TradeCard The marketing of a next generation software application

1
TradeCardThe marketing of a next generation
software application

• June 2006

Privileged and Confidential, TradeCard, Inc.
2
Discussion Points

• The future of enterprise software - how the
  industry is trending globally, in Asia
• SaaS - what is it, how is it marketed
• Financial Supply Chain Management - trends in the
  industry
• A SaaS case study TradeCard - industry trends,
  solution definition, how the marketing of the
  solution has evolved over the past 3-5 years
• Current messaging
• TradeCard case studies - examples of how we are
  helping our customers
• QA

3
Future of Enterprise Software

• SaaS or Software as a Service
• Those services relating to the delivery to and
  remote access of software applications via a Web
  browser.
• Also called On-demand Applications, On-demand
  Software, On Demand Software, SaaS, and On Demand
  Applications
• Forrester Report extract

4
Trend to Greater Trading Partner Collaboration

• Strategic sourcing results in closer
  relationships between buyers and suppliers
• Suppliers take on more tasks in the supply chain,
  in some industries everything from materials
  purchase to design to inventory management
  buyers become pure marketers
• Collaboration extends to financial processes
  where buyers offer financial services to
  suppliers (example Supplier Financing) and
  therefore need greater visibility into whole
  transaction process
• Automation of financial processes offers vast
  opportunity for savings but physical and
  financial processes need to be connected across
  trading partners
• Buyers want to ensure that needs of customers and
  suppliers are balanced

5
Traditional Benefits of ERP Systems
A single system to support your business
Access to best practice systems and procedures
More integration hence lower costs
More "automation" of tasks
A single applications architecture with limited
interfaces
Access to management information unavailable
across a mix of applications
6
Limitations of ERP Systems

• No doubt that benefits are great but there are
  some limitations when it comes to buyer-supplier
  collaboration
• Most ERP systems automate data internally but
  external data exchange with other parties, such
  as suppliers, is limited
• Suppliers transaction processing remains largely
  manual
• ERP systems focus on automating the data
  associated with streamlining physical supply
  chains, not financial supply chains
• Multitude of different formats mean suppliers
  need to manage different formats for almost every
  buyer
• High costs and long implementation period result
  in slow ROI

Limitations mean that an ERP Systems
efficiencies generally apply only to the buyers
company the suppliers processes usually remain
manual and collaboration is limited
7
Extending the Value of Your ERP System

• Desired outcome
• Extend ERP system to other supply chain partners
  to extend their processes beyond their home base
  platform
• Integrating supply chain partners into base ERP
  system for closer collaboration
• Gain greater control of long supply chains
  necessary to handle offshore sourcing and
  manufacturing
• Standardize electronic communication and gain
  24/7 access to pertinent data and information

Extending ERP beyond the core enterprise pays off
in improved performance and reduced costs for
both sides of the trade
8
The Options

• New technologies make it possible to further
  automate without large upfront investments and
  long implementation cycles

Web-based Portals
On-demand, web-based order-to-payment systems

• Extend ERP system so that suppliers can track a
  limited number
• of documents online, such as orders and
  shipments
• Through direct integration with suppliers
• By posting pertinent information on the Web

9
Web-based Portals

• Buyer creates Web portal for suppliers to access
  wide variety of operational data
• Additional integration of various data
  transactions such as of advanced shipping notes
  can bring additional value this can be done
  through a combination of XML and EDI messaging
  formats
• Benefits
• Standardized data
• Seamless and uniform communication with supplier
  base
• Same type of paperwork for everyone saves time
  and costs

10
On-Demand Web-Based Order-To-Payment System

• Only option that connects the financial processes
  with the physical supply chain processes, I.e.
  the delivery of the goods financial supply
  chain automation
• Benefits
• Once Web-based platform is integrated into ERP
  system, both buyers and suppliers benefit from
  integration of almost the entire supply chain
  including
• document management and automated document
  compliance,
• discrepancy negotiation and management
• payment decisioning and scheduling,
• and financial services such as financing, credit
  protection and money movement
• For web-based technology, there are no upfront
  costs for software installation and this solution
  provides almost real-term ROI
• Employment requires only minimum of effort on
  both buyer and supplier-side
• integration on buyer side, and training on
  supplier side
• Extends Value of ERP system outside the company

11
Extending ERP Systems Through Integration

• Integrating selected documents and suppliers only
• Producing network function outside buyers
  business to provide data visibility
• Benefits Depending on scope of integration
• Real-time tracking and visibility of transactions
• Better insight into upcoming orders by suppliers
• Reduced material shortages
• Better long-term planning

12
Example On-Demand Web-Based Order-to-Payment
System
13
Common Platform to Move Information and Money
Enables Collaboration and Visibility
DISCREPANCY Shipped too many items
Advises goods have been loaded on board
Electronic compliance compares documents
Customer and supplier agree on purchase order
Transportation
Suppliers
Notified that debit and credit should be made
Automated Supply Chain Financing optimizes credit
through the supply chain
14
Fast and Easy Implementation
On-demand web-based FSC platform
No integration needed
Integrate with web-based platform
Supplier
15
Discussion Points

