16
Why do buyers turn to IBX?

• IBX has leading experience in Europe in
  successful e-procurement implementations
• IBX has proven track-record in global
  connectivity with other service providers
  assisting suppliers to reach multiple buyers
• Significant experience from MRO-supplies
  (maintenance, repair and operations)
• Positive supplier engagements

17

• IBX value proposition to suppliers

18
IBX service portfolio overview for suppliers
Professional Services Categorization, content
normalisation, benchmarking, integration
Applications (ASP) Order management, e-invoicing,
statistics, catalogue management
Business Exchange Integration of buyer, hosting
electronic catalogs, roundtrips to webshops,
business document routing,integration
19
Supplier options for integration with IBX
Buyers
Suppliers
e-procurement system
ERP system
IBX Order Management
e-procurement system
ERP system
Business Document Integration(xml)
Seller ERP or CRM system
e-procurement system
ERP system

• Business documents
• Purchase Order
• Purchase Order Response
• Price and Availability Check
• Order Status
• Change Order
• Invoice
• Advance Ship Notice

Roundtrip (Webshop)
Please note that Roundtrip only supports catalog
flow and needs to be complemented by appropriate
document transfer method