Facilitating Adoption of PIDX Standards by Small and Medium Size Suppliers PIDX Spring Meeting Houst

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Facilitating Adoption of PIDX Standards by Small
and Medium Size SuppliersPIDX- Spring Meeting
Houston 03/11/2008Jean-Pierre FoehnCEO Amalto
Technologies
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IntroductionAmalto Technologies

• Amalto Technologies is a software and service
  provider, created in 2005
• Present in France (Paris) and in the US (San
  Mateo, CA)
• Focused on Master Data Management, B2B exchanges
  integration
• Team cumulated experience
• marketplaces 15 years
• e-procurement / e-business in large
  organizations 10 years
• OG 20 years
• Software development 20 years
• Some references

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Agenda

• An unbalanced value proposition
• The challenges for Dixie Electric
• Solution for high volume transacting suppliers
• Solution for medium volume transacting suppliers
• A balanced value proposition

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An unbalanced value propositionA typical
supplier distribution for an OG Operator
Supplier Tier
10 000s suppliers
(1 000s) 100s 10s

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An unbalanced value propositionAdoption of PIDX
standards should not be a burden for suppliers

• Large OG organizations derive a lot of value
  from automation of b2b exchanges and the adoption
  of PIDX standards by their suppliers
• Automation and adoption of PIDX standards should
  be easy, quick and at limited effort and cost
  for suppliers
• Adoption rate by the suppliers is directly
  related to
• The commitment of their customers
• The easiness to implement the solution proposed
• The value they will derive out of adopting the
  new process (reduced DSO, )
• In conclusion, success relies on a Balanced value
  proposition for both parties
• Posting invoices on a portal is not a good
  approach for suppliers
• Investing in a sophisticated IT solution, does
  not make sense when the volume of transactions is
  limited
• The supplier business is not to learn PIDX
  standards but to adopt them

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An unbalanced value proposition3 mains
challenges to enable b2b transactions for a
supplier

• Managing the Network
• Establishing connectivity Opening Firewall,
  Identifying the right Port
• Managing the Security
• Certificates getting them and maintaining them-
  difficult and expensive
• Self generated or through third party (100s )
• Mime Envelops allow transport of attach
  documents like field tickets- difficult
  documentation- no downloadable software to
  generate an envelop
• RNIF for each XMl document transported , 3 extra
  documents to be inserted in the envelop
• AS2 envelop Mime encryption signature
• Managing the Standard
• PIDX how to create a PO or an Inv in PIDX
  format- how to attach a field ticket ?

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An unbalanced value propositionwhat it takes for
a supplier to get enable with an OG Customer

• The main issue managing the envelop and getting
  / managing the certificates
• The second issue being compliant with your
  customer specific requirements
• SAP vendor ID
• Cost center
• Contact ID
• Effort to Golive
• (Finding a PKI Java developer)
• Building the RNIF envelop 5 to 10 days
• If AS2 10 to 20 days
• Mapping the fields 5 to 15 days
• Overall 10 to 30 days
• ( not including time spent on back-office
  integration when appropriate)

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Agenda

• An unbalanced value proposition
• The challenges for Dixie Electric
• Solution for high volume transacting suppliers
• Solution for medium volume transacting suppliers
• A balanced value proposition

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The Challenges for Dixie ElectricIntroduction to
Dixie Electric

• Dixie Electric specializes in five industries
• Oil field electrical construction and maintenance
  
• Wind-generation construction and maintenance
• Industrial electrical supplies (serving the oil
  gas, and wind-generation industries)
• Natural gas automation
• Utility distribution, transmission lines, and
  power substations
• Dixie Electric main customers are
• Chevron, ConocoPhillips, Oxy, Pioneer Natural,
  XTO Energy.
• Electronic invoicing for some of them will be
  handled by DO2 (Digital Oilfield).
• Dixie Electric, provided with an accounting
  system manufactured by Distribution One, can
  generate its own XML invoices
• Dixie Electric send tens of invoices per week

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The Challenges for Dixie ElectricConverting and
sending invoices in PIDX format with various
envelops
PIDX-AS2HTTPS
PIDX-RNIFHTTPS
PIDX-RNIFHTTPS
DistributionOne Accounting Software
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The Challenges for Dixie ElectricWhat was Dixie
Electric looking for

• Dixie Electric was more than willing to adopt
  PIDX standards used by its main customers but
• Was not willing to disrupt its current process
  (internal XML format generated by the ERP)
• Had no expertise / resources to mapping XML to
  PIDX
• Was looking to be live as quickly as possible
• Was seeking for a solution that could evolve
  through time ( new customers, new documents,..)
• And reasonably priced (setup and run)

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Agenda

• An unbalanced value proposition
• The challenges for Dixie Electric
• Solution for high volume transacting suppliers
• Solution for medium volume transacting suppliers
• A balanced value proposition

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Solution for high volume transacting supplier A
packaged solution enablingB2B exchanges and
back-office integration

• A ready-to-use solution for integrated B2B
  exchanges
• electronic exchanges of business documents
  (quotes, orders, invoices) with multiple trading
  partners in multiple formats
• integration with any back-office system
• A solution that can be completely packaged
  hardware, software and service,
• A solution that can be set up in a very limited
  timeframe and is available at a highly
  competitive price
• A solution that can evolve to accommodate
  changing needs, thanks to downloadable plug-ins
• new trading partners, new business document
  types, new protocols, new back-office systems...
• A solution that can be remotely monitored by a
  third party

