Building
an eGovernment
Procurement
together
Natalia Parmenova
Business Development Manager
SAPMarkets Europe
What we would like to share with you today

What is the profile of SAPMarkets

Where we see the eMarketplaces business going

What solutions SAPMarkets provides to the clients

What lessons we have learned together with our partners in
eMarketplace projects

How SAPMarkets can bring value to your eMarketplace
 SAP 2000 SAPMarkets / 2
Corporate Profile






SAP AG spin-off
Headquarters in Palo Alto, California
Announced March 15, 2000
Opened for business in May, 2000
Employees: ~200 initially, ~400 by 2001
SAP to retain majority control of SAPMarkets
 SAP 2000 SAPMarkets / 3
SAPMarkets Regional Offices
Montreal
- Development Center
Walldorf
- Development Center
- Biz Development Europe
Bangalore
- Development Center
Palo Alto
- Headquarters
- Marketing
- Development Center
- Biz Development Americas
 SAP 2000 SAPMarkets / 4
Singapore
- Biz Development Asia
Mission of SAPMarkets
Develop, market and operate
the open business network of
marketplaces.
 SAP 2000 SAPMarkets / 5
Why Form SAPMarkets?

Focused, agile entity

World wide strength driven from Palo Alto at the heart of the
Internet revolution

Leverage SAP ecosystem (customers, partners, service
organization and sales force)

More than buying and selling (collaborative forecasting,
dynamic pricing, RFP/RFQ matching, tendering, ...)

Leverage SAP’s existing industry knowledge

Draw on SAP’s integration knowledge
 SAP 2000 SAPMarkets / 6
Where we see
eMarketplaces business
going
B2B eCommerce evolution trend
B2B e-commerce is evolving rapidly
to address more complex business processes
Exchange-to-exchange
Complex Business Process
Direct Goods and Services
Trade Facilitation
Trade Services
E-Marketplaces
Buying and Selling
Indirect Goods and Service
Point-to-Point Connections
Discreet Applications
 SAP 2000 SAPMarkets / 8
Marketplace Options
A)
Portal
(e.g. B2C Sales - Mall)
B)
n:m Marketplace
(e.g. Exchange)
Federation
D)
C)
1:n Marketplace
(e.g. Supply chain hub)
 SAP 2000 SAPMarkets / 9
Internal Marketplace
(Integration Hub)
The New Landscape of Collaboration
Enterprise
 SAP 2000 SAPMarkets / 10
Marketplace
Consumer
Consumer Portals / Malls
 SAP 2000 SAPMarkets / 11
Exchanges
 SAP 2000 SAPMarkets / 12
Channel Master Marketplaces
 SAP 2000 SAPMarkets / 13
Corporate Marketplaces
 SAP 2000 SAPMarkets / 14
The New Landscape of Collaboration
Enterprise
 SAP 2000 SAPMarkets / 15
Marketplace
Consumer
e-Business Applications for On- and OffRamps
On-/Off-Ramps
 SAP 2000 SAPMarkets / 16
Syndication of Services
3rd party service provider
 SAP 2000 SAPMarkets / 18
Single Access
 SAP 2000 SAPMarkets / 19
What lessons
we have learned
together with our partners
in eMarketplace projects
Industry e-Marketplaces
Aerospace
Energy
Automotive
Chemicals &
Pharmaceuticals
Engineering
Metals & Mining
Consumer
Products
Global Utilities
N. America
Utilities
 SAP 2000 SAPMarkets / 21
Observation 1: PR War Turns into Delivery War
Promises:
 Increase shareholder value
 Maximize liquidity
 Increase investor
confidence
 Improve market efficiency
Facts:
 Economic value of pure
exchanges is unclear
 Applications create the
value
 “Show me the money”
attitude
 SAP 2000 SAPMarkets / 22
Observation 2: Integration Continues To Be Key
High
Strategic nature of integration
Needed:
 A business plan
 Openness
 Partners’
components
 Integration
 Common
messaging
semantics
Short term fix:
Buy/build tactically
Workplace
eCommerce
Hackers heaven
Download
File
SCM
BI
ERP
Load
Program
Message
Queue
Extract
Program
Program
Screen
Scrape
Load
Program
Program
Application System A
Database
Replicator
Extract
Program
Message
Queue
Go to the lab:
Transaction
File
Application System B
Extract
Program
Program
 SAP 2000 SAPMarkets / 23
CRM
Marketplace
Program
Low
A real plan:
Integration Architecture
Download
File
Application System C
Download
File
Load
Program
Transaction
File
Program
Program
?
Time before plan changes
High
Observation 3: Applications Become Services
Components migrate
onto marketplaces:
 Serve multiple companies
 Hosted
 Ubiquitous
 Personalized
 Partner software built-in
 Integrated with back-end
 Scalability, performance,
availability and security
A)
B)
Supply Chain Optimization
• MRO Procurement
• Direct Procurement
• Planning and Optimizing
• Analysis
Relationship Management
• Sales
• Service
• Marketing
 SAP 2000 SAPMarkets / 24
Observation 4: Revenue models impact service offerings
eMarketplace
revenue streams
will evolve
from transaction
to value-added
services
Over time, value-added
services revenue will become
dominant revenue source
Revenue
Transaction
revenue
Value added
service revenue
Time
 SAP 2000 SAPMarkets / 25
Success stories of today
Success Story: ec4ec

Buyer / supplier involvement
in business & service
roadmap planning

Long-term service offering
planning
(18 months time horizon)

Business plan: 5 year horizon

Distinctive value proposition:

Collaboration between engineers, purchasers and suppliers in creating and
procuring complex components

Reduced time-to-market, therefore, lower process costs

Simple, fast and cost-effective solution
 SAP 2000 SAPMarkets / 27
Success Story: CPGmarket

Industry issues oriented

Speed of services offering

Active marketing by
all founder-participants

Third-party services

Value proposition:

potential for cost reductions for sellers and buyers by sharing a technical
platform and infrastructure, decreasing procurement cost, reducing the time
taken to source products and services

shared planning services to reduce supply chain costs

tailored information to potentially exploit new opportunities
 SAP 2000 SAPMarkets / 28
Success Story: EMARO

Differentiation points
 Seamless integration
of business processes
through the marketplace
 User oriented Catalog Mgt
to enable flexible and
comprehensive product
offering

Value proposition
 Lower Transaction costs
 Reduced M&S costs for seller
 Lower prices for buyers

Why to select SAP / SAPMarkets / Commerce One?
 Availability of solution
 One-stop shopping & strong integration of services & to back-end systems
 Strong partnership between SAPMarkets / SAP AG and Deutsche Bank
 Strong partnership for service extension, business development and sales
support
 SAP 2000 SAPMarkets / 29
Success Story: hubwoo

Addressing Europe and building
strong partnership with other
regional marketplaces
in USA and Asia

Focusing on large buyers
(> 200 Mio € revenues)

eProcurement, Reporting,
Benchmarking, Logistics,
Transportations

3rd party: Financial services

Lessons learned / experiences:
Provide standard solution based on SAP standards
 SAP 2000 SAPMarkets / 30
So, all in all, what have we learned?

Business modelling is a key for proving the validity of the ideas

Rapid deployment coupled with sound service offering road map is a key for
attracting participants

