Global Payment Systems Webinar

Maximize Your Channel Success with Effective Global Payment
Systems

November 12, 2009
Vaughn Aust
VP, Product Management

www.hawkeyechannel.com

Agenda

AGENDA
Why cash payments?
 Partner perspective
 Vendor perspective

Challenges of global payment systems
 Process Inconsistency
 VAT/GST liability
 Security
 Bank account validation

One client’s success story

Making global payments work for your company

www.hawkeyechannel.com © 2009 hawkeye, all rights reserved. 2

WHY CASH PAYMENTS?
“...Cash flow issues in the channel are coming up
as a growing problem...

...for solution providers the trick to remaining
solvent during the six to 12 more months it is
going to take to see real improvement in the
market is going to revolve around cash flow and
managing costs.”
Robert Faletra, ChannelWeb, July 2009


Hawkeye Channel Practice

ABOUT HAWKEYE
Channel Programs
Enablement
new!
Performance Channel
Channel Strategy
Measurement Collaboration
Insight Growth
Assessment Reach
Best Practices Profitability

Improving www.partnerconduit.com
the Value of
Channel
Relationships


Over a decade of success in the Channel

ABOUT HAWKEYE
2007 Hawkeye
2003 expands into Asia
Hawkeye Pacific
2000 expands into
Hawkeye Europe
acquires
1998 Cohesion
Hawkeye
Group hawkeye’s mission
founded
1996
Cohesion, To develop and execute innovative, technology-enhanced
Inc. channel marketing strategies and programs that allow our
clients to deliver incremental channel growth in terms of
founded
mindshare, channel solutions, and indirect sales.

www.hawkeyechannel.com 5

Disbursement History

ABOUT HAWKEYE
NA payment disbursement since 1996
Global payment disbursement since 2005
…within North America:
$509MM
…within EMEA:
…to EMEA: $76.5MM
$25.8MM …to Asia Pacific:
$1.5MM

…to Latin America:
$1.3MM

2009 = $775MM est.
2008 = $614MM
2007 = $450MM


WHY CASH PAYMENTS?


Partner Perspective

WHY CASH PAYMENTS?
Solution providers are focused on business critical processes in these
challenging economic times and cash flow and on time payments are
more important than ever before.

Partners want:
 On time payments
 Payments in their preferred currency
 Consolidated payments for multiple programs
 Clear visibility into benefits
 Clear, consistent and understood process


Vendor Perspective

WHY CASH PAYMENTS?
Vendors are focused on reducing costs and increasing partner satisfaction.

Program Managers & Operations Managers
want:
 Reduce/eliminate partner complaints
 Focus on program success
Finance Directors want:
 Focus on other finance functions
 Global tax liability painlessly addressed
 Cost efficient payment process


CHALLENGES OF GLOBAL PAYMENT SYSTEMS


Why are global payments so difficult?

Many challenges with global payment systems can be traced to several
factors:
1. Process inconsistency
2. VAT/GST tax liability
3. Security
4. Bank account validation


Process Inconsistency

Process Pain Points
 Multiple programs, duplicated effort
 Different sources of payment information
 Different VAT/GST tax advice and resulting
processes
 Different methods of collecting bank
account information
 Front line support knowledge


VAT/GST Tax Liability

Hawkeye Disclaimer
 We are not tax experts, but are simply
pointing out best practices that we have
implemented for global, fortune 100
technology clients

Global VAT/GST Tax liability
 More than 130 countries have these taxes
 Vary between 5% and 25%
 Partners are required to invoice the
Vendor for the value of the award


Security

List of security considerations that Vendors should consider (whether a third
party vendor or “do it yourself”)
 How is Partner personal information stored?
• Encryption, storage and retention policies, access
 Partner account entry – beneficiary name
 If third party,
• Are they SAS 70 certified?
• Are they GAAP compliant?
 Vendor Bank Account
• Access – signature and authorization policy
• Batch control and auditing


Bank Account Validation

Bank Account Validation
 Routing Methods are
different
• SWIFT
• IBAN
• ABA
 Upfront/Online versus
Backend


SUCCESS STORY


The Situation

SUCCESS STORY
The company had programs in over 100 countries and had been using regionalized
vendors and internal, regionalized Accounting centers to process ~$1 billion in
payments annually to over 8,000 partners.

