Financial Fusion ~ E-Finance Wireless Leader?

WESTPORT, Conn., /PRNewswire/ -- Confirming its commitment to lead the e-finance marketplace into the rapidly emerging wireless marketplace, Financial Fusion, Inc. announced the formation of its new Web and Wireless Division along with the launch of its patent-pending Total Wireless product family - available for immediate implementation.

Financial Fusion's focus on wireless technology will allow financial institutions to provide consumers and small businesses with seamless access to important financial information. Consumers can conduct time-sensitive financial transactions such as funds transfer, bill payment, and stock trading on a wide range of popular wireless devices including Palm Pilots and other web-enabled PDAs, cell phones, and pagers. In addition, Total Wireless delivers personalized stock portfolios, one-to-one messages, news, weather, and e-commerce features. (Source: Financial Fusion)

Market Impact

Financial Fusion has formed a wireless branch of their operation to provide financial organizations, such as Old Kent, with full wireless connectivity for their clients. While Old Kent and Financial Fusion are not the first to offer wireless e-finance, the venture represents yet another step forward to the wireless age.

Financial Fusion offers a pre-packaged wireless solution aimed directly at e-finance. The package will allow a financial institution's clients access to day to day banking transactions, as well as to stock trading, quotes, sports, news and weather. The advent of wireless in the e-finance arena gives the client control. From this point forward a client can bank anytime, anywhere, without limitation. (Of course your cell phone will not suddenly start spurting out cash.)

The wireless offering will utilize existing physical wireless technology from Palm Pilot (Palm VII PDA), Nokia, Motorola, Qualcomm, and Ericsonn Wireless Access Phones (WAP). Financial organizations such as Fidelity Investments have also offered wireless access via a two-way Research In Motion Pager and the Palm VII PDA, so what makes Financial Fusion's offering unique? Simply because Financial Fusion's Stage III Architecture is based on java objects, eliminating the need to re-code HTML pages for wireless devices.

In addition, Financial Fusion's product is entirely removed from the user interface, regardless of whether the user has a PDA or a WAP, code can be written once and used across all devices without modification. Due to Financial Fusion's Java technology, the Stage III Architecture auto-detects the type of wireless device a client is using and serves multiple wireless interfaces concurrently. Wireless Interfaces include the Wireless Access Protocol (WAP), Palm Query Applications (PQA), Short Messaging Standard (SMS) and Dynamic Hyper Text Markup Language (DHTML) with Wireless Markup Language (WML) emerging presently.

The Financial Sector in a Crossroads

Ten years ago, in the mid-nineties, the financial sector faced four main challenges: market globalization, financial freedom, non-intermediation, and the importance of new technologies in business practices. Today, the first three challenges have been met, while the fourth is still being grappled with.

The fourth challenge, technology, is the main obstacle facing every financial entity—from banks, savings banks, and rural banks, to credit unions, insurance companies, and other financial intermediaries. How technology can be harnessed in the case of human resources is particularly challenging. Specifically, how can human resources be efficiently managed through knowledge-supporting technical tools.

Generally speaking, technology solutions must be used by organizations seeking to maximize human resources. Moreover management has also become more complex, or, at least larger due to the growing number of people that comprise an organization. The old concept of personnel cards, for example, has paved the road for "people management" tools. They have become necessary, particularly in an environment such as the financial sector, where resources have become global, and more complex management methods are needed to administer people.

Making functionality more professional

Also, compared to a decade ago, human resources function has become more professional and technical. Old personnel management methods evolved into human resource management and has now emerged as a modern, people management concept. This evolution is due to three decisive factors, present since the mid-nineties: the diminishing number of jobs in the market and the battle for talent; the idea that human resources are the most important asset in a company; and, the need to introduce technology with technical support. Together with the need to organize and manage knowledge about and for people, tools and solutions have been created with varying degrees of success. Most of the solutions use an extensive approach, which can be applied to every functional area in non-specialized organizations or companies. Additionally, only a few of the larger software companies have intensively focused on classical management functionalities.

