The Future Direction of Bolero

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The Future Direction of Bolero

• UN/CEFACT Conference March 2001

Peter Guldentops
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bolero.net
WHAT IS bolero.net?

• bolero.net provides the foundation for enabling
  e-commerce in traded goods.
• bolero.net accelerates global trade, by enabling
  all parties in the trade chain to exchange
  documents and data electronically.

HOW DOES bolero.net WORK?
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The Problem
International Study

• Global cost of producing paper shipping
  documentation
• 420 billion annually
• 7 of cost ofinternational trade

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Current Fragmented Communications
Carrier
Carrier
Freight Forwarder
Exporter
FreightForwarder
Exporter
VAN
Internet
EDI
Fax
Importer
Agencies
Importer
Agencies
Courier
Proprietary
Mail
Bank
Customs
Bank
Insurer
Insurer
-----
Manual
Electronic
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The Challenge

• The Law
• electronic documents must be accepted in dispute
  resolution and fit in with legal jurisdictions

• Competition
• companies do not want to be locked into a
  singleservice provider
• Benefits
• all parties must profit
• Security
• digital security must exceed the safeguards
  available in the paper world
• Trust
• neutral third parties are required to provide the
  service
• Standards
• common technology and information standards are
  required to reduce costs and ensure
  interoperability

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bolero.net Up to Date

• Founded 1996 ( S.W.I.F.T./TT Club)
• Launched 27th September 1999
• Now 75 major customers, comprising corporates,
  b2b exchanges, logistics firms, freight
  forwarders, carriers, banks, insurance firms,
  inspections houses
• Technical relations with S.W.I.F.T., Maersk Data
  and 40 solution partners including professional
  service firms
• 93 professionals in GB, US, DE, FR, BE, HK, JP
  and AU
• 50 million VC funding from APAX, ING and Palio
  in Q4 2000

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Neutrality of Ownership
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Neutral position Governance
Users Club
Users
Users
Rule book
Users
Service Provider
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bolero.nets Unique Global Value Proposition...
Core Messaging Platform
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bolero.nets Value Proposition
Multi-lateral contractual framework
XE Neutral Compliance
Security/control over the goods
Electronic Title Registry
Core Messaging Platform
Open Commercial Model
Trust and Security
Neutral Positioning
boleroXML
Encrypted, authenticated, reliable
Value creation - corporates/inter-mediaries
Multi-network, multi-supplier environment
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Core Messaging Platform (CMP)
Messaging and acknowledgements protocol
guarantees delivery
VAS
VAS
Title Registry
Importer
Exporter
Exporter
Messaging Services
All messages are acknowledged Notifications are
provided optionally Additional acknowledgement
determine business acceptance or refusal
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Electronic Title Registry
The unique Bolero Title Registry records and
transfers rights and obligations of a Bolero Bill
of Lading.

• Authorizations
• Endorsements
• Amendments
• Instruction Management

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Bolero Rulebook

• Largest global study of e-commerce legal issues
  by Allen Overy 1998
• Embedded into CMP
• Common Legal Jurisdiction
• Multi-lateral, cross-enterprise contractual
  framework between each and all Bolero users
• Users agree to accept digital signatures and
  bolero messages
• Dispute resolution via Bolero Association

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bolero.net e-Trust and Security

• Implementation Robust Enrolment process

• Control - Private keys stored on secure key
  cards
• Enforcement - Digital certificates define user
  functionality
• Encryption - State of the art encryption
  technology
• Certainty - Digitally signatures ensure
  identity
• Validation - Authenticating document originality
• Verification - Confirmation of delivery and
  receipt
• Reliability - RL cover and SWIFT as operator

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Multiple Certification Authority approach
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bolero.net Community
Carrier
Freight Forwarder
Exporter
B/Ls Manifests
B/Ls Shipping Instructions
B/Ls Shipping Advice
POs Declaration
COs Licenses
Agencies
Importer
Customs Declaration
LC Documents
Insurance Documents
Customs
Bank
Insurer
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How bolero.net Works

Applications
VAS
ValueAddedServices
VAS
SURF
VAS
Title Registry
CoreMessagingPlatform (CMP)
Web/Managed Services
Messaging Services
Networks
IP Networks and Internet
Web Interface
Interface/SDK
Client LocalApplications
Middleware
Browser-based Applications
Stand Alone Systems
provided by bolero.net
provided by vendors
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boleroXML Dialogues
EbXML

• Common Business Language
• boleroXML
• XML DTDs
• Industry Extensions
• Standards Capitalise on Industry Initiatives
  e.g. EDIFACT, ISO

