BEN Buys & the Penn Marketplace A Competitive Advantage for Participating Suppliers Ralph Maier & Vira Homick Purchasing Services November 11, 2005

Presentation Agenda BEN Buys Purchasing System About the Penn Marketplace Benefits to Penn & Participating Suppliers Supplier Enablement Strategy Community & Diversity Supplier Inclusion Diversity Supplier Manager Supplier Requirements & Statistics Penn Marketplace Demo Supplier Showcase Demo Next Steps

BEN Buys Purchasing System Electronic purchasing system that provides point-of- demand ordering for authorized faculty and staff Delegated order creation and final approval for orders <$5,000 to over 1,700 system users Requires suppliers to be in the approved supplier database All purchase orders are transmitted to suppliers via auto-fax or electronic data interchange (EDI) At a minimum, suppliers must be able to receive fax orders Suppliers must plan for a future of electronic document transition and electronic invoicing

About the Penn Marketplace Penn’s private online supplier exchange containing preferred supplier catalog contract & Penn specific pricing Launched in January 2002, a third party application hosted by SciQuest Incorporated Over 5M items from 136 suppliers available to 1,700 authorized faculty and staff Integrated into the BEN Buys electronic purchasing system

Benefits to Penn Makes purchasing easy for faculty and staff which drives utilization of approved buying methods and preferred suppliers Provides easy access to products, product availability, and related information Automated purchase-to-pay process reduces effort, cycle time, and administrative costs Increases accuracy of data and dramatically reduces errors and rework Enables Penn to leverage buying power and shift spend to participating suppliers resulting in lower cost for products and services

Benefits to Participating Suppliers Provides product visibility to authorized buyers in the Schools and Centers Opportunity to develop new or enhance existing business relationships No-charge business model with flexibility of hosted catalog content or punch-out to supplier’s Penn specific ordering site Opportunity to participate in the Supplier Showcase for internal web based marketing of new products and Penn specific promotions Participation in the annual Penn Marketplace Supplier Show

Supplier Enablement Strategy Provide maximum value to the Penn buying community by targeting suppliers for all major commodities Primary focus on Penn’s high transaction volume suppliers Recruitment of targeted “mission critical” suppliers Recruitment of local community based and diversity owned suppliers

Community & Diversity Inclusion Participation in Penn’s eBusiness initiatives is a challenge for most small and diversity suppliers Gap between Penn’s eBusiness requirements and supplier capabilities Required innovative approach to community and diversity supplier inclusion Basis for a partnership between Penn and SciQuest for the Diversity Supplier Manager Project

Diversity Supplier Manager Project Partnership launched in July 2004 Penn was SciQuest’s 1 st DSM customer SciQuest to provide supplier specific training and content development assistance to targeted suppliers Penn assumed cost for supplier specific training Target of five new suppliers per fiscal year Suppliers to develop skills to assume responsibility after one year Five Phase I suppliers successfully enabled in FY 2005 Details available at:

Supplier Requirements Participating suppliers must partner with SciQuest to manage Penn specific catalog content and pricing Designated supplier resource to work with Penn Purchasing and technology business partner Requires the development and on-going management of electronic catalog content and price files Timely content and price file updates in accordance with the terms and conditions of negotiated pricing agreement Hosted catalog content or punch-out to Penn specific ordering site for high product volatility commodities

Supplier Statistics 136 participating BEN Buys suppliers as of November 1, of 136 are diversity owned suppliers Participating suppliers received 68% of all purchase order transactions in FY 2005 Approaching 70% in FY 2006 (YTD) Purchase dollars with participating suppliers was approximately $115M in FY2005 $27M in FY2002 No enabled supplier has ever dropped out of the Penn Marketplace

Next Steps! Suppliers interested in establishing a new or expanding an existing business relationship with Penn should contact Vira Homick, Associate Director for eBusiness How to Join the Penn Marketplace Web Site An electronic copy of this presentation is available in the “Purchasing Presentations” section of Purchasing in the News web site