Automating Accounts Payable March 15, 2001
Automating Accounts Payable << objectives >> Meeting Objectives > Provide Thorough Understanding Of: - Direct Commerce - Solution - Architecture > Demonstrate Direct Commerce Application In The Form Of Prototype > CISCO Participation In Direct Commerce Pilot Program 2
Automating Accounts Payable << company & team >> Company & Team Mission > To provide a web-based service that automates the delivery, management, approval, and workflow routing of A/P transactions. Executive Team > Bruce Hanavan, CEO > Billy Williams, CTO > Jim Uffelman, VP of Sales and Marketing > David Bernard, VP of Engineering Executive Team > Chris Beckstead, EVP Visa > Gregg Seo, Director Inuit > Paul Dumas, Director Remedy > Colleen Brandon, COO & CFO Access Communications > Daniel Dean, VP & CTO Medical Logic 3 web-based ‘‘ and workflowtransaction applications , ,
Automating Accounts Payable << achievements Goals & Achievements 0 mo. (1/1/01) Product Design & Development $1 M Seed Round Business Milestones Product Development Architectural Platform Technical Prototype Product Specifications/UI Design Customer Focus Groups Standards Participation Corporate Organization Core Management Team (3/26) Software Dev. Team Advisory Board Seed Round Funding Corporate Infrastructure Sales & Marketing Pilot Customers (Sun Micro, VW&R) Affiliate Customers Web Site & Collaterals Trade Show Participation 4 6 mo. (6/1/01) Beta Testing & Initial Rollout $2 M - $5 M “A” round Business Milestones 12 mo. (12/1/01) Nationwide Growth $10 M “B” Round Business Expansion On-going Core Development UI Integration with Backend Application Testing Beta Implementations 2 nd Generation Products Complete: Management Team Technical Support Org. Professional Services Org. Operations Team Strategic Alliances Beta Contracts Signed 3 rd Party Licensing National Marketing Rollout Sales & Marketing Team Customer Support Group Finance/Acct. Group >> 18 mo. >
Automating Accounts Payable << a/p problems >> “Pains” in Accounts Payable Large buying organizations > Manual process > High volume of paper-based transactions > Excessive vendor phone calls > Workflow inefficiencies - routing - approvals - document > Increased department demands/ flat headcount > Too much time spent on low value tasks - mail handling - invoice entry - filing 5 ‘‘ too much time spent on low value tasks , ,
Automating Accounts Payable << solution >> Solution The Direct Commerce solution > Provide one URL to solve multiple exchanges through: - electronic invoice delivery - configurable workflow routing - document matching - infohub – self service vendor status with dialog functionality - A/P manager console – summary tool - reporting ‘‘ 6 automation and maintenance of paper-based transactions , ,
Automating Accounts Payable << a/p automation >> Accounts Payable Automation PURCHASE ORDERS Vendors INVOICES DCI Customer SAP Oracle Financials • • • 7 AUTOMATION Electronic delivery Document matching Workflow routing AP mgmt “console” Reporting WEB XML FILE Great Plains Quick. Books CUSTOM Direct Commerce
Automating Accounts Payable << a/p automation >> Accounts Payable Automation PURCHASE ORDERS Vendors INVOICES DCI Customer SAP Oracle Financials • • • AUTOMATION Electronic delivery Document matching Workflow routing AP mgmt “console” Reporting WEB XML FILE Great Plains Quick. Books CUSTOM Direct Commerce XML Vertical Market Exchange Vendors Oracle Sage Generic Financials 8
Automating Accounts Payable << a/p automation >> Accounts Payable Automation PURCHASE ORDERS Vendors INVOICES DCI Customer SAP Oracle Financials • • • AUTOMATION Electronic delivery Document matching Workflow routing AP mgmt “console” Reporting WEB XML FILE Great Plains Quick. Books CUSTOM Direct Commerce XML Vertical Market Exchange Vendors Oracle Sage EDI VAN EDI Vendor Generic Financials AUTOMATION • Customer interface • Status information • Fee based services 9
Automating Accounts Payable << a/p automation >> Accounts Payable Automation PURCHASE ORDERS Vendors INVOICES DCI Customer SAP Oracle Financials • • • AUTOMATION Electronic delivery Document matching Workflow routing AP mgmt “console” Reporting Non-DCI Customer Automated A/P Oracle SAP JD Edwards 10 WEB XML FILE Quick. Books CUSTOM Direct Commerce XML Great Plains XML Vertical Market Exchange Vendors Oracle Sage EDI VAN EDI Vendor Generic Financials AUTOMATION • Customer interface • Status information • Fee based services
