May 16, 2012

ERP Integration in a Changing Environment

Industry Leading Practices

2

Introducing the Speakers

Bobby Carney

Bobby is the Global Product Head for Connectivity and Software-as-a-Service

at Citi. Mr. Carney has global product management responsibility for

Connectivity products, including CitiConnect and Citi STR, and Software-as-a-

Service offerings such as CitiDirect White-Label. Previously within Citi

Transaction Services, Bobby held EMEA regional product management

responsibility for Channel Services. Prior to joining Citi, Bobby was a

management and technology consultant with Accenture, focusing on design

and delivery of transformational change programs with Banking and

Insurance clients, and has further extensive experience in the international

telecomms industry.

René Schuurman

Rene is the Global Product Manager of Connectivity Services at Citi. Mr.

Schuurman has global product responsibility for all file and message based

connectivity solutions for Citi Transaction Services within Citi. These include

the use of EDI and messaging standards, ERP and TWS integration and the

use of SWIFT product and services. In this capacity Mr. Schuurman is also a

representative for Citi in EDI standard governing bodies such as the PAY

SEG and the Common Global Implementation workgroup. He is also an active

participant in the ISO20022 CGI Mapping Group.

3

Agenda

ERP Integration – Trends & Developments

Bank Integration – Exploring Citi Solutions

Summary

Questions

ERP Integration – Trends & Developments

5

Treasury Trends – Execution Imperatives for 2012+

Continued volatile market conditions and evolving

regulations require improved information and rapid

execution capabilities

Maintain financial flexibility with funding strategies

across multiple options

Leverage emerging technology/process standards to

increase flexibility and choice

Focus strategically and globally for

treasury transformation opportunities

Implement robust control processes to

monitor operational & financial risks

that may come with growth

Reassess banking relationships with a

view towards future growth strategies

and plans

Treasury challenged to do „more with less‟

Company-wide liquidity and risk management

programs are a key characteristic of industry

leading efficiency and effectiveness

“Piggyback” treasury objectives on organization-

wide technology/process initiatives to help drive

the business case

Close coordination with businesses, regions to

identify issues and mitigants

Implement policies, controls and ensure ability to

monitor

Long-term view of requirements across a broader

network

Rationalize providers to improve operating and cost

efficiency

Flexibility to respond to volatile market

conditions

6

Evolution of the Working Capital Model

Global Treasury Integration

Global IHB

Global Treasury Centre with

Regional RTC

Global Risk Management

Global Liquidity Structure

Traditional (Local)

Business Model

Regional Treasury Integration

Regional Treasury Centre

Regional IHB

Regional Liquidity StructureGlobal Working Capital

Management

Global SSC

Global Vendor and Customer

Relationship Management

Global POBO Structures

Global Netting Centre

Global Payments Factory

Global Principal Trading

Company

Regional Working Capital

Integration

Regional SSC – process

centralization

Regional Vendor and

Customer Relationship

Management

POBO

Netting Centre

Payments Factory

De-C

entr

aliz

ed

Centr

aliz

ed

Local Management of

Treasury and Working Capital

Local cash management

Local Payables and

Receivables

Multiple Bank relationships

No centralization

No arbitrage of tax, FX, bid /

offer spread

Regional

Entrepreneur

ERP

7

ERP – a timeline

1960s – Enterprise Resource Planning is born from a joint effort between J.I. Case and

IBM as Material Requirements Planning

1972 – SAP founded

1977 – JD Edwards and Oracle founded

1978 – The Baan Corporation founded

1987 – PeopleSoft founded

2003 – Services Oriented Architecture and “Internet Enabled” become standard

2003-2005 – Industry consolidation occurs*:

SAP – 45%

Oracle – 20% (E-Business Suite, JD Edwards, PeopleSoft, and Seibel)

Microsoft – 10% (Navision, Axapta, Great Plains, and Solomon)

Infor – 10% (Baan, Mapics, and a slew of other products)

Sage – 10% (Best Software is acquired)

* Forrester research

Virtually all companies (>99.5%*) with revenue of more than $5 million

have an ERP

8

Survey Question 1

For what functions do you leverage your ERP system?

(Please choose one or if it‟s not listed choose “other” and fill in the blank)

a. Inventory management only

b. Payables

c. Receivables

d. Payables & Receivables

e. Payables & Receivables & Treasury

f. Other - NOTE: CAN DO MULTIPLE CHOICE ONLY. USERS CANNOT FILL IN THE BLANK.

