CTS Webinar

Cash Management Challenges and How Technology Can Help you Achieve Financial and Operational Efficiencies

Transaction Services

René SchuurmanCitibank - CTSGlobal Product Manager, Connectivity Services+1 312 876 3383rene.schuurman@citi.com

Bala RamSAPProduct Manager, Financial Services Network+1 408 310 2124bala.ram@sap.com

The speakers

Cash Management Challenges and How Technology Can Help you Achieve Financial and Operational Efficiencies

The objective

Corporate treasurers need solutions that help them balance the changes in the operational and credit risk in their banking footprint, deliver agility in their ability to support the goals of the underlying business and allow for continued cost reduction while increasing efficiency. The value of these solutions is often driven by how integrated they can be between their corporate ERP and their bank.

The SAP Financial Services Network is an innovative on-demand solution designed to simplify corporate interaction with financial institutions and to address this need. The network will be hosted by SAP and will include bank routing, data transformation, on-boarding, provisioning, and monitoring capabilities as well as provide access to the analytic capabilities embodied in SAP HANA based architecture. Please join us to learn how this solution can help your business and to provide your views and feedback on what capabilities add value.

3

Today’s environment

Diminished Credit GlobalizationDigitizationChanging Consumer Behavior Focus on StandardizationRegulatory Changes

1. Key Trends

What does this mean for you?

Employ a more integrated view of working capital management and look to manage DPO/DSO

Broaden payments channels and methods in alignment with evolving market trends

Review banking relationships, IT systems, and organizational structure

3. Best Practices & Toolkit for Change 4. Return On Investment

Diagnostics Working CapitalManagement

Analytics/IT Infrastructure

Banking Rels.Org. Structure

Standardization Information Exchange

Network Access Controls

2. Impact on Receivables and Payments

Increasing centralization, standardization and automation

Unlocking trapped cash Improving Earnings Per Share, Cash Conversion

Cycle, Inventory, Days Payable/Sales OutstandingEnhancing relationships with clients and

competitive positioning

4

Beyond Connectivity – Process Benefits

When working with multiple banks: Differences in bank-specific data requirements

and formatsWhen managing your bank account balances:

Time to reconcile bank statement with actual payment activity

Time taken to reconcile bank fees with actual usage of services

When sending payments: Consolidating payment activity across

departments/business units Accurate payee information to reduce

rejects/inquiriesWhen receiving payments:

Time taken to obtain missing information to process payments

Number of payments that cannot be matched to a specific business transaction/customer

Time to match a payment to a business transaction/customer

“What corporates value most”

“If payments had a personality, consumer payments would be the life of the party,

while B2B payments would be the introvert”

“Getting paid is not the problem .. cash may be king, but information is the ace”

“Corporate treasurers and cash managers would particularly value enhancements that

streamline data formats, improve bank services and information posting ..”

Survey of corporations of 10,000 employees or more

Extending to Corporate-to-Financial Provider Processes

Banks and Financial Institutions

Issueinvoice

Forecastcash

Financeworking capital

Resolvedisputes

Collectcash

Checkcredit

Settle& pay Reconcile

Financial Supply Chain

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Core Finance Financial Performance Management

RegulatoryCompliance and Risk

180,000 SAP Corporates

Over $12 Trillion in Spend

Market Requirements

A/P Optimization

Low Cost and Secure

Bank Agnostic

A/R Optimization

Corporate

Corporate

Banks

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Rapidly grow corporate client base

Easily offer new services

ZERO footprint at Bank and Corporate

SINGLE integration point to 1000s of corporates

Painless reconciliation

Better funds visibility and cash forecasting

SAP Financial Services Network

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Value-added Services

SAP Financial Services Network

A co-innovation of banks and corporates with SAP

Bank Agnostic

•Capabilities Shared gateway to banks, across A/P, A/R and TWS Single connection to any number of banks Bank-specific format mappings offloaded Financial message transformation and data

enrichment

•Benefits Business agility – add new banks as business

expands Freedom from bank-specific formats and mappings Reduced counter party risk

Banks

Corporates

FSN

Single streamlined transaction channel to banks

•Capabilities Integration with A/P and TWS – Send Payments,

Receive Status and Statements Virtual card support Vendor master data capture ** Ability to send rich remittance advice ** Centralized monitoring **•Benefits STP to multi-banks, non-disruptive to A/P and Treasury Rebates through card programs, pay suppliers faster

while maintaining days cash on hand Reduced payment rejections and cost of vendor support Vendor satisfaction Up-to-date visibility of payments, status and statements

Accounts Payable Optimization

** Roadmap

Banks

FSN

Vendors

Corporates

Payment Instruction

Remittance Advice

Master DataStatus, Statements

Consolidates and enables shared service

Accounts Receivables Optimization

•Capabilities Rich remittance information access from customers for

efficient postings Direct integration of bank statement and remittance

advice with A/R and TWS Centralized monitoring **•Benefits Reduce operational costs of collection Efficient reconciliation process Faster, more accurate postings and up-to-date visibility

to working capital

Banks Customers

Corporates

Remittance AdviceStatements

Integrated Statement

with Remittance

** Roadmap

Improve Working Capital Management

FSN

Low Cost and Secure

•Capabilities Zero footprint – ERP directly connects to FSN with

no additional systems Secure, multi-tenant architecture One-time setup, no additional setup as banks are

added Pay as you go subscription model for transactions

•Benefits IT cost savings in hardware, software, people Faster and cheaper integration with banks Security through isolation, each corporate gets

own instance SAP ERP

SAP Payment Factory

SAP ERP 6.0

Customers

Vendors

Payment RunF110

PaymentRunF111

Free FormPayments

Bank Statements

RFFO PMW

Corporates

FSN Connect

or

** Roadmap

FSN

The SAP Business Web

Other FSPCloud Services

Business

Other B2BCloud

Services

Business Web

Financial and Supply

Chain Service

Integration

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Financial Service Providers

Capabilities Over 900,000 suppliers, and growing

with Ariba recruitment services Automation of sourcing, purchasing,

invoicing, payment, statements and more

Master data of thousands of connected suppliers for payment accuracy

Means of communicating rich remittance advice for timely posting and reconciliation

Benefits Reach banks and suppliers through one

network Comprehensive procure-to-pay solution

Integrated FSN and Ariba Networks deliver comprehensive benefits

Planned Availability Timeline

Why Citi has joined the SAP FSN?

▲The Financial Service Network will emerge as a strategic initiative for major corporate banks to establish close relationships with their corporate customers

▲Corporates will benefit from the Financial Services Network as it delivers a bank agnostic solution which incorporates plug and play banking integration including access to partner bank value added solutions

▲This is the latest example of Citi innovation and collaboration in banking, which provides clients with access to Citi's global footprint and cash management capabilities through a single SAP Financial Services Network connection First public announcement of Financial Services Network

solution April 2012 with Citi and Royal Bank of Scotland

Questions

Thank you for your time today

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