Message Standards
PAPINET
oasis
Odette 2000
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boleroSTP Core Proposition

• Common Business Language
• boleroXML
• XML DTDs
• Industry Extensions
• Standards Capitalise on Industry Initiatives
  e.g. EDIFACT, ISO

Message Standards

• Suite of Messaging Services
• Distribution Engine
• Guaranteed Delivery
• Security and Validation
• Responsibility Liability
• Legal Assurance

Messaging Services
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boleroXML Proposition

• Common Business Language
• boleroXML
• XML DTDs
• Industry Extensions
• Standards Capitalise on Industry Initiatives
  e.g. EDIFACT, ISO

• Suite of Messaging Services
• Distribution Engine
• Guaranteed Delivery
• Security and Validation
• Responsibility Liability
• Legal Assurance

Message Standards
Messaging Services

• STP Analysis (Scorecard)
• DTD Analysis Services
• Troubleshooting Services
• Supply Chain Optimisation
• Transaction Status Information
• Vendor Partnering
• Directory/Repository Services?

Value-added boleroSTP
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Example E-Collection
Payment Instruction
Payment Authorisation
Debit Advice
Presenting Bank Collection Instruction
Required Documents Attached
Transfer of Title
Payment Advice(via SWIFT)
Credit Advice
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bolero.net is a totally electronic network that
establishes a fully functional standard and
resolves the security and legal issues that
inhibit other global trade chain solutions.
The bolero.net Solution
?
?
?
?
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Testimonials
Document storage and courier costs can be
halved The whole trade cycle could be cut
down from 25 to 15 days. As a result, working
capital tied up in each shipment could be cut
down by a third The introduction of Bolero
will allow us to streamline and improve the
management of our supply chains around the
world. Marubeni
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Testimonials
From the start, the Mitsui senior management
team has been very interested in , and supportive
of, bolero.net. Not only are we expecting to
make substantial savings on internal
administrative costs, we will be able to develop
new trade and logistics based products which will
allow us to pass on value to our customers.
As an Internet-based product, we think that
bolero.net will prove accessible to a wide range
of organizations, and we fully expect it to
become a de facto standard for the electronic
exchange of business and trade information in the
near future.
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Testimonials
Bolero provides the means to integrate current
services by improving cross border settlement
business, automated reconciliation and higher
cash management services. It also opens up new
business opportunities in terms of services that
we can deliver to our customers. Banks that
dont take Bolero on board, risk being left out
of settlement business related to future trade
transactions. Sanwa Bank, Tokyo
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Participating Banks in the bolero.net Community
Korea Exchange Bank
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Participating Drivers/Exchanges in the bolero.net
Community
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Some of the Enablers in the bolero.net
Community...
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Example Sun and bolero.net
    
Sun Microsystems and bolero.net have announced
the signing of a joint agreement that will lead
to Sun developing a product that allows
connectivity to bolero.net's global e-business
infrastructure. Sun's i-Planet subsidiary will
create a bolero.net Java plug-in for its
"Trustbase" suite that will allow Sun customers
to directly connect to the Bolero System and
exchange trade data and documents with their
international business partners. Sun
Microsystems will additionally promote bolero.net
to customers at e-business related seminars and
conferences.
Sun / bolero.net announcement
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Recent Implementations

• FNC
• Otto Versand/Grattan
• Rio Tinto
• Emetra
• Samsung Electronics
• Tate and Lyle

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Implementation Methodology Approach
Life cycle of implementation Stages over TIME
REVIEW PLAN
REVIEW PLAN
CONTRACT
Customer Focus
PHASE 1 Live Messaging
PHASE II Interoperability
PHASE III STP (Straight Through Processing)
5 Project Phases
5 Project Phases
5 Project Phases

• Phases will be customised according to the
  appropriateness for each client

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Implementation Profile FNC Chain

• Live messaging 5 weeks after enrollment
• Paperless on shipments using bolero
• Title electronically transferred
• Document cycle 25 days to just over 24 hours
• Expanding use of documents
• Trade chain members initiated using Starter Pack
  (free standalone payable support)
• Allows time for evaluation of applications for
  back-end integration and enterprise-wide
  solutions)

SAP/R3
SYSTEM
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Implementation Profile Otto Chain

• Cascading Implementation Plan
• Completed successful dry run on initial
  implementation leading to 11 supply chains to
  Hong Kong and Singapore
• Standardized Bolero documents sent between Hong
  Kong, Germany and United Kingdom
• Planning for second and third waves of
  implementation underway