Differentiating your value proposition is a key for getting the traffic quickly

Long-term partnerships help to built confidence
ACE Project Team
Resou rce Legend
C1 reso urces
NewC o Pro ject
Mana ger
CEO an d Exe cuti ve
Sp onsorsh ip Te am
N ewCo reso urces or
partner reso urces
White = Ne wCo reso urces
Tech nica l Pro ject
Mana ger
C ontent
Factory
Access Fees
Ma rketSite Pro ject
Mana ger
Auction Se rvi ces
Proje ct Mana ger
Advertising
Conten t Medi a
Con sultant
Revenue per customer
Transactions per customer
Indi vidua l Buyer
Impl emen tatio ns
(see ne xt sli de)
Auction Services
Number of Auctions
Averag e Commission
Service Revenues
Sponsor ship
Revenues
Mix of auctions
(buyer, seller)
Hosted Rebate Fees
License Fees
Reseller:
Application Revenues
Maintenance
Systems Integration
Commerce One Confidential
Averag e PO size
Hosted Setup Fees
% of discount achievable
Hosted Subscriptions
Hosted Purchasing
Revenues
 SAP 2000 SAPMarkets / 31
Bu ySite Pro ject
Mana ger
Number of Customers
Payments
6
Vertical Networks
Su per Size
Invoicing
Transaction Revenues
Valu e-Adde d
Su ppli er Adoptio n
Servi ces Pro ject
& Conten t Mana ger
Shipm ents
Mana ger
Small Hosted
Purchase Or ders
Trai ner
Large Hosted
Revenue
Driver
Pro gram Mana
ger s
Revenue S ources
Medium Hosted
Revenue Outline
© 2000 Commerce One
16
What solutions
SAPMarkets provides
to the clients
Component Architecture
Buyer
On-Ramps
MarketSet
Seller
On-Ramps
Browser
MarketSet Builder
Browser
Enterprise Buyer
MarketSet Services Framework
SAP Internet Sales /
SAP Customer
Relationship Mgmt
Desktop / Professional
MarketSet
Catalog
MarketSet
Dynamic
Pricing
MarketSet
MarketSet
Life-Cycle
Supply Chain
Collaboration Collaboration
MarketSet
Analytics
(further to
come….)
3rd Party
Components
Oracle, PeopleSoft,
i2, Ariba, etc.
Oracle, PeopleSoft,
i2, Ariba, etc.
MarketSet Platform
Marketplaces
SAP, GTW,
dotcoms, etc.
 SAP 2000 SAPMarkets / 33
SAP Online Store /
SAP Sales &
Distribution /
SAP Financials /
SAP Document
Mgmt System
SAP Advanced
Planner & Optimizer
xCBL
xCBL
3rd Party
Components
MarketSet
Bulletin
Board
MarketSet
Order
Management
MarketSet
Connector
SAP Advanced
Planner & Optimizer
MarketSet
Procurement
MarketSet
Connector
SAP Materials
Management /
SAP Financials /
SAP Document
Mgmt System
Transport
Service
Provider
Export/Import
Service
Provider
Financial
Service
Provider
Marketplaces
SAP, GTW,
dotcoms, etc.
Architecture
MarketSet Builder
MarketSet Builder
etSet Services Framework
etSet
ement
MarketSet
Order
Management
MarketSet
Dynamic
Pricing
etSet
alog
MarketSet
Life -Cycle
Collaboration
MarketSet
Supply Chain
Collaboration
Create the front-facing marketplace experience:
 User Interface builder for HTML and mobile services
 Community features and services
 Role based & user driven personalization features
 Trading Partner Directory
MarketSet Services Framework
Framework for rapid integration of marketplace services:
 Pre-packaged components for seamless integration of
bundled, premium and third-party services
MarketSet Platform
etSet
etin
ard
MarketSet
Analytics
(further to
come….)
MarketSet Platform
 SAP 2000 SAPMarkets / 34
Basic infrastructure on which marketplaces are built:
 Trading partner connectivity through xCBL
 Document message routing and transaction processing
 EDI and RosettaNet gateway support
 Administration console for process management
 Marketplace and transaction security and Single Sign On
Architecture - Builder
MarketSet Builder
MarketSet Builder
etSet Services Framework
etSet
ement
MarketSet
Order
Management
MarketSet
Dynamic
Pricing
etSet
alog
MarketSet
Life -Cycle
Collaboration
MarketSet
Supply Chain
Collaboration
etSet
etin
ard
MarketSet
Analytics
(further to
come….)
MarketSet Platform
 SAP 2000 SAPMarkets / 35
Front-facing marketplace experience:
 User Interface builder for HTML and Mobile services
Based on Jetspeed rendering engine
HTML input as well as XML
Integration to SAP’s workplace business content
 Community features and services
 Personalization features
Help market makers create a community
 Templates
 System for user/policy management
 Role-based and user-based personalization
 Methods for trading partner registration & user login
Architecture – Service Framework
MarketSet Services Framework
MarketSet Builder
etSet Services Framework
etSet
ement
MarketSet
Order
Management
MarketSet
Dynamic
Pricing
etSet
alog
MarketSet
Life -Cycle
Collaboration
MarketSet
Supply Chain
Collaboration
etSet
etin
ard
MarketSet
Analytics
(further to
come….)
MarketSet Platform
 SAP 2000 SAPMarkets / 36
Rapid integration of services
 Pre-packaged components for seamless integration of
bundled, premium and third-party services
 Software tools, APIs, documentation, and
methodologies for integrating services
 Documented in Business Service Framework (BSF)
Cookbook
Native support for xCBL
 xCBL = XML Common Business Library ->
http://www.xcbl.org/
 Document framework for robust XML exchange
Architecture - Platform
MarketSet Platform
MarketSet Builder
etSet Services Framework
etSet
ement
MarketSet
Order
Management
MarketSet
Dynamic
Pricing
etSet
alog
MarketSet
Life -Cycle
Collaboration
MarketSet
Supply Chain
Collaboration
etSet
etin
ard
MarketSet
Analytics
(further to
come….)
MarketSet Platform
 SAP 2000 SAPMarkets / 37
Security

