Automating Accounts Payable

1. Automating Accounts Payable March 15, 2001

2. Automating Accounts Payable objectives << >> Meeting Objectives > Provide Thorough Understanding Of: • - Direct Commerce • - Solution • - Architecture > Demonstrate Direct Commerce Application In The Form Of Prototype > CISCO Participation In Direct Commerce Pilot Program

3. Automating Accounts Payable company & team << >> Company & Team Mission > • To provide a web-based service that automates the delivery, management, approval, and workflow routing of A/P transactions. Executive Team > • Bruce Hanavan, CEO • Billy Williams, CTO • Jim Uffelman, VP of Sales and Marketing • David Bernard, VP of Engineering > > > Executive Team > • Chris Beckstead, EVP Visa • Gregg Seo, Director Inuit • Paul Dumas, Director Remedy • Colleen Brandon, COO & CFO Access Communications • Daniel Dean, VP & CTO Medical Logic > > > > ‘ ‘ web-based transaction and workflow applications ,,

4. Automating Accounts Payable achievements << >> Goals & Achievements (1/1/01) 0 mo. (6/1/01) (12/1/01) 6 mo. 12 mo. 18 mo. > Beta Testing & Initial Rollout Nationwide Growth Product Design & Development $10M “B” Round $1M Seed Round $2M - $5M “A” round Business Expansion Business Milestones Business Milestones Product Development On-going Core Development Architectural Platform  UI Integration with Backend Technical Prototype   Product Specifications/UI Design Application Testing Customer Focus Groups Beta Implementations  Standards Participation  2nd Generation Products Corporate Organization Core Management Team (3/26) Software Dev. Team  Complete: Management Team Technical Support Org. Professional Services Org. Operations Team Sales & Marketing Team Customer Support Group Finance/Acct. Group  Advisory Board Seed Round Funding  Corporate Infrastructure  Sales & Marketing  Pilot Customers (Sun Micro, VW&R) Affiliate Customers Strategic Alliances Beta Contracts Signed Web Site & Collaterals 3rd Party Licensing  National Marketing Rollout Trade Show Participation 

5. ‘ ‘ Automating Accounts Payable a/p problems << >> “Pains” in Accounts Payable Large buying organizations > • Manual process > • High volume of paper-based transactions > • Excessive vendor phone calls > • Workflow inefficiencies • routing • approvals • document > • Increased department demands/ flat headcount > • Too much time spent on low value tasks • mail handling • invoice entry • filing too much time spent on low value tasks ,,

6. ‘ ‘ Automating Accounts Payable solution << >> Solution The Direct Commerce solution > • Provide one URL to solve multiple exchanges through: • electronic invoice delivery • configurable workflow routing • document matching • infohub – self service vendor status with dialog functionality • A/P manager console – summary tool • reporting automation and maintenance of paper-based transactions ,,

7. Automating Accounts Payable a/p automation << >> Accounts Payable Automation • PURCHASE ORDERS • INVOICES • Vendors • DCI Customer • SAP • Great Plains • QuickBooks • Oracle • Financials • WEB XML FILE • CUSTOM • AUTOMATION • Electronic delivery • Document matching • Workflow routing • AP mgmt “console” • Reporting • Direct • Commerce

8. Automating Accounts Payable a/p automation << >> Accounts Payable Automation • PURCHASE ORDERS • INVOICES • Vendors • DCI Customer • SAP • Great Plains • QuickBooks • Oracle • Financials • WEB XML FILE • CUSTOM • AUTOMATION • Electronic delivery • Document matching • Workflow routing • AP mgmt “console” • Reporting • Direct • Commerce • Vendors • Vertical • Market • Exchange • XML • Oracle • Sage • Generic • Financials

9. Automating Accounts Payable a/p automation << >> Accounts Payable Automation • PURCHASE ORDERS • INVOICES • Vendors • DCI Customer • SAP • Great Plains • QuickBooks • Oracle • Financials • WEB XML FILE • CUSTOM • AUTOMATION • Electronic delivery • Document matching • Workflow routing • AP mgmt “console” • Reporting • Direct • Commerce • Vendors • Vertical • Market • Exchange • XML • Oracle • Sage • Generic • Financials • EDI • VAN • EDI • Vendor • AUTOMATION • Customer interface • Status information • Fee based services

10. Automating Accounts Payable a/p automation << >> Accounts Payable Automation • PURCHASE ORDERS • INVOICES • Vendors • DCI Customer • SAP • Great Plains • QuickBooks • Oracle • Financials • WEB XML FILE • CUSTOM • AUTOMATION • Electronic delivery • Document matching • Workflow routing • AP mgmt “console” • Reporting • Direct • Commerce • Vendors • Vertical • Market • Exchange • XML • Oracle • Sage • Generic • Financials • XML • EDI • VAN • Non-DCI Customer • Automated A/P • EDI • Vendor • Oracle • SAP • JD Edwards • AUTOMATION • Customer interface • Status information • Fee based services

11. PURCHASE ORDERS • INVOICES • PAYMENT • Vendors • DCI Customer • SAP • Great Plains • QuickBooks • Oracle • Financials • WEB XML FILE • CUSTOM • AUTOMATION • Electronic delivery • Workflow routing • Document matching • Infohub • AP mgmt “console” • Reporting • Direct • Commerce • Vendors • Vertical • Market • Exchange • XML • Oracle • Sage • Generic • Financials • XML • EDI • VAN • Non-DCI Customer • Automated A/P • EDI • Vendor • Oracle • SAP • JD Edwards • AUTOMATION • Customer interface • Status information • Fee based services Automating Accounts Payable a/p automation << >> Accounts Payable Automation

12. Automating Accounts Payable proposition << >> Value Proposition > Cost Savings - increase productivity while maintaining headcount - exercise vendor discounts > IT Impact - accessible from any browser - quick and low cost implementation - minimal IT support > Scalable solution supporting company growth > Elimination of low value tasks > Improved workflow options > Availability of information

13. Un-automated Invoices • 60,000 x $15 • ( $900,000 ) • Automated Invoice costs • 60,000 x $ 3 (DCI) • 60,000 x $ 5 (Internal) • $180,000 • $300,000 • Other savings • 1% to 3% additional timing discounts on $400M • Productivity increases in payment, outbound, receiving … • Work process improvements • With low impact implementation • Intangible • Benefit to customer • > $420,000 Automating Accounts Payable proposition << >> Value Proposition

14. DCI REVENUE • CUSTOMERS • Buