Global Research Study:

B2B Integration Business Value and Adoption Trends

Lead Researcher:

Dr. Barchi (Becky) Gillai

Stanford Global Supply Chain Management Forum

June 27, 2013 Slide 2

Global Research Study: B2B Integration: Business Value and Adoption Trends

Rochelle Cohen

Senior Marketing Manager

GXS

Today’s Host

Why did GXS sponsor this independent research study

from the Stanford Global Supply Chain Management

Forum?

Provide insights frequently asked questions, such as:

What are the current levels of adoption for B2B

integration?

What are the trends in budgets and staffing for B2B

programs?

What kinds of savings are companies realizing from their

B2B integration programs in their ordering, shipment

management and invoicing processes?

What are the benefits of a managed services approach as

compared to in-house software approach?

Survey Results: Business Value and Adoption Trends

Report #1: B2B Managed Services

Report #2: B2B Integration

To help you make a more informed decision about your B2B strategy.

Today’s Presenter

Barchi Gillai has 15 years of experience in the areas of

supply chain management and operations management.

Over the years, she successfully completed numerous

research projects, many of them in collaboration with

Fortune 500 companies and large international

organizations.

Dr. Gillai has authored several articles, book chapters,

white papers, and teaching cases.

She earned her Ph.D. in Management Science and

Engineering, and her Master’s degree in Industrial

Engineering and Engineering Management, at Stanford

University.

She earned her B.Sc. in Industrial Engineering and

Management at the Technion – Israel Institute of

Technology.

Dr. Gillai can be reached at Barchi@stanford.edu

Dr. Barchi Gillai

Lead Researcher for Study: "B2B

Integration: Business Value and

Adoption Trends"

Background About Stanford Global Supply Chain Management Forum

Housed within the Stanford Graduate School of Business, the Global

Supply Chain Management Forum works in partnership with

academic, corporate and nonprofit organizations to identify, research,

develop and disseminate supply chain best practices within a

dynamic, global business environment.

Forum membership is open to industry leaders with a common interest

in advancing the state-of-the-art in global supply chain management.

To learn more about the Forum, please contact Shoshanah Cohen,

the Forum Director (cohen_shoshanah@gsb.stanford.edu).

4

Background About the B2B Research Study

Examines the latest trends and business value associated with B2B

integration programs and B2B managed services

Results of the study are summarized in two separate reports:

1. B2B Managed Services: Business Value and Adoption Trends

2. B2B Integration: Business Value and Adoption Trends

Conducted by the Stanford Global Supply Chain Management Forum

with financial support provided by a gift to the university from GXS,

Inc.

5

Today’s Agenda B2B Integration: Business Value and Adoption Trends

Study Methodology

Profile of Participating Companies

B2B Integration Programs:

─ Budgetary Trends

─ Current Adoption Levels

─ Projected Growth: Transaction Volume, Number of Connections

─ Process Efficiency Improvements

─ Best-in-Class Companies

─ Future Plans

6

Study Methodology

Study results are based on a survey of current users of B2B

integration technologies and B2B managed services

Survey questionnaire designed to identify:

─ Trends in budgetary requirements

─ Current level of adoption

─ Projected growth

─ Realized process efficiency improvements

─ Plans for future use of B2B e-commerce

7

Study Methodology

Data collection took place on September, October 2012

Online survey completed by 92 people from 75 companies

─ Participating companies varied in size, primary industry, geographic base

─ All participants have integrated B2B e-commerce into their operations for more than

a year

Data analysis included:

─ Analysis of all responses combined

─ Breakdown of data based on various characteristics

─ Comparison between responses to different questions

─ Best-in-class analysis

8

Profile of Participants

Primary Industry:

Segments with highest

representation included

manufacturers (51%), CPG

(14%), and retailers (13%).

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* Diagram 1

*All diagrams referenced throughout the presentation are sourced from the research report: “B2B

Integration: Business Value and Adoption Trends”, Stanford Global Supply Chain Management

Forum, June 2013

Profile of Participants

Company Size: Participants varied in size, with

annual revenue ranging from under $100 million to over $5 billion.

Majority of participants (80%) were large organizations with more than $1 billion in annual revenue.

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Diagram 2

Profile of Participants

Geographic Base:

Majority of participating

companies (73%) were based in

North America.

24% of participating companies

were based in EMEA.

3% of participating companies

were based in ASPAC.

11

Diagram 3

B2B Integration Technologies Annual Budget

50% of all companies

invested more than $1 million

in B2B integration

technologies.

A higher percentage of

smaller companies had

annual B2B budget of less

than $1 million.

A higher percentage of larger

companies had annual B2B

budget of $1-5 million.

Dia

gra

m 4

D

iagra

m 5

Percent of IT Budget Spent on B2B

Majority of companies (66%)

spent 5% or less of their IT

budget on B2B integration.

A higher percentage of smaller

companies spent less than 1% of

their IT budget on B2B

integration.

A higher percentage of very large

companies spent 1-5% of their IT

budget on B2B integration.

Dia

gra

m 7

D

iagra

m 8

B2B Budgetary Trends B2B Budget Increase for Most Companies

Majority of companies (68%) increased their B2B budget over the past three years.

Larger companies more frequently increased their budget by more than 10%.

Smaller companies more frequently increased their budget by up to 10%.

Majority of companies (62%)

expect their B2B budget to

increase over the next three

years.