Marketplace security

Secure document message routing

SAP Trust Center services integration
Connectivity

Establish xCBL communication points for trading
partners

Integration of SAP applications via MarketSet
Connector

EDI gateway for transaction services and supplier
integration

RosettaNet gateway support
Management

Administration console

Marketplace management

Performance tuning
Marketplace Services on demand
People
acting in roles (purchaser, employee), participating
in business scenarios
Marketplace front end
(role based, personal user interface with
access to marketplace services &
application, set of html/XML templates)
MarketSet Builder
Marketplace
Services
User Management
eProcurement
Analysis
MarketSet
MarketSet Builder
MarketSet Services Framework
(hosted Services
provided by
Marketplace)
Order Management
Collaborative Planning
Marketplace
Platform
 SAP 2000 SAPMarkets / 38
MP Performance Management
Market
Buyer
Bulletin
Board
Dynamic
Pricing
Order
Mgmt.
Planning
Services
Design
Services
Analysis
Services
Catalog
Services
Logistics
Services
Financial
Services
Trade
Services
…
eCatalogue
Collaborative Design
MarketSet Platform
Market Connect
Security
MarketSet Architecture – Logical Diagram
Buy Side On Ramps
Marketplace
Enterprise Buyer Pro
EBP/CRM
Sell Side On Ramps
SAP Internet Sales
MarketSet Builder
Browser
Requisite
Browser
User Interface
Community Services
Jetspeed
Business Service Mgmt
Cocoon
Trading Partner Mgt.
Search
User Mgmt / Security
ITS
ITS
Internet Sales/CRM
IPC
Dr. Fuzzy
Communities
Enterprise Buyer Desk
SAP APO
MarketSet Service Framework
Buysite
APO
MarketSet Procurement
MarketSet Bulletin Board
MarketSet DP
MarketSet OM
EBP/CRM
BB
DPE
CRM
Security Package
Security Package
Websphere
Websphere
ITS
Security Package
Security Package
XDK Pro
XDK Pro
MarketSet SCC
MarketSet LC
MarketSet Analytics
MarketSet Catalog
APO
PLM
BW
Content Engine
Live Cache
ITS
SAP APO
SAP R/3
APO
Live Cache
ITS
Live Cache
Live Cache
ITS
KPro
ITS
SD
FI
DMS
iMerge
Online Store
ITS
SAP R/3
Logistic Service
Financial Service
Trade Service
Marketplaces
MarketSet Info Services
MM
News Feed
FI
Advertisement Feed
DMS
3rd Party
MarketSet Platform
Marketplaces
MarketSet Connect
SonicMQ
“Oracle, PeopleSof,..etc”
Portal Router
Multicast
PDC*
CCMS
SonicMQ
Transformation
BDC*
Foglight
XPC
Round Trip
Firewall*
Tracking
XDK Pro
3rd Party
Mapping
Oracle, PeopleSoft,..etc
Transformation
MarketSet Connect
SonicMQ
XDK Pro
Mapping
Transformation
Legacy
BC
Data Storage
Mapping
DBs
XDK Pro
LDAP
Load Balancer*
*not part of MarketSet Delivery
 SAP 2000 SAPMarkets / 39
Legacy
What is
Collaborative
Business Scenario
What is a Collaborative Business Scenario?
Participant
Participant
Activity
Participant
Collaborative Business Scenarios