Technology-based solutions that help companies to efficiently manage their resources are defined by sector. A specific activity sector, such as finances, demands solutions that have a good fit and are customizable. Solutions should be as flexible as the business is, changing with the sector, and adapting to the evolution of an activity's parameters. The financial sector also demands that implementators be responsive, innovative, and creative. In the case of human resource function, it has had to overcome an crucial obstacle: how to create joint value. This is essential for its consolidation as a core part of a business. Human resources has gone from being perceived as a secondary activity, as described by Michael Porter in Competitive Advantage, to becoming a primary activity that needs to improve to avoid being outsourced. Human resource function has reached high efficiency and effectiveness due to its professionalism. It has also been helped greatly by management tools.

Global Trade Management and Unify Financial and Physical Supply Chains?

The Internet has enabled a networked world creating a communication infrastructure and ensuing enterprise applications, all which have opened the door for global trade. This, in turn, demands multi-enterprise services and software to automate the transportation and Internet-based logistics management needs of a global trading network. As the global trade management (GTM) space continues consolidating, it is becoming clear that market leadership belongs to companies that understand that, to truly improve global trade, one must be able to manage both the physical and financial supply chains.

Communications and transportation networks have improved so dramatically over the last few decades, that even the most faraway regions and nations are within the reach through a mere Internet connection. As a result, many companies have jumped into international markets, and have outsourced their manufacturing or procurement operations to cheaper overseas manufacturers and suppliers, while some have established subsidiaries around the world. E-business promises to further shrink the world into a "global village" as people, collaboratively or not, research, offer, source, and procure products globally via the ubiquitous Web. They buy and sell through various e-commerce sites, storefronts, and marketplaces and manage international supply chains with interactive software and trading exchanges.

Logistics managers have long sought technology solutions that offer a secure Internet system for scheduling and planning and provide the maximum benefit for multi-carrier, multimode, and multi-leg shipments in an overriding business process system—one which can also handle domestic and international transactions within the logistics trading community. The Internet naturally acts as the means of communication between traders and customers, and they want these systems to deliver almost real-time information in a cost-effective manner, virtually anywhere in the world.

However, this kind of e-business has yet to surmount the challenge of global trade compliance and the diverse needs of international customers and trading partners. Simply put, most supply chain management (SCM), let alone enterprise resource planning (ERP) vendors still typically lack strong international trade logistics (ITL) and global trade management (GTM) capabilities. Simply put, while technology may render a world that appears a lot smaller, in reality, the world is a lot more complicated. There are many barriers that exist to conducting international business over the Internet, of which most businesses are ill-prepared.

Few applications really offer multi-enterprise services and software to automate the complex, multimodal transportation and Internet-based logistics management needs of a global trading network. Most modern, Web-based, buy- and sell-side applications fall well short of providing automated global trade management, and traditional international trade logistics.

As described in the article, International Trade or ITL Adoption, ITL and GTM are execution systems designed to automate the import/export business process. Their basic functional components are trade document generation and transmission, and regulatory compliance validation, and includes a complex exchange of information between multiple entities, including suppliers, carriers, freight forwarders, customs brokers, banking institutions, and other third-party transportation and storage providers. A true ITL/GTM system is an interenterprise resource management system, and requires a data model that can account for the breadth and depth of information that is exchanged between this multiplicity of interrelated entities. Thus, ITL and GTM systems should support export and import borders-crossing processes; documentation and compliance (which are incomprehensible to ordinary mortals); and accounting, and financial reporting in a multicurrency, multilingual and multi-units of measure (UOM) environment.

This is Part One of a six-part note.

Part Two will address tradeoffs.

Part Three will discuss managing global trade flows.

Part Four will note the GTM leaders.

Part Five will cover dealing with GTM complexity.

Part Six will present challenges and make user recommendations.

Complexities

While many have strong and divided opinions about globalization and outsourcing products and services, everyone will agree that these modes of business are here to stay. Some reports claim that nearly 30 percent of the world's gross domestic product currently crosses borders, thus global trade is becoming an integral and growing part of almost every business. Yet, exporters and importers continue to struggle to coordinate old-fashioned, international freight, financial, and regulatory processes, and although they might isolate production from inbound logistics to mitigate this conundrum, increasing market pressures continue to force better coordination. Help may come from adopting a new crop of Web-based applications aimed at improving and automating intricate multiparty coordination. As a result, businesses have created GTM to define the challenges and opportunities unique to the new, highly global business environment. There are some compelling trends that have made GTM (which has lately begun incorporating ITL) a topic of interest to avant-garde businesses, including the fact that global trade is substantial, and will only increase with time.

