About HighRadius • Software company headquartered in Houston, Texas , U.S.A • Specialize in Financial Supply Chain Management (FSCM) • Provide Accelerators to SAP FSCM modules
• Provide Hosted Software-as-a-Service (SaaS) Solutions • Currently No.1 in SAP market & No.2 in overall market • Ranked among fastest growing technology companies in Houston in 2008, 2009 & 2010
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Partial List of Customers
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HighRadius Product Lines SAP FSCM Accelerators
ReceivablesRadius SaaS Products
Dispute Resolution Accelerator
POD & Claims Automation
Credit Memo Approval
Deductions Management
Credit Debit Matching Engine
Trade Promotions Management
FSCM Correspondence Automation
Cash Application Automation
Cash Collections Forecasting
Document Management
Credit Decision Accelerator
Credit Data Aggregation
These products are developed in SAP ABAP and are imported and installed within the SAP landscape 5
These products are hosted Software-as-a-Service (SaaS) multi-tenant applications deployed on the cloud and accessed via the internet
FSCM Space & Opportunity
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FSCM
• FSCM stands for Financial Supply Chain Management • Optimizing movement of ‘money’ between and across companies similar to Supply Chain Management which is movement of ‘goods’ • Fits within a logical process of a company called Order-to-Cash (OTC)
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What is Order-to-Cash (OTC)?
Vendor Order
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Delivery
Customer Invoice
Payment
Transaction Processing Times in the Order-to-Cash Cycle
1960s
2010
Order
4-7 Days
Today
Delivery
14-21 Days
Next Day
Invoice
4-7 Days
Same Day
Payment
45-60 Days
45-60+ Days Source: Killen & Associates
In 50 Years Industry has not improved much w.r.t payments! 9
Working Capital Optimization (Big Picture) • $580 billion tied up in excess working capital (assuming companies below the top quartile could achieve the same efficiencies as those in their industry in the top quartile) • Additional $260 to $324 billion was available through the implementation of efficient supply chain management practices. • Another $200 billion could be recovered from accounts receivable through process improvements Source: Survey by REL Consultancy & CitiGroup
$1 trillion dollars in stagnant working capital! 11
Deductions Management Companies are losing about $70 Billion every year in Deductions Vendor
Order
Delivery
Customer Payment
Invoice Deduction
Deduction: Short payment of a vendor invoice taken by a customer for various compliance reasons How Big is the Problem?*
• Deductions represent about 4% of sales • 78% of deductions are Allowed (e.g. credited, written-off) • Average deduction resolution time is 105 days * Source: Survey conducted by Credit Research Foundation of 424 companies across 30 industries
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5% additional recovery on Deductions for CPG Industry could be $1 Billion to bottom-line!
Collections Management
• ‘Collect Cash’ on Open Receivables • Key Metric: Days Sales Outstanding (DSO) – Average number of days that a company takes to collect revenue after a sale has been made – Typical DSO is about 48 days
• What is the value creation of 1 Day reduction in DSO? – ABC Manufacturer: $10 Billion Sales Revenue – Cash borrowing cost: 4% Simple Interest Rate – Value Creation = $1.1 Million [ $10 Billion * 4% * (1/365) ]
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1 Day Reduction of DSO for a Fortune 1000 could be $1.1 Million to bottom-line!