Activity
Activity
Activity

Activity
Activity

Activity
Activity
Activity


 SAP 2000 SAPMarkets / 41
Are business processes that
transcend the borders of individual
enterprises
Involve multiple parties and people
with defined activities and roles
Span multiple IT environments and
systems
Make use of internet technology and
services
Can take place on marketplaces and
hubs
Rules of Drawing
Active form is used for actions
done by a user. Passive form
is used for actions done
automatically by the system
Color Key
Action done by
buyer
Column Key
Buyer
Marketplace
Seller
Action done by
seller
Functionality of buyer´s
backend system
Action done by
market place
Functionality of
Enterprise Buyer
Functionality of
MarketSet
xCBL, SAP XML
Data passed via standard
market place interface
Includes also Market
Buyer and Order
Management
Software
behind firewall
of buyer, which
allows access
to marketplace
Functionality of
Internet Sales or
Online Store
Functionality of seller´s
backend system
Other standard interface
Application component
 SAP 2000 SAPMarkets / 42
Software
behind firewall
of seller, which
allows access
to marketplace
Introducing the Marketplace
m:n
Participant
Participant
Participant
 SAP 2000 SAPMarkets / 43
m:1:n
Participant
Participant
Participant
Participant
Participant
Participant
Marketplace
Participant
Participant
Participant
Applications follow Processes
Applications
Processes
Inter-Enterprise
Collaborative
Applications
on Marketplace
Marketplace
Backend
 SAP 2000 SAPMarkets / 44
Backend
Backend
Backend
RFx Process
Marketplace
Respondent
Need for RFx
Need for Business
Prepare Engineering
Documents
...
Create RFx
Receive RFx
...
Bulletin
Board
Prepare Engineering
Documents
Review bids and
select winner
Create Bid
...
...
 SAP 2000 SAPMarkets / 45
Backend
Backend
Initiator
Request for Information
Buyer
Email system
Marketplace
DP
Product / product
group is specified
DP
TPD
Select supplier
sub-set
DP
Submit
BB
RFI is published
in Bulletin Board
Provide
information
Read notification
TPD
 SAP 2000 SAPMarkets / 46
Update trading
partner directory
Seller
Read invitation
(with link to RFI)
DP
No automatic update
of TPD so far
Email system
Detail: Request for Quotation with DP (public)
Buyer
Email system
 SAP 2000 SAPMarkets / 47
Marketplace
DP
Define product
specifics
DP
Specify RFQ
DP
Submit
BB
RFQ is published
in Bulletin Board
TPD
Request for
registration
TPD
Update trading
partner directory
Read notification
Make bid
DP
Select winner(s)
DP
Send out opportunity
result or convert to
reverse auction
Seller
DP
Read notification
Email system
Detail: Request for Quotation with DP (non-public)
Buyer
Email system
 SAP 2000 SAPMarkets / 48
Marketplace
DP
Define product
specifics
DP
Specify RFQ
DP
TPD
Select supplier
sub-set
DP
Submit
Read notification
Make bid
DP
RFQ follow-up
DP
Select winner(s)
DP
Send out opportunity
result or convert to
reverse auction
Seller
Read invitation
(with link to RFQ)
Email system
Read notification
Email system
DP
Dynamic Pricing
Example: Auction for Obsolete Equipment
Initiator
Respondent
XYZ Inc.
Identify obsolete
equipment
Identify need for
equipment
Select sales
channel: Auction
Select supply
channel: Auction
Create quotation
XML
Review bids and
select winner
HTML
Create
sales order
XML
Fulfillment and
billing
 SAP 2000 SAPMarkets / 49
Market
place
HTML
Find auction and
bid on auction
eMail
Selected as
winner of auction
XML
Create
purchase order
Auction
Receipt & payment
ERP Backend
ERP Backend
ABC Inc.
Bulletin Board
Marketplace
BBP - Bid Invitation
Dynamic Pricing
RFP/RFQ
Delivery Note
Asset retirement
Exchanges
Business Applications
Auctions
 SAP 2000 SAPMarkets / 50
BULLETIN BOARD
Detail: Reverse Auction
Buyer
 SAP 2000 SAPMarkets / 51
Marketplace
DP
Specify product
DP
Specify auction
DP
TPD
Select supplier
sub-set
DP
Submit
BB
Auction is published
in Bulletin Board
DP
Make bid
DP
View best bid and
make new bid
DP
Close auction and
send out
opportunity result
Seller
Read invitation Email system
(with link to auction)
Detail: Forward Auction (manual)
Buyer
 SAP 2000 SAPMarkets / 52
Marketplace
DP
Specify product
DP
Specify auction
DP
Submit
BB
Auction is published
in Bulletin Board
DP
Make bid
DP
View best bid and
make new bid
DP
Close auction and
send out
opportunity result
Seller
Detail: Forward Auction (unused equipment)
Buyer
 SAP 2000 SAPMarkets / 53
Marketplace
DP
Auction is
created
BB
Auction is published
in Bulletin Board
DP
Make bid
DP
View best bid and
make new bid
DP
Close auction and
send out
opportunity result
Seller
Identify surplus
equipment
PM
create quotation
SD
Mapping in SAP Business
Connector required
Detail: Forward Auction (excess stock)
Buyer
Marketplace
Mapping in SAP Business
Connector required
 SAP 2000 SAPMarkets / 54
Seller
Identify and reserve
excess stock
APO
DP
Auction is created
Create quotation
SD
BB
Auction is published
in Bulletin Board
Excess stock is
reserved
MM
DP
Make bid
DP
View best bid and
make new bid
DP
Close auction and
send out
opportunity result
How
SAPMarkets
can bring value
to your eMarketplace
Supporting the dynamic needs of the B2B industry
Development Area
Strategy

