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Electronic Invoicing B2BHow to address new Italian Regulatory Requirements in yourAccount Payable with SAP AribaCUSTOMER

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In summaryNew Regulation will require you to receive digitally allInvoices from your Italian Supplier starting from January2019 (and July 2018 for specific Industries / Categories).This is a huge opportunity to streamline and create efficiency inyour Account Payable, achieving a 4x productivityincrease.4x improvement is only possible with a Smart Invoicingsolution, where Business Rules can help you in filter errorsbefore supplier submission and achieving a touchlessmatching process.SAP Ariba Commerce Automation is the solution to manageinvoices smartly and compliantly non only in Italy, but inadditionally 37 countries. 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ CUSTOMER3

Business Context In June 2014 Italian regulations introducedPublic Sector electronic invoicing regulationin the B2G market. All suppliers must sendelectronic invoices using a specific xml format to acentral hubIn January 2019 this regulations will bemandatory for B2B market too (from July 2018only for few Industries)paXMLSupplierpaXMLSDIBuyerSDI Sistema di Interscambio (Interchange system network)paXML Italian xml format for electronic invoicing 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ CUSTOMER4

Roadmap to Compliance – Regulatory RequirementsDec 2013Voluntary PS bodiescan start receivingelectronic invoicingusing SDIJun 20142015-2016Jan 2017Central PS bodies mustreceive electronicinvoicing using SDILocal PS bodiesenrolled in this processVoluntary privatecompany could use SDIfor electronic invoicingImpacts for the B2B SectorTodayJul 2018Jan 2019Private company (ifpublic tendersubcontractors)must use SDI forelectronic invoicingAll public andprivate companiesmust exchangeinvoices using SDIIt is also mandatoryfor oil & gasproducttransactions Starting from Jan 2017, private held companies could exchange electronic invoices withsame rules using SDI Approximately 15K invoices have been exchanged for B2B and 2,5M invoices for B2G everymonth Starting from July 2018 (and then January 2019), these volumes will move to 2,5B invoices. 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ CUSTOMER5

Future Scenario – Increasing Complexity in CLIENT Account PayableWhile only flow 1 (and 2 for Account Receivable) is affected by the new Regulatory requirements,your Account Payable still needs to manage also 3 4 5 without increasing complexity.Your SuppliersYour CompanyYour ClientspaXML123paperpdf45csv, xmlProcurementInvoices 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ CUSTOMERSalesInvoices6

The Opportunity – How to get benefits out of this required changeNew Regulation will imply a digitalization of the CAPTURE task in Account Payable, but only theadoption of a Smart Invoicing solution could support a full enablement of benefits.Account Payable TaskEffort Split (%)CAPTUREget data into the system (frompaper, pdf, other)PROCESSreconcile invoice with PO, GR orcheck No-PO InvoiceQUERIESsolve issue from suppliers /business sideTodayEffort reduction (%)14% Automate input through connection toBusiness Network Eliminate manual data input or check (e.g. asOCR) from team57% Embed Business Rules in the BusinessNetwork to prevent missing data Automate registration in case of completematch80%29% Give full visibility to supplier in the portal andavoid queries90%100%Tomorrow85% max reduction25-30 min per invoice 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ CUSTOMERHow to automate4-5 min per invoiceSource: SAP Ariba Benchmarks based in previous engagements7

The Opportunity – How process optimization will workSupplier portal providesreal-time access to invoiceand payment status,eliminating inquiries to APOver 87 configurablerules that capture errorsand exceptions beforethey reach APAriba 98% Auto ip-toAddressExceptionQuantityThresholdUnit AmountThresholdSuppliersBill-toAddress Fewer than 2% exceptions Massive decrease in AP effort andprocurement time Cost savingsAR Real-time visibility into errors Rapid resolution and resubmission Faster days sales outstandingTouchless invoicing: Lower AP/AR costs. Faster cycles. Lower risk. 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ CUSTOMER8

The Opportunity – Simple calculation of Benefits for Account Payable 100 k 12-20 Vendor Invoices per yearCost to manage each invoice,considering a 20% exceptions (1)(Example of Manufacturing client with 2B turnover) 50-70% 0,6-1,4 M Touchless invoice targetachievable (2)Achievable saving with theintroduction of SAP AribaCommerce Automation(1) Hackett, 2016 - Purchase-to-Pay Alignment: The Missing Link to Delivering on Spend Cost Reduction, SAP elaboration(2) SAP Benchmark based on more than 100 engagement on Invoice Management 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ CUSTOMER9