Automating Accounts Payable << a/p automation >> Accounts Payable Automation PURCHASE ORDERS Vendors INVOICES PAYMENT DCI Customer SAP Oracle Financials • • • AUTOMATION Electronic delivery Workflow routing Document matching Infohub AP mgmt “console” Reporting Non-DCI Customer Automated A/P Oracle SAP JD Edwards 11 WEB XML FILE Quick. Books CUSTOM Direct Commerce XML Great Plains XML Vertical Market Exchange Vendors Oracle Sage EDI VAN EDI Vendor Generic Financials AUTOMATION • Customer interface • Status information • Fee based services
Automating Accounts Payable << proposition >> Value Proposition > Cost Savings - increase productivity while maintaining headcount - exercise vendor discounts > IT Impact - accessible from any browser - quick and low cost implementation - minimal IT support > Scalable solution supporting company growth > Elimination of low value tasks > Improved workflow options > Availability of information 12
Automating Accounts Payable << proposition >> Value Proposition Un-automated Invoices 60, 000 x $15 Automated Invoice costs 60, 000 x $ 3 (DCI) 60, 000 x $ 5 (Internal) Other savings 1% to 3% additional timing discounts on $400 M Productivity increases in payment, outbound, receiving … Intangible Benefit to customer 13 ( $900, 000 ) $180, 000 $300, 000 Work process improvements With low impact implementation > $420, 000
Automating Accounts Payable << company building >> How to Build a Billion Dollar Company DCI REVENUE CUSTOMERS Buying organization Revenues X 1 $300, 000/yr. Vendor Subscription fees 10, 000 per Buyer, 5% penetration = 1, 000 @ $50 $300, 000/yr. Installation fees Not included $600, 000/yr. X Additional Products: Payment, outbound, receiving, timely payments, vendor relationships 14 200 Buyers $120 M/Year
Automating Accounts Payable << marketplace >> The Competitive Marketplace E-Procurement Ariba, Comm 1, Claris, Rightworks, etc. EAI Vendors Active, Vitria, Tibco, Weblogic Reporting Tools Brio 15 Travel & Expense Oracle, Extensity, Concur Corporate Financial System Workforce Automation CRM Vendors Oracle, Siebel, Vantive, Clarify
Automating Accounts Payable << competition >> Competitive Landscape Company i. Payables Strengths • Accepts invoice via any technology Weaknesses • Does not publish out PO’s • Focuses on backend of the process Optika • Solution focuses on invoice processing • Heavy customization and consulting work • Imaging is part of their solution SPS Commerce • Strong Retail presence • EDI based • Does not support non. PO invoices Ariba • E-Procurement • Established market presence 16 • No focus on the settlement side Comments
Automating Accounts Payable << strategies >> Strategies The Direct Commerce business strategies Sales > Direct sales force – 9 regional sites > Indirect sales through: - strategic alliances - co-branding > Pilot and affiliate partner referrals Marketing > Targeted marketing approach - industry tradeshow presentations (IOMA, IAPP<BAAPMA) - standard boards participation (Sandia Labs) - trade journal advertising 17
Automating Accounts Payable << Strategies The Direct Commerce business strategies Pricing Model > Fee based implementation ($50, 000) > Two options: - (A) - $3 per invoice/month (includes all modules) - (B) – monthly subscription per module ($3, 000 minimum) - tiered based on invoice volume Implementation > Demo to close of sale 2– 3 weeks > Close to purchase order 2 -4 weeks > Implementation 3 weeks - outsourced vs. professional services - 24 x 7 tech support included 18 strategies >>
Automating Accounts Payable << profitability >> Path to Profitability Q 1 -01 Q 2 -01 Q 3 -01 Yr. -02 Yr. -03 114 Sales (000) Q 4 -01 8, 297 29, 376 Expenses (000) 305 853 699 1, 139 5, 900 19, 096 Net Profit (000) -305 -835 -699 -1, 025 2, 397 10, 280 Assumptions: – # of customers – Price/invoice – Avg. volume/customer 19
Automating Accounts Payable << application >> Application The Direct Commerce application > Accessible from any Browser > Direct ERP Interconnection for data Import & Export > Applications Accessible for Programmatic Access > We maintain formats, protocols, and registrations 20
Automating Accounts Payable << architecture >> Architecture The Direct Commerce architecture > Building a secure, scalable, reliable, highly functional application - use of leading technologies - Java, XML/XSL, EJB, Message Queuing, RDBMS - best of breed components deliver affordability to a wide range of companies > Industry Standards & Certifications Compliance - suntone - security reviews - standards setting bodies 21
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