1. eProcurement at the University of Pennsylvania SciQuest “Find, Buy & Manage” Seminar Princeton, New Jersey October 23, 2003

2. 2 Presentation Agenda About Procurement at Penn eProcurement Business Objectives Phase I Key Accomplishments Phase II Business Objectives Critical Success Factors Conclusion Contact Information Q & A

3. 3 About Procurement at Penn Delegated buying environment - 1,900 purchasing system users creating requisitions at the point-of-demand and approving orders <$5,000 Oracle Financials - Oracle Release 11i Purchasing, Payables & General Ledger with iProcurement electronic requisition Penn Marketplace - Penn’s private supplier exchange launched in January 2002 for most commonly order products and services Annual Purchase Volume - 275,000 transactions & $700M in spend

4. 4 eProcurement Business Objectives Make purchasing easy - increase customer satisfaction, compliance and utilization by reducing time & effort related to buying activities Focus on core competencies - enable purchasing staff to focus on customer and supplier relationship management, contract negotiations, sourcing, and cost saving opportunities Leverage technology for ROI - implement technology to achieve process efficiencies by reducing effort, cycle time, and costs

5. 5 Phase I Key Accomplishments Efficiencies - 92% of all purchase orders created, approved, and electronically transmitted to suppliers in less than one hour Utilization - 54% of purchase orders issued to the 32 Penn Marketplace suppliers (25,000+ in supplier database) and 42% of invoices received via EDI Cost Savings - $67 Million in documented hard dollar product & service cost savings Compliance - 78% reduction in maverick buying

6. 6 Phase II Business Objectives Enhanced Penn Marketplace - implement SciQuest hosted Penn Marketplace on January 5, 2004 Supplier Enablement - increase supplier and content enablement to approximately 75 suppliers and over 3M SKUs Utilization - increase utilization rates to 70% of transactions & 50% for EDI invoices Customer Satisfaction - introduce new functionality at the point-of-demand to further streamline the buying process

7. 7 Critical Success Factors Strategic Business Partner - utilization of SciQuest’s Spend Director product, supplier and content enablement capabilities Supplier Participation - further promote eProcurement as a competitive advantage for suppliers resulting in the opportunity for a significant increase in market share Content Enablement - offer customers a combination of third party hosted content and punch-out to key contract supplier web sites Content Management - enhance buyer and supplier collaboration for management of Penn specific content & contract pricing

8. 8 Strategic Business Partner Implementation of SciQuest’s Spend Director product provides new and enhanced functionality Individual & Corporate favorite lists Quick order functionality Robust search capability Online configuration and searching for researchers Ability to “private label” site presentation and terminology

9. 9 Supplier Participation Competitive advantage for Penn Marketplace suppliers Participating suppliers enjoyed a 16 to 42% increase in business in 2002 Product exposure to all buyers within Penn Effective platform for internal web based marketing of new products and promotions Positions minority-owned and small businesses on a level plying field with major suppliers

10. 10 Content Enablement Opportunity for Penn to significantly increase product & service offerings Hosted content for low turnover product catalogs Punch-out to configurable suppliers & high volume – high turnover product catalogs Line item attributes for “preferred product”, “supplier diversity” and “green products”

11. 11 Content Management Streamlined process for managing supplier content SciQuest provides web based administrative tools for reviewing & approving new supplier content Quicker approval of changes to existing supplier content Helps ensure compliance with terms of supplier pricing agreement

12. 12 Conclusion At Penn, the successful adoption of eProcurement & significant ROI has been realized by the…. campus wide utilization of eProcurement buying tools increased customer satisfaction with redesigned business processes and recommend suppliers reallocation of central resources to value added activities success of strategic supply chain and cost savings initiatives

13. 13 Contact Information Ralph Maier Associate Director, Purchasing Services University of Pennsylvania Phone: (215) 898-1452 E-Mail: maierr@pobox.upenn.edumaierr@pobox.upenn.edu Internet: www.purchasing.upenn.eduwww.purchasing.upenn.edu