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Solution for high volume transacting supplier
The solution proposed to Dixie Electric by Amalto
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Solution for high volume transacting supplier
Fast launched B2B exchanges system integration
You receive your b2box and plug it in (power and
network)
B2B exchanges with business partners
Your b2box is set up (routing rules, trading
partners IDs and if needed partner specific
mappings)
B2B exchanges in a few days
You can start exchanging business documents with
your trading partners
System integrationin a few weeks
Back-office systems integration (if necessary)
Amalto collects your back-end system integration
specifications
Amalto develops your specific back-end adapter
Amalto installs the adapter as a plug-in in the
b2box Back-end integration testing is completed
Documents are issued from and integrated into
your back-end system
One month from start to full go-live
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Solution for high volume transacting supplierA
customized b2box with a PIDX central pivot
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Agenda

• An unbalanced value proposition
• The challenges for Dixie Electric
• Solution for high volume transacting suppliers
• Solution for medium volume transacting suppliers
• A balanced value proposition

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Solution for medium volume transacting
suppliersa lighter solution for Tier 3 suppliers

• There are organizations/trading partners, which
• exchange a limited number of business documents
• Do not require back-office integration
• Generate their invoices in CSV format
• Need to send PIDX documents to their OG
  customers
• are not likely to see a ROI on a complete
  automation solution and therefore need a solution
  even cheaper than the b2box
• Amalto can propose a solution coupling
• a light software (called b2een client)
• to be downloaded and easily installed
• which is able to exchange electronic documents
  with a hub b2box, using a secured protocol
• which provides a web user interface enabling the
  display or creation of electronic documents
• a hub b2box, hosted and operated by Amalto, which
  performs routing as well as message
  transformation to PIDX format and validation

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Solution medium volume transacting suppliersfrom
CSV to PIDX/ RNIF with b2een
MVT supplier
OG Corporation
Amalto
Tier 3 supplier
Tier 3 supplier
CSVSSL
PIDX-RNIFHTTPS
b2een
DMZserver
externalfirewall
e-procinternalfirewall
hub

• Supplier outbound flow
• CSV files and supporting documents posted in
  adhoc directory
• b2een validation (level1) and routing of payload
  to b2box in SSL format
• b2box validation (level2), transformation to
  PIDX-RNIF or AS2 and routing to OG Corp.

• Supplier inbound flow
• OG Corp. sends functional Acknowledgement
• Acknowledgement is routed via the b2box to
  supplier and directly posted in adhoc directory

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Agenda

• An unbalanced value proposition
• The challenges for Dixie Electric
• Solution for high volume transacting suppliers
• Solution for medium volume transacting suppliers
• A balanced value proposition

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A balanced value propositionLarge Corporation
can PIDX enable all their suppliers
Large corporation
HVT supplier
Tier 2 supplier
Tier 2 supplier
ERP 1
ERP or anyback-office system

• Hub, marketplace, network

EAI
ERP 2
MVT supplier
Amalto
Tier 3 supplier
Tier 3 supplier

ERP n
b2een
b2een
PIDX/RNIF or PIDX/AS2
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A balanced value proposition Potential savings
associated to migrating suppliers to PIDX
invoices with a b2een type solution

• By providing an easy way for suppliers to convert
  to PIDX, rejected invoice level is drastically
  reduced
• Thanks to the various intermediate validation
  levels mandatory fields are correctly filled,
  supporting documents are present,
• ROI for OG Corporation
• OG corp processes 400,000 invoices / year
  through a portal
• Total rejected invoices is around 10 of total
  invoices processed
• Number rejected invoices 40,000
• Process time to reject an invoice 15mn
• Time dedicated to process rejected invoices
  10,000 hours/ year
• Equivalent to 5 FTE

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A balanced value proposition Potential savings
associated to migrating suppliers to PIDX
invoices with a b2een type solution

• ROI for the supplier
• Saving time
• Auto-install technology (no training)
• Learning curve very short (Outlook type
  environment)
• no multiple loggings to the customer portal
  (posting invoices, retrieving acknowledgement,..)
• early validation means mistakes can be corrected
  immediately no invoice sent without field ticket
  attached
• Protecting and Developing the business
• PIDX enabled means keeping current and attracting
  new customers
• Improving the bottom line
• Reduced cost to process invoices
• Reduced DSO ? impact on working capital
• Early Notification of OK to pay? impact on cash
  flow,

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A balanced value proposition Potential savings
identified by Dixie Electric with a PIDX b2box
type solution

• Dixie Electric processes around 100 invoices/week
• Previous EDI system
• Annual cost for 2007  20914.76
• Approximate time to set up new customer about 10
  months
•  
• Dedicated PIDX solution
• Estimated annual cost  6270
• Approximate time to set up all (5) trading
  partners  about 3 months

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Reduction of Carbon Foot Print with PIDX standards

• In Switzerland, paper invoices kill 500,000
  trees/year
• 600 millions invoices sent by mail
• 1,8 billion paper sheets
• Production and shipping of mail generate as much
  CO2 as 85,000 cars
• PIDX invoices reduced DSO and reduced CO2!
• PIDX standards adoption contributes to your
  Corporate Green Objectives
• ----------
• Thank you for your attention
• Visit our booth or go to www.amalto.com