Products



Partnerships


Business
Services
 SAP 2000 SAPMarkets / 56

Continued release of product features and
enhancements
Open Business Services Layer
Developing more on-ramps
Continued open standards and
interoperability
Further development of the Global Trading
Web
Building integration partners network
Aggressive development of relationship with
third party solution providers
SAPMarkets Solution Portfolio
Enterprise using
hosted on-ramp
MarketSet
 Webflow
 Collaboration Engines for
Supply Chain,
Demand Chain,
Life Cycle, Core …
 Add-in Services
.net Service Hub
 Service Registry
 Add-in Services



Connected
Enterprise
Internet Sales
on-ramp
 SAP 2000 SAPMarkets / 57

Enterprise Buyer
on-ramp
Financial
Logistics
Insurance
 Legal
 Content
 Auction
 Advertising
 Recruitment
 News/Search
 Learning
 Translation, …
Other marketplaces
SAPMarkets dream teaming with C1

Leading marketplace technology + Leading b2b applications
= one joint marketplace solution

Marketing approach to software engineering

Pre-engineered solutions (as opposite to the „product is project“
approach)

Integration capabilites

Horizontal = into the value chain or network
 Vertical = in legacy / LAN environment

Openness and connectivity

Compliance to the latest industry standards

Onramps strategy: Enterprise Buyer leap frogging any alternative
product within 2000 with Direct material, Multi-Enterprise, Plant
Maintenance and Services and more

Delivered about 75% of today's live marketplaces
 SAP 2000 SAPMarkets / 58
Dimensions of Openness
To integrate
applications and
technology
To partner with
confidence and
success
To build the right
commercial
model
 SAP 2000 SAPMarkets / 59
Global Trading Web
Global Utilities
Energy
Telecommunication
Global Trading Web
N. America
Utilities
Aerospace
Film and Television
 SAP 2000 SAPMarkets / 60
The range of services we offer to our partners
Business
Strategy
 Alliance
development
 Value added
services portfolio
 Financial
modeling and
pricing strategy
 Governance
design and
management
 Organization
design
 Content
management
Technical
Architecture
 SAP 2000 SAPMarkets / 61
 Exchange design
 Buyer / supplier
integration
 User-interface
Program
Management
Marketing
Services
 Partner
coordination
 Execution
 Milestone
management
 Contingency
planning
Buyer Adoption
• Consistent value
proposition and
pricing strategy
• Effective sales
strategy
Supplier Adoption
• Effective
marketing and
communication
• Incorporation of
supplier feedback
Supply
Chain
Services
Business
Process
(Re)design
 Sourcing
strategy
 Auction services  Procurement
process redesign
 Catalog
management
 Change
management
 Collaborative
planning
 Organizational
redesign
 Virtual
integration
Thank
you
for your interest