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ERP Integration - Challenges

Challenges

Specialized Resources

– Build – ERP Integration a core

competency of your business

– Buy

– Partner

Cost

– On-going Maintenance fees

– Large up-front costs

– Unknown partner viability

Time Consuming

– Long implementation cycles

– Delayed realized ROI

Must interpret country specific rules, payment

types, specifications

Rewards

Automation

– Remove human intervention

– Increase process efficiency / STP rates

Accuracy

– Reduced errors by eliminating manual

processes

Reduced Risk

– Less “hands in the pot” and potential failure

touch points

Lower TCO

– Human factor costs

Scalable for future growth

10

State of Play

SAP Oracle Infor Microsoft

Standard format Idoc Prefer EDIFACT N/A N/A

Standard data

setN/A N/A N/A N/A

Integration

softwareNetWeaver Fusion N/A BizTalk

Standard

protocolN/A N/A N/A N/A

Standard

security solutionN/A N/A N/A N/A

Bank Integration – Exploring Citi Solutions

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How do I ensure my payments are

protected during delivery?Security

How should I deliver the payment? Connectivity

What language should my systems speak

with the bank‟s systems?Format

What payment types do I need to make?

What specific information is needed for STP?

Validated Data

Bank Integration

Connecting to your bank can be a challenge. Even more so if you want an integrated / fully

automated solution.

Business Considerations Integration Challenges

While the banking community – including SWIFT – has delivered tools to simplify connectivity and security

Corporates want their banks to walk more than the last mile …

Validated Data

Format

13

An example: Citi‟s solution for SAP

Designed to walk more than the last mile by addressing Data and Format challenges for ERP Users.

The CitiConnect ERP Integrator

Validated Data

Format

Provides a cost-effective and non-intrusive

solution for SAP

Leverages existing ERP / SAP capabilities to

extract comprehensively populated payment

files at no extra cost

Delivers payments (and direct debits)

formatted in ISO 20022 XML with all required

payment details, including local clearing rules,

for straight through processing by Citi

14

The CitiConnect ERP Integrator

Allows Corporates to generate files in ISO XML format with validated data in 3 steps:

1. Load the Citi ISO XML Template into the SAP Payment Medium Workbench and optionally customize

2. Assign the template as a payment method

3. Associate payment types to vendor Then it‟s business as usual

About SAP Payment Medium Workbench

An integrated and strategic component of each SAP ERP (version 4.7 onwards) at no additional license cost

Payment File

SAP ERP

SAP Payment

Medium

WorkbenchCiti ISO XML

Template

15

Survey Question 2

Are you using a service bureau for your payment transaction processing?

a. No

b. We are considering/evaluating

c. Only for Treasury payments

d. For both Treasury payments and Payables/Receivables

16

Co-Innovation

Citi and other banks have agreed to co-innovate in SAP Financial Services Network

The objective is to create a modular and expandable ecosystem connecting corporate users and their banks

Corporate users and banks encouraged to join the Customer Engagement Initiative to review, collaborate and contribute to the SAP Financial Services Network

17

Introducing SAP Financial Services Network

Banks Corporates

SAP Cloud

Secured Connectivity

Financial Services Network

Pa

ym

en

ts

Rem

ittan

ce

da

ta

Tra

de

fina

nc

ing

An

aly

tics

Value-added Services

18

Next Generation Corporate Connectivity

Banks Corporates

Comprehensive Solution:

Single connection, multi-service network – payments, trade financing, liquidity management, etc.

Platform for value-added applications, e.g. intelligent decision making, automation, etc.

Cloud-based for low TCO, rapid on-boarding

Value ServicesBusiness Network Directory

Integration as a

Service

Platform as a Service

Data store

SAP Cloud

SAP Financial Services Network

Summary

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Value Proposition

Cost Effective

Leverages existing ERP/SAP capabilities to extract payment files at no extra license cost

Flexible

All ISO 20022 XML payment types in Citi‟s global footprint supported though STP

Phased roll-outs supported

All CitiConnect protocols supported

All CitiConnect data security solutions supported

Fast and Simple

Significantly shortens implementation process: days instead of months

User configured, not programmed

Adaptable

Easily adaptable to existing ERP customizations

Co-exists with other bank interface solutions

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Survey Question 3

How confident are you in your IT/IS/Technology department in developing an integration solution to your

bank under the following conditions:

• Low cost project under $75,000

• Scalable enough to fit your entire foot print

• Fast implementation time <60 days

• Accurate interpretation of banking rules by country and payment type (possibly 100‟s of

combinations)

a. 100%

b. 75%

c. 50%

d. 25%, or less

e. Unknown

22

Conclusion

ERP systems continue to enhance and develop their capabilities, including new developments on bank

integration

Integration with banks continues to be an area of complexity and focus

Citi continues to develop solutions to address this functional gap, with an emphasis on collaboration with

ERP vendors, to deliver against the client imperatives of:

Efficiency and effectiveness, doing „more with less‟

Flexibility

Control

23

Questions

Thank you for your time today

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Bobby Carney

Citibank – CTS

Global Head of Connectivity and Integration

+353 (1) 622-6019

bobby.carney@citi.com

René Schuurman

Citibank - CTS

Global Product Manager, Connectivity Services

+1 312 876 3383

rene.schuurman@citi.com

Thank you

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