Nonetheless, while many may see the rationale for sourcing goods from far-flung locations with cheaper labor and costs, not many clearly realize the intricacies and costs associated with such trading activities—a cost which often may negate the initial benefits of cheaper, nominal prices of imported items. Although many enterprises have made progress in improving aspects of their financial supply chains by implementing ERP or financial applications such as accounts receivable (AR), general ledger (GL), and accounts payable (AP), global trade requires a number of additional, crucial functions that are frequently absent from domestic trade, including functions like letter of credit (LC) management, global trade financing, country and party risk assessment, and transaction reconciliation (settlement), to name a few. Proper management of these specialized functions require GTM-oriented financial management solutions that should give organizations greater visibility and control over their international business partners, receivables, payables, working capital needs, and overall financial position.

Order, Shipment, and Financial Settlement

To reach its aspirations of creating an end-to-end global trade management (GTM) solution, TradeBeam, a leading provider of global trade solutions, has designed several so-called "solution blueprints" for solving specific global trade issues. Solutions range from providing import shipment visibility and trade compliance to eliminating financial discrepancies while managing letters of credit (LC). TradeBeam's Solution Blueprints begin with the key pain points of global trade and identify tools and strategies available to corporations seeking the advantages of optimized GTM. They include a non-prescriptive set of GTM applications that, individually, may add significant value to a user corporation while solving specific export management problems. The idea is to align strategies with finance and logistics organizations and to establish a beachhead with a relatively quick proof of concept that starts automating a defined set of processes and provides payback in several months. Given that the GTM market is still relatively new, TradeBeam has done an impressive job establishing itself as a pioneer.

Part Four of the TradeBeam Keeps on Rounding Out Its GTM Set series.

To broaden its offering, TradeBeam has embarked on a series of careful acquisitions. Its acquisition of SupplySolution has helped TradeBeam produce its collaborative inventory management (CIM) solution blueprint, which shares and communicate parts levels, shipment data, and forecast to anticipate and manage shortages and schedule changes through event driven alerts. In doing so, the solution solves business problems like poor inventory visibility through the networked supply chain, excessive buffer inventories, and costly impact of shortages and schedule changes. TradeBeam also has other acquisitions bundled with its in-house, organic development.. Export management, import management, trade finance, legalization, global trade content, insurance and claims management, letter of credit, and supply chain electronic management are other solution blueprints that TradeBeam has developed or is in the process of releasing. TradeBeam's Letter of Credit Solution Blueprint and SCEM Solution Blueprint are two that are particularly noteworthy because both their core functionality came from acquisitions and lead to significant advances in the field of global trade settlement solutions

TradeBeam Letter of Credit Solution Blueprint

TradeBeam aimed to reduce discrepancies and improve efficiencies in the financial supply chain through automated document preparation and collections, managed LC creation, and issuance expiry and draws. Thus it acquired LC Express in 2003, IFR, and eTime Capital in 2002, which has allowed TradeBeam to develop its impressive LC methodology. The transactions were stock and cash deals, where TradeBeam acquired the companies out of bankruptcy. eTime Capital had spent over $45 million (USD) developing solutions for its customers to helped them optimize their cash flow cycle by applying a groundbreaking technology and a differentiated capability linking financial settlement to the global trade logistics business processes through reconciliation, exception management and real-time reporting. These capabilities have meanwhile provided an excellent complement to TradeBeam's global trade business process and document management solution. Automating the overall letters of credit (LC) process to ensure accuracy and reduce the discrepancy rate is not simply a matter of automating LC issuance. The process if far more complicated because automation is a necessary precursor to integrating the entire supply chain. LC are one of the most important payment and financing vehicles for international trade, because they offer security and risk mitigation. However, in exchange for this security, there are additional costs and challenges. For example, up to 70 percent of all LC documents submitted to the bank for payment are rejected upon first presentation because the documentation has been issued incorrectly. This leads to payment delays, additional fees, and in some cases, non-payment of the drawing. Other LC-related challenges are complicated and lengthy application process, delays in conducting the transaction due to the long issuance process, the strict and often complex documentary requirements, associated secondary and penalty fees, and the high susceptibility to errors because multiple parties must produce documentation.

