Tradeshift CFO in the cloud

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Tradeshift hosted a series of 'CFO in the cloud' events - breakfast seminars where CFOs could get insights into the latest in e-invoicing, early payments, and Tradeshift's unique approach and network.

Watch the short video from the London event after the final slide.

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  • WelcomeThanks for comingSpeaker presentation
  • In 2011 the problem of paper has not beensolved, in fact the opposite has happened. It’sironicactually, as weget more and more advanced computer systems to run our business, to do ouraccounting or workflow but we still feedthese systems a steadystream of paper, invoices from business partners, purchaseorders and delivery notes. The majority of our business transactionsare still paperbased. A streamthat has been growing proportionally and which is now out of control for most companies.
  • Agenda08.00 Registration starts08.30 Breakfast served09.00 Presentation starts - LAM
Research Findings09.45 CFO in the cloud: The Tradeshift business model, free e-invoicing, universal activation and the network effect + CloudScanAGI (London & Dublin), MSW (Amsterdam),  MBR (Frankfurt), KBU (NYC and Dallas), MHB (Copenhagen), LCA (Paris)10.15 Instant Payments - LAM10.30 Questions - LAM & AGI10.45 Close - LAM
  • Founded on the back of easytradeThenInvited to EU to do Pepol
  • Background on research: In January we commissioned some research from Vision Critical. We surveyed almost 1000 financial decision makers across 6 countries across Europe and the US to get their thoughts on e-invoicing and more.
  • 86% are under greater pressure to manage business costs54% of invoices still have to be scanned or inputted manuallyOnly 8% said their e-invoicing system was very satisfactory63% agree e-invoicing adoption would be widespread if it free to all suppliers
  • One look at the newspapers over the last few years will tell you the world is in the midst of a financial meltdown. This is a meltdown that has ravaged businesses of all sizes.And it is perhaps one of the underlying themes that runs throughout the research we conducted.
  • So, despite these findings, it is perhaps surprising to find there are areas within the finance department where inefficiencies clearly still lie.
  • While we know logically that e-invoicing is a natural next step for finance departments, it’s fair to say it has failed so far in keeping customers happy.
  • Considering the finance department hasn’t moved forward in this direction in the way that many other business units have, the potential for transformation is enormous - and crucially the appetite is there.
  • You’ve heard the research, now here’s our solution. A manifesto to turn e-invoicing on its head and make it the innovative technological solution that has been long-promised.
  • Hand over to Alan
  • The effect of this constant deluge of paper has never been properly analyzed. Parts of it have been looked at, but never as part of the total ecosystem. We know that the cost of handling one invoice is $20 USD or around 24 minutes, but what about phone calls to follow-up on a mistake, suppliers calling about the status of the invoice? Shared service centers have been established to do nothing else, other than typing paper into computer systems. What about the lag all this paper causes, is your data up to date when you analyse it, or is there at least 14 days delay from waiting till the newest generation of invoices, orders etc are typed in manually. Today you want to be able to react real-time to changing business demands, that require real-time data, not shipping them around the world or to be manually processed in a shared service center. Some facts on the real cost of paper
  • In 2011 the problem of paper has not beensolved, in fact the opposite has happened. It’sironicactually, as weget more and more advanced computer systems to run our business, to do ouraccounting or workflow but we still feedthese systems a steadystream of paper, invoices from business partners, purchaseorders and delivery notes. The majority of our business transactionsare still paperbased. A streamthat has been growing proportionally and which is now out of control for most companies.
  • In 2011 the problem of paper has not beensolved, in fact the opposite has happened. It’sironicactually, as weget more and more advanced computer systems to run our business, to do ouraccounting or workflow but we still feedthese systems a steadystream of paper, invoices from business partners, purchaseorders and delivery notes. The majority of our business transactionsare still paperbased. A streamthat has been growing proportionally and which is now out of control for most companies.