• The future of enterprise software - how the
  industry is trending globally, in Asia
• SaaS - what is it, how is it marketed
• Financial Supply Chain Management - trends in the
  industry
• A SaaS case study TradeCard - industry trends,
  solution definition, how the marketing of the
  solution has evolved over the past 3-5 years
• Current messaging
• TradeCard case studies - examples of how we are
  helping our customers
• QA

16
Convergence of the Physical and Financial Supply
Chains
Manufacture
Plan
Inspect
Ship
Receive
Invoice
Order
Reconcile
Pay
Chargeback
Increased visibility and access to real-time
information will make a greater proportion of
supply chain execution decisions opportunistic
rather then reactive
17
Our Customers Have Validated Average Savings of
1.05 of Their Total Procurement

• OPERATIONAL EFFICIENCIES
• Paperless order-to-settlement process
• Visibility into the financial aspects of your
  supply chain
• Elimination of manual re-keying errors
• Streamlined document management
• Improved trading partner relationships

• FINANCIAL EFFICIENCIES
• Payables and receivables automation
• Working capital forecasting
• Elimination of errors that delayed payments.
• Freed-up capital. New source of cash flow.
• Faster turns of credit lines. Risk management.
• Reduced bank fees
• Optimal use of credit throughout the supply chain

18
Over 1,900 Client MembersUse TradeCard

19
Reduce SGA and Enhance ProductivityTradeCard
Improves Supply Chain Agility and Transparency
Straight Through Processing and Management by
Exception

• Benefit potential supported by many benchmark
  studies
• CAPS Research estimates 1 of total sourcing
  volume spent on order-to-payment processing.
• Aberdeen Group reports a 30-60 reduction in
  invoice processing costs by automating
  reconciliation and payment.

Global Collaboration and Workflow
Extension of Corporate Systems Across the
Ecosystem
Our order-to-pay costs will be one-third to
one-half of last year..TradeCard breaks down the
wall between finance and operations Our
suppliers sometimes ship 30 to 40 times on a
single purchase order. Because TradeCard
automatically matches relevant procurement and
fulfillment documents, we really benefit from
time savings. --Senior Executive at Burton
Snowboards TradeCard helps us ensure that
factories receive the right goods in the right
quantities at the right time. This is absolute
key in our ongoing effort to optimize purchasing
and manufacturing operations. --President and
COO, Tristate Holdings
20
Reduce Credit Lines and Banking FeesWithout
Adverse Impacts to Suppliers
Reduction in Credit Line Usage and Banking Fees
by Eliminating Letters of Credit
The widespread rise in days payables outstanding
(DPO) suggests more companies are simply
squeezing their suppliers through delayed
payments or tougher terms. That can hurt a
company in the long run, as suppliers raise
prices to cover the cost of financing the
goods. --CFO Magazine (8/2005)
Reduction in Working Capital via DPO Extension
TAL Apparel forecasts a reduction of 20 MM in
working capital. --Gartner G2 "Our
businessincreased by 56 percent this past year.
Supporting this growth on 30-day terms stretched
our cash thin. Now that we can opt for five-day
payment terms, we have the cash we need to
support Burton. --President, Trak
Sports TradeCards collaborative financing is
a zero-risk investment with an above market rate
of return. --Senior Executive at Burton
Snowboards
TRAK SPORTS USA
21
Simultaneously Improve Margins and Cash Flow
Vendor Benefit Order-to-Cash Process/Fee
Savings
Optimize Capital Across the Supply Chain to
Reduce Unit Costs
TradeCard helps Columbia to monetize our entire
relationship with suppliers, so that we can
assess the cost-efficiency of our transactions.
That has enabled Columbia and our suppliers to
eliminate costs from the supply chain. Our
benefits include lower transaction costs,
streamlined procurement processes and improved
information flow. TradeCard actually gives us
an advantage when dealing with new suppliers, as
they're excited for access to early payment."
--Columbia Sportswears CFO Wolverine World
Wide estimates that it saves 20 cents per pair of
shoes. By purchasing 22.5 million pairs of shoes
via TradeCard in 2004, Wolverine is estimated to
have saved 4.5 million.
22
Sample TradeCard Transaction Flow
Supplier
Buyer
Elect Payment Protection or Export Financing
ERP
Elect Early Payment
Logistics Service Provider
Buying Agent or Other parties
Money Movement
23
Q A
24
Questions for the class

• Examples of SaaS applications being used in
  business today?
• What was the messaging that helped get them sold?
  Varies depending on who you are selling to?
  E.g. CEO, CFO, COO, CIO?
• Examples of successful technology marketing
  today?
• Hardware Global, Taiwan
• Software Global, Taiwan
• Business vs consumer what are the differences
  with the audience?
• Marketing technology - any ideas on what future
  trends will bring?