The Solution – SAP Ariba Commerce AutomationSAP Ariba, with its Commerce Automation Component, is able to cover this new RegulatoryRequirements and ensure full compliance to Buyer and Seller organizations.SUPPLIERS SELL TO SETTLEAriba NetworkSAP CLOUDPLATFORMSUPPLIER MANAGEMENTSTRATEGIC SOURCINGSUPPLY CHAINCUSTOMER VALUESERVICESPROCUREMENTFINANCIAL SUPPLY CHAINSAP Ariba BuyingSAP Ariba PayablesIndirectaccess toSAP ERPSupplierEnablementSAP AribaCommerceAutomationSAP Ariba InvoiceManagementCatalogEnablementEnd User/SupplierSupportSourcingSupport DeskeAuctionSupportBUYERS SOURCE TO SETTLESAP Ariba Supplier Lifecycle& PerformanceSAP Ariba SourcingSAP Ariba Supplier RiskManagementSAP Ariba ContractManagementSAP Ariba Spend Analysis 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ CUSTOMERSAP Ariba Supply ChainCollaborationNote: SAP Ariba Procurement Analytics included in all solutions10

The Solution – Holistic Approach to Smart Invoicing 37 Pre-Defined Country Rules – an holisticsolution for your Company Over 87 Business Rules:– 41 Generic Invoice Rules– 17 PO Rules– 15 Blanket PO Rules– 14 Tax Rules– 10 Order Confirmation and Ship Notice Rules Dramatically Reduces Invoice Exceptions up to98% Modern many-to-many for all trading partners Flexible supplier onboarding Connect once, access many 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ CUSTOMER11

The Solution – Suppliers and CLIENT have options1aAriba Network as mainsupplier gateway tocommunicate with CLIENT Your SuppliersFULL COMPLIANCEWITH NEW LAW1b CLIENT SUPPLIER TO SDI WITHARIBA NETWORKOVERALL SUPPLIERPORTAL CAPABILITYSCALABLE TO NEWPROCESSESSupplier to submit itsinvoices to SDIAriba Network to collectand integrate in CLIENT processes 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ CUSTOMERYour SuppliersFULL COMPLIANCEWITH NEW LAW CLIENT SUPPLIER TO SDI WITHTHEIR SOLUTIONNO ONBOARDING –QUICK TO IMPLEMENTSCALABLE TO FULLMODEL IN PHASE 212

Scenario 1a – Full Process (Invoice with PO)SDI hubAriba NetworkPartnerWeb UIAriba NetworkSAP ionApproval 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ CUSTOMERPurchaseOrderMobilecXML PaperCSVEmailPOPOConfirmationASN /SESGood ReceiptPOReleasePOConfirmationASN /SESGood ckDigitalsignature paXML)Invoice StatusElectronicinvoice(cXML, paXML)Match / Payment13

Scenario 1b – Simplified Process (Invoice with PO)SDI hubSupplier InvoiceAriba gementFormatConversionAriba NetworkSAP roval 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ CUSTOMERPurchaseOrderPOReleaseGood invoice(cXML, paXML)Match / Payment14

How it works – One solution to manage all scenariosSAP Ariba Commerce Automation will manage integration with SDI seamlessly, while ensuring thepossibility to channel all invoices from all your suppliers globally.1b1a1bInvoices‘good’ InvoicesYOUR SYSTEM1a34buyer5supplierBusiness RulesPurchase orderExceptionsWeb BrowserAccessInvoices3ExceptionsInvoices1a45Full backendintegration1b1a Italian Supplier to Italian Branch connected1b Italian Supplier to Italian Branch not connected via Ariba Network4Abroad Supplier to Italian Branch connected via Ariba Network5Abroad Supplier to Abroad Branch connected via Ariba Network15via Ariba Network 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ CUSTOMER3Italian Supplier to Abroad Branch not connected via Ariba Network

Why SAP Ariba Commerce Automation3.1 Million37 Countries270 MillionCompanieseInvoicing readyDocuments annuallyprocessed14 Million21 Languages 1.5 TrillionUsersavailablein annual CommerceSAP Ariba has the Largest Business Network In The World 2018 SAP SE or an SAP affiliate company. All rights reserved. ǀ CUSTOMER16

Thank youContact information:Giovanni GiacchettiDirector, SAP Ariba Digital Transformation, EMEA ovanni-giacchetti-6b1883

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Starting from Jan 2017, private held companies could exchange electronic invoices with same rules using SDI Approximately 15K invoices have been exchanged for B2B and 2,5M invoices for B2G every month Starting from July 2018 (and then January 2019), these volumes will move to 2,5B invoices. Roadmap to Compliance -Regulatory Requirements