  • Our business model is simple. We don’t sell transactions we sell a service and we never charge to send invoices. You pay a flat rate for access to our cloud platform, depending on which features you need. We never charge suppliers and we never, take a cut of transactions, no matter how much we save you. We believe this is the easiest and most transparent way to deliver value to you.Our end goal is to build a network for global trade, where all companies can participate, that is also why we see your suppliers as valuable members and just as we do for buyers we will be offering a range of value added tools for suppliers on top of the free offering. Our mission is deliver
  • Tradeshift do things differently. We never charge your suppliers, because we know that in the end, this cost will always come back to you and in the process it will limit your business case as suppliers resist high prices and simply don’t connect with you. Our goal is always to connect all of your suppliers, not twenty percent. Not only because of the cost-savings of getting more in digitally, but to enable full supply chain relations digitally, everything from comments, document statuses and master data flow through the Tradeshift network. You can even build your own apps to extend your business processes or enable new collaboration areas with your suppliers.
  • ----- Meeting Notes (16/04/2012 10:52) -----change graphics
  • Background on research: In January we commissioned some research from Vision Critical. We surveyed almost 1000 financial decision makers across 6 countries across Europe and the US to get their thoughts on e-invoicing and more.
  • Tradeshift CFO in the cloud

    1. 1. CFO in the Cloud Tuesday, 24th April 2012 Copenhagen
    2. 2. “Don’t think about electronic invoicing as your goal, it is about automating your accounts payable processes where there is true collaboration and automation, then they can contract timescales and renegotiate payment terms. 2012 is the year for e-invoicing.” Pete Loughlin, Purchasing Insight
    3. 3. Today’s AgendaE-Invoicing Manifesto: Results of the surveyCFO in the cloud: Tradeshift business model, free e-invoicing, universalactivation, and the network effect. NEW: Tradeshift CloudScan ®Tradeshift Instant Payments: Supply Chain FinancingQuestions & Close
    4. 4. About Tradeshift At Tradeshift we have the ambition to change the waybusiness is done by allowing organizations to exchange invoices for free. We connect businesses to all their suppliers andcustomers regardless of company size, not only saving time but also ensuring they get paid faster at both ends of the supply chain.
    5. 5. It is proven• In less than 18 months Tradeshift has spread to 190 countries• Gained more than +90,000 companies• Today Tradeshift is the fastest growing business network with more than 2000 companies joining each week• Customers include:
    6. 6. E-Invoicing Manifesto
    7. 7. Four Key Findings1. Business is increasingly tough2. Invoicing puts a massive strain on a finance department3. E-Invoicing has failed to offer a solution4. E-Invoicing is ready for the
    8. 8. Business is increasingly tough
    9. 9. Pressure & Supplier Relations Pressure The majority (65%) of financial decision makers said they are now under greater pressure than ever to manage costs. Supplier Relations 78% said they are very important to their business and 72% said they are even more important because of the economic outlook.
    10. 10. Business is increasingly tough Heart of the organization 74% of finance decision makers reported that an inefficient finance department is a threat to the businesses as a whole.
    11. 11. Invoicing puts a massive strain on a finance department
    12. 12. Finance inefficiencies421,000 invoicesAre processed by large businesseson average every single year.48%Of these invoices still have to bescanned or input manually.Total of 202,080 invoicesEqual to 48 employee hours per week.
    13. 13. E-Invoicing has failed to offer a solution
    14. 14. E-invoicing has failed to keep customers happy Only 12% Said their current solution was very satisfactory. Efficiency and cost Are the biggest barriers to becoming a universal solution. 57% agree that adoption would be widespread if it was free to suppliers. 47% think its pointless E-invoicing is pointless without widespread supplier adoption and addressing. These barriers are going to be key in reaching that stage.
    15. 15. Finance is ready for the revolution
    16. 16. Finance is ready for transformation 60% Social media Think social media could be used in their department to improve relationships with customers and suppliers. 48% P2P processes Think that P2P processes will move to the cloud in the next year.