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bolero.net and b2b Exchanges
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b2b Implementation profile EMETRA
The EMETRA Document Centre powered by bolero.net
Merchant Traders
Warehouses
Producers
Inspection Companies
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Evolution of bolero.net?
Multi-CAs e.g.
Leading b2b Exchanges
Sellers
Buyer
Sellers
Buyer
Buyers
Sellers
Banks
Title Registry Application
Carriers
SURF
Insurers
New Applications
Others
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SURF is a standard vehicle for handling trade
settlement within an electronic environment.
SURF

• Supports varying degrees of risk
  intermediation/financing.
• Complete transaction visibility in one place.
• Allows banks and corporates to build on existing
  business relationships.
• Fully automated providing fast and predictable
  trade settlement.
• Trusted and secure.
• Supports compliance checking.
• Offers opportunities for new financial services.
• Supports b2b exchanges with SSDs.
• Identrus /Eleanor Group involved.
• Pilot testing May 2001 intended roll-out July
  2001

Deutsche Bank
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How does SURF work?
10. Fund transfer
8. Payment confirmation
4. Lodging of undertaking
6. Request for payment
SURF
5. Presentation of documents
11. Credit advice
7. Payment instruction
2. Lodging of the agreement
3. Acceptance
9. Release of documents
1. Establishment of sales agreement
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Functionality

• Complete visibility of transactions in one place
• Manages the workflow associated with settlement.
• Provides a central database for storing the
  mutual agreement.
• Interfaces with the Bolero Title Registry.
• Automatic compliance checking of documents.
• Facilitates the handling of discrepancies.
• Provides reconciliation reports.
• Supports partial shipments.
• Supports b2b exchanges effecting settlement for
  their members.

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What Makes bolero.net Unique?
Cross Industry Global, Neutral
Trusted 3rd Party
Guaranteed performance
Open Commercial Model
Rule Book Legal Framework
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Strategic Value Creation

• Improved efficiency
• Faster document and ship turnaround no
  demurrage
• Straight through processing reduced rekeying
  time/errors
• Shorter order cycle times and use of draft
  documents
• Cost reduction
• Electronic data transfer eliminates courier/telex
• Reduced working capital less stock, cheaper
  funding costs, faster payment under export L/Cs
• Entire in-house document processing with ERP
  integration
• Increased customer loyalty
• Opportunity to control the full trade chain
• Value added services
• Effective strategic decision making
• Data mining with quickly available, complete data
  sets
• Improved technical and legal security

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General Benefits of bolero.net

• Transparency
• Speed of movement of documents
• Accuracy
• Greatly improved operational risk management
• Improved cash flow
• Economic and structured implementations
• Track and trace

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The Benefits of bolero.net

• Lower Operational Costs and Expenses, e.g.
  phone/fax
• Improved Time Management
• Reconciliation/Checking Time Reduction
• Automation and Integration
• Reduction in Processing Errors
• Full Straight Through Processing of All
  Documentary Work
• Improved Risk Management - Country, Customer
• Centralization and accelerated information flow
• Shorter transaction life, less risk
• Greater security, reduced fraud
• Improved Customer Relationship Management
• faster management information flows
• innovative and directly value adding
• Innovative approach for new business development
• ReIntermediation of International Trade Finance

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The Benefits of bolero.net ctd.

• Platform for Future Value Added Services
• Credit Services
• Faster turnover of Credit Limit
• On-line risk participation and distribution
• Cash Management integration
• Stock finance oriented services via Title
  Registry - securitisation
• Improved cross-selling with faster management
  information
• Trade Finance - Automated Delivery
• End to End Automation, with more reconciliation
  detailfor customers
• Factoring, Credit Insurance
• bolero inside
• Automated Reconciliation for Services using XML
• Outsourcing and insourcing opportunities
• Development of Services Based on a Trusted
  Partyand Security

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The Benefits of bolero.net
Corporate PerformanceROCE, ROE, ROIShareholder
Value
Corporate PerformanceROCE, ROE, ROIShareholder
Value
CapitalEmployed
Net Income/Net OperatingIncome
CapitalEmployed
Expenses and Cost of Goods Sold
Working Capital
Fixed Assets
Working Capital
Inventory
Revenue
Cost of Goods Sold
Expenses
Accounts Payable
Accounts Receivable
Accounts Payable
Accounts Receivable
Inventory
Revenue
Cost of Goods Sold
Expenses
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The Benefits of bolero.net