The result was TradeBeam's Letter of Credit Solution Blueprint, which manages existing LC use and relationships for over one hundred and fifty corporate clients. It synchronizes payment terms and critical supporting documents to enable both electronic LC creation and bank presentation. Part of the secret to TradeBeam's success lies in its document management and reconciliation capability that generates documents based on the LC terms, making use of business partner profiles, electronic data transmission, and templates to minimize data entry. Paper and electronic distribution of LC documentation can be made to banks, trading partners, or any service provider. All documents created and managed by TradeBeam are compliant with Uniform Customs and Practice for Documentary Credits (UCP500) and Electronic Uniform Customs and Practice (eUCP).

Getting Strategic Planning and Financial Planning in the Same Bailiwick

Getting Strategic Planning and Financial Planning in the Same Bailiwick
Richard Lynch, John Diezemann and James F. Dowling

By partnering with operations on balanced scorecard initiatives, financial managers are helping their companies focus on critical business processes and gain consensus on the critical set of measures to help drive desired business results. In addition, with the explosion of Enterprise Resource Planning (ERP) and e-Commerce systems, financial executives are leading the charge in going from theory to practice by developing a cascading measurement architecture and providing the key linkages to other relevant information (e.g., products, projects, performance plans, and organizational data).

Certainly, the financial community has responded to the 'relevance' challenge that was laid down over a decade ago1. In fact, relevance has been contagious. Already companies are tying balanced scorecard initiatives to leadership and strategy; making sure operating managers are focusing on the right issues and priorities, and coordinating the actions of the company as a whole in implementing those strategies2.

While the role for today's financial managers is quickly moving upstream in the strategic planning domain, the challenge becomes even greater in light of the accelerating pace of change. This reality is quickly rendering obsolete the traditional approaches to corporate governance, such as 3-5 year strategic plans, annual planning and static budgets. In this new environment, financial managers can play a key role in driving the corporate agenda through their sponsorship and support of projects and investments that deliver critical business capabilities. To provide useful financial insight, sooner rather than later, financial managers need to think about business strategy as a process of continuous course corrections, evaluated more like a series of 'real options' than a single projected cash flow3. While the concepts behind real options are certainly familiar to most executives, the trick to identifying, valuing and making strategic choices lies in the complex and often overwhelming task of understanding the linkage between initiatives and changing corporate goals and managing the interaction among projects.

This article provides a breakthrough planning approach for rapidly realizing the business capabilities dictated by strategy and then through the financial lens of 'real options' shows how to time strategic choices4.

Identifying the vision is only half the job

At its core, strategic planning is a process that documents a set of choices made by management of a business describing 'the vision', objectives, goals, and supporting action plans along with the rationale and implications associated with these choices. However, as senior executives seek to realize the new vision, the momentum for change often stalls. As energized and well intentioned as the management teams and project teams may be, they often lack a disciplined approach to orchestrate change within their organizations. To realize the vision, management must be concerned with three key priorities:

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Developing a set of Business Capabilities to capitalize on the vision

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Translating Business Capability Requirements into necessary business processes, information technologies, and organizational systems

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Deploying a process for the rapid, ongoing realignment of key process, technology and organizational elements.

As straightforward as this sounds, most company projects aimed at the vision are often off the mark.

Interviews with over 100 executives in Information Technology (IT) and Operations areas reveal several common root causes leading to strategy execution failure:

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Rapid changes in technology and business process require a consistent disciplined approach, yet most companies don't have any enterprise-wide strategy

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Incorrect decisions are made because current reality failed to take into account predictable future events

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Companies are constrained in the execution of their business plan by past business application choices

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Key initiatives are often launched from functional silos, lacking alignment and fit with the greater organization with respect to process, technology and/or organization.

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Financial planning and budgeting fail to take into account the timing and interaction between projects.