    17. 17. Summary
    18. 18. CFO in the cloudTradeshift Business Model
    19. 19. The cost of one piece of paperOn average it takes 24 minutes to process one paper invoice, costing from11€ to 31€ each10% of all invoices issued contains mistakes, 10% to 40% of invoices aredisputed and 96% of all companies have re-issued invoices the last yearOn average companies get a phone call for every 1 out of 10 invoices with themost common question “Have you received my invoice?”Paper is out of sync. It typically takes more than 5 days before paper invoices areregistered and up to 14 days before they appear in management reports12,000 paper invoices cost the environment 57.6 trees, 14.4 tons of Co2and 180.000 liters of water
    20. 20. So this is a huge problem, why hasnt it been solved?
    21. 21. The history of business document exchange Tradeshift goes viral, becomes worlds fastest growing business network with more than 2011 90,000 companies in 190 countries Tradeshift is launched as the worlds first business cloud mixing financial 2010 transactions and social network functionality Tradeshift founders works with the European commission to create cross-border standards for e-business in Europe 2008 Tradeshift founders launch worlds first free e-business network, 10 months later 25% of all Danish companies have joined 2007 First pure electronic invoicing networks appear 2002 First internet trade portals appear with 1998 limited success Scanning and OCR become a solution outside EDI, but still very error prone 1995 Electronic data interchange takes off 1990 among very large companiesInvoice printing gets automated 1950
    22. 22. Facts about existing networks• Very rarely is supply chain adoption High supplier over 5-10% due to high costs to costs suppliers• The “soft” part of the business Vendor Low adoption process like phone calls and email is lock-in Where do the typically more than 25% of the total costs go? business cost which are not covered by the existing networks Supply chain• These networks typically get 70%+ pressure Poor business case of their revenue from their suppliers, this creates a massive barrier for adoption• How much cost do you want to push down the supply chain?
    23. 23. We believed it was time to take a freshapproach, to do something completely different. That’s why we created Tradeshift.
    24. 24. Our business model Free transactions increase participationWhich reduce cost Which increases theand increase value network effect for both suppliers and customer Creating better supply And increase the chain relations customer business case
    25. 25. Why Tradeshift is different• There are no barriers to join, all companies can sign up and start using Tradeshift for free.• You connect with companies just like you connect with colleagues on LinkedIn• Buyers and sellers can interact and collaborate real-time• They can extend all business processes by installing or building their own apps• Companies are inviting other companies to join the network as everybody gets value from participating
    26. 26. Tradeshift is Viral
    27. 27. The TradeshiftBusiness Cloud
    28. 28. Imagine that you never had toreceive a piece of paper again
    29. 29. We did… and we called it Tradeshift CloudScan
    30. 30. What is Tradeshift CloudScan• It’s an automatic cloud based OCR service that can read anything• It is seamlessly integrated with Tradeshift’s business network, no separate products to configure or install• It uses the network to ensure that all handling of exceptions happens on the supplier side, which means no work for the buyer
    31. 31. How does Cloudscan work?1. Tell your suppliers to send all invoices as PDFs or pictures to bigco@cloudscan.ts.tt
    32. 32. How does Cloudscan work?2. Before the invoice can be delivered to BigCo the supplier needs to provide the missing data.