Companies’ size did not impact

forecasted B2B budget.

Dia

gra

m 1

0

Dia

gra

m 1

3

EMEA Companies Invest More in B2B

On average, EMEA-based companies:

Had a larger annual B2B budget.

Spent a higher portion of their IT

budget on B2B integration.

More frequently saw their B2B budget

increase over the past three years.

More frequently anticipated an increase

in their B2B budget over the next three

years.

Diagram 12

B2B Transactions & Connections Expected to Increase

Nearly all participants

expected their B2B

transaction volume and

number of connections to

increase over the next

three years.

Majority expected an

increase of up to 25%.

Dia

gra

m 1

6

Dia

gra

m 1

8

Collaboration with Trading Partners Different Strategies Across & Within Companies

Wide range of responses:

40-50% of companies

exchange transactions

electronically with up to

20% of trading partners.

7-10% of companies

exchange transactions

electronically with 81-

100% of trading partners.

Most companies use

different strategies for

different trading partners.

Only 28 percent of

participating companies

exchanged transactions

electronically with the

same proportion of all

their business partners.

Diagram 20

Diagram 21

B2B Integration Offers Cost Savings for Order-to-Pay Processes

48% of companies reduced costs to manage incoming

shipments by more than 40%.

Dia

gra

m 2

4

53% of companies reduced order processing costs by

more than 40%.

Dia

gra

m 2

3

56% of companies reduced invoice processing costs by

more than 40%.

Dia

gra

m 2

5

21%

Definition Best-in-Class Companies

Best-in-class companies achieved more

than 50% cost reduction in at least one of the

three process efficiency improvements listed

in the survey.

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Best-in-Class Companies Spend more on B2B Integration

Best-in-class companies had on average higher annual B2B budget.

‒ 57% of best-in-class companies vs. 46% of all other companies spent more than $1 million on B2B.

Breakdown of the data based on company size shows similar results for Large and Very Large companies.

B2B budget of best-in-class

companies represented on

average a higher percentage of

the companies’ total IT budget.

‒ 43% of best-in-class companies vs.

26% of all other companies spent

6% or more of their IT budget on

B2B integration.

Diagram 26

Diagram 28

Best-in-Class Companies Use B2B Integration More Extensively

Best-in-class companies exchanged transactions electronically with a higher percentage of their customers.

‒ 37% of best-in-class companies vs. 23% of all other companies exchanged transactions electronically with more than 60% of their customers.

Similar results obtained for most other types of business partners.

Best-in-class companies more

frequently exchanged B2B

transactions using structured

messages.

‒ 66% of best-in-class companies vs.

40% of all other companies exchanged

more than 60% of transactions using

structured messages.

40%

Diagram 32

Diagram 31

23%

Best-in-Class Companies Expect Higher Increase in B2B Connections & Transactions

Best-in-class companies expected a

higher increase in B2B transaction

volume over the next three years.

‒ 56% of best-in-class companies vs.

34% of all other companies expected

transaction volume to increase by 25+%.

Best-in-class companies expected a

higher increase in number of B2B

connections over the next three years.

‒ 40% of best-in-class companies vs.

22% of all other companies expected

number of connections to increase by

25+%.

3%

41% 28%

28%

2%

17% 64%

17%

3%

57%

22%

18% 73%

12% 10%

5%

Diagram 29

Diagram 30

Future Plans Expansion of B2B e-Commerce Programs

96% of participants plan to

expand their use of B2B

e-commerce.

82% of participants plan such

an expansion in more than a

single category.

57% of participants selected

all three areas for future

expansion of e-commerce.

23

Diagram 33

Summary Research Study Key Take-Aways

While majority of companies spent up to 5% of IT budget

on B2B integration…

…B2B budget is on the rise

68% of companies saw their B2B budget increase over the

past three years

62% of companies expect their B2B budget to increase over

the next three years

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Summary Research Study Key Take-Aways:

Most companies expect their use of B2B integration

technologies to increase

97% of companies expect B2B transaction volume to increase

96% of companies expect number of B2B connections to increase

96% of participants plan to increase number of customers and/or

suppliers they trade with electronically, and/or number of business

processes they support

B2B strategies are different within, across companies

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B2B integration improves process efficiencies

About half of companies saw 40+ percent reduction in:

Order processing cost

Cost to manage incoming shipments

Invoice processing cost

Best-in-class companies:

Spend more on B2B integration

Use B2B technologies more extensively

Plan larger expansion of their B2B programs

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Summary Research Study Key Take-Aways:

THANK YOU!

27

June 27, 2013 Slide 28

Reports and Webinar Recordings Available on www.gxs.com

Full Reports and Executive Summaries:

IDC Opinion:

Special Report

on Unilever Brazil

www.gxs.com

Webinar Recordings:

www.gxs.com/resources/research/stanford_research_study

www.gxs.com/resources/webinars

June 27, 2013 Slide 29

Questions?

June 27, 2013 Slide 30

Thank You for Your Participation!

For More Information

Rochelle.Cohen@GXS.com

Phones

US: 1-800-334-5669, option 3

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ASPAC: +852 2884 6088

Japan: +81-3-5574-7545

GXS Web Sites

US: www.gxs.com

EMEA: www.gxs.eu

ASPAC: www.gxs.asia.com

Japan: www.gxs.co.jp