The challenges for this company:
 VAT/GST taxes
 Inconsistent Process
• Across regions
• Across programs (both different and same regions)
• Same partner receiving different payments
 High internal costs
 Long payment lag times

Let’s look at how the company addressed each of these concerns.


Global Payment Processing Needs

SUCCESS STORY
The company was hoping that a single, global payment platform and process
would help them with the following:

 Reduce processing time
 Reduce transaction costs
 Ability to consolidate multiple
payments
 Robust administrative metrics
 Reduce payment exceptions
 Standardize payment
communication to partners
 Decrease Help Center volume


VAT/GST Taxes

SUCCESS STORY
Accounting firms process
 Always pay VAT/GST to local governments and reclaim at the end of the year
 Physical VAT/GST invoices

Why?
 “Market Penetration Services” are a
cross-border, non-taxable item in
the supply chain
 Electronic invoices are legally
acceptable in many countries


Process Consistency

SUCCESS STORY
Bank Acct Info
Payment Pending Collection & Real- Payment
Notification Email time Validation Confirmation
Dynamic Online
Invoice or Invoice
instructions


New Process Dynamic Options

SUCCESS STORY
After submitting or confirming
bank details, dynamically display
mailing instructions for a partner
invoice or ask the partner to enter
their invoice online, based on
program and country. VAT was
inclusive or exclusive, based on
program and country.


Process Transparency - Partner Global Benefit Statement

SUCCESS STORY
At-a-glance summary of
all Pending and Paid
benefits

Drill down for detailed
transactions

Multiple currency and
Multiple language
enabled


Where the Company/Vendor Cut Costs

SUCCESS STORY
COST
SAVINGS

Reduced Invoice Audit

Global Payment Global Benefit Document
Help Desk
System Statement Management


Vendor Cost Savings

SUCCESS STORY
Customer Service Savings 38%
Delivery & Audit Savings 67%
Management Savings 20%

Savings/Payment $26.13

30-Day Payment Delivery SLA ~40%  95%+


Benefits of the New Payment System for Vendor

SUCCESS STORY
 Standardized, single global payment
platform
 Reduced payment cycle time
 Predictable delivery of payments
 Improved partner satisfaction
 Consolidation of multiple payments
 Reduced transaction costs
 Centralized reporting and tracking
 Consistent banking data collection
 Intermediary banks enabled in
payment process
 Standardized payment
communications
 Online, consolidated reporting
 Decreased Help Center volume


Benefits of the New Payment System for Partners

SUCCESS STORY
 Consolidation of payments  Managing fewer payments
 Improved cash flow with faster  Standardized, predictable cycle
payment
 Online tracking of payment process
 Provide bank details once
 Payments in local currency
 Strong communication

Greatly improved
partner
satisfaction!


KEY POINTS/DISCUSSION


Evangelizing and Building a Global Payment System

KEY POINTS/DISCUSSION
Planning and implementing a global payment system can be a real challenge.
These important points will get you started:
1. Obtain key stakeholder buy-in and sponsorship
2. Define and prioritize Global Payments as a project
• Centralize operations budget
3. Audit and question current tax-related processes
4. “Operationalize”
5. Start with pilot
6. Survey, measure and improve
7. Roll-out programs in batches
8. Reduce cost and increase partner sat


Key Points

KEY POINTS/SUMMARY
These are key best practices for an effective global payment system:

1. Centralize
2. Standardize
3. Validate banking information
upfront
4. Utilize electronic invoicing
5. Require partners to invoice for
Market penetration services


Questions, Discussion

KEY POINTS, DISCUSSION

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