    33. 33. How does Cloudscan work?3. The CloudScan service will automatically convert the documents into XML and create aTradeshift account for the supplier where they then are able to validate their invoice
    34. 34. How does Cloudscan work?4. The supplier are guided through the process of filling in the missing data - Based on BigCo’sbusiness rules
    35. 35. How does Cloudscan work?5. When the supplier has validated the invoice – they press validate and Tradeshift delivers itconverted into a 100% pure e-invoice
    36. 36. How does Cloudscan work?6. The supplier is offered (free of charge) to join the Tradeshift network
    37. 37. How does Cloudscan work?7. We guide them through in very easy steps which enables them to send 100% pure e-invoicingvia the Tradeshift network
    38. 38. Respected Comments “Its supplier onboarding without the pain of onboarding. How novel!” March 8 2012, Jason Bush – Spendmatters.com There’s a little bit of genius behind Tradeshift’s CloudScan. March 7 2012 Pete Loughlin– Purchasing InsightsToday, Tradeshift launched CloudScan®. It is asuperb piece of technology and processinnovation that takes the concept of the hybridmodel of e-invoicing to the next level. March 6, 2012 Pete Loughlin– PurchasingInsights
    39. 39. Tradeshift Instant PaymentsPresentation for CFO in the cloud Copenhagen 24th of April 2012 Lars Rolf Jacobsen VP Financial Solutions lrj@tradeshift.com
    40. 40. The problem we want to solveArm-wrestling DPOs with the Buyers… Financing is a scarce and expensive resource… Buyers and Suppliers have a conflict of interests  SME’s lack access to affordable financing Working capital optimization based on own  Banks reduced corporate lending and overdrafts interests due to the financial crisis / debt crisis Buyers funding cost typically lower than suppliers  SME’s insufficient liquidity reduces growth and increases bankruptcy risk Transferring working capital from Buyer to Supplier decreases value holistically
    41. 41. Instant Payments product portfolio Enterprise driven solutions Non-enterprise driven solutionsSupply Chain Finance Receivable exchanges  Additional funding source Supplier funding  Increase DPO’s and release  Supplier are offered  Approvals and ratings provided based on Buyers working capital to sell invoices at 3rd Tradeshift reduce funding cost credit rating  E-invoicing adoption party marketplaces Funded via bankDynamic Discounting TS Instant Payments  Additional funding source Supplier funding at a  Increase return on excess  Supplier are offered  Data driven approach can discount decided cash position Instant Payments of reduce funding cost by the buyer  Price to opportunity selected invoices  High convenience Buyer funded  E-invoicing adoptionP-cards  Reduce cost of AP handling Tradeshift acts as  Kick backs Master Merchant for  E-invoicing adoption suppliers Buyer pay via pre approved p-cards
    42. 42. Tradeshift Instant Payments at a glance  Suppliers rely on bank financing, which is scarce and expensive  Large corporations reduce working capital by forcing Suppliers to extend paymentsInstant Payments terms (avg. DPOs are now 51 days) creates value  Instant Payments reverse the destroyed value by offering suppliers to get approved receivables paid instantly at a competitive discount (win/win)  Buyers can reward reliable Suppliers and create further incentive for them to join e- invoicing Benefits both  Could serve as a tool for improving Buyer’s DPO’s and reduce working capital - without Buyers and destroying value for the suppliers the Suppliers  Could create a risk-free investment opportunity to Buyers at attractive rates of return  Suppliers get access to vital working capital funding by adding an additional funding source – easy operated in the Tradeshift user interface  The e-invoicing on boarding provides an ideal opportunity to launch Instant Payments Makes good  Campaign driven approach to e-invoicing allows a reach, which is second to nonesense to launch  Addressing the entire supply chain (not only the top 1-2%)together with e- invoicing  3rd party funded supplier funding can be provided via a bank independent platform  No separate portal and fully integrated in e-invoicing product
    43. 43. The Supplier can easily claim themoney instantly – on a case by case basis…
    44. 44. Onboarding process can be implemented in existing 3 step flow Pre-activation communication Activation Non-activated reminders Launch EmailThe websuppliers 1) Register Launch mail not opened Email 1 Email 3 Pre-launch landing page 2) Connect Registration incomplete Information campaign 2Integration 3) SCF activation Paper invoice sentsuppliers Webinar 1 Webinar 2 Webinar 1 Webinar 2 (Commercial) (Technical) Marketing and sign-up for program integrated in awareness campaign and sign-up flow
    45. 45. Illustrative Supplier onboarding flow1 2 3
    46. 46. Launch Instant Payments with Tradeshift  Optimize working capital and increase the return on excess cash  Improve supplier relationships and support their funding needs  Reduce costs and increase efficiency in payment processing Increase e-invoicing adoption across the entire supply chain by offering Instant Payments
    47. 47. Questions & Close
    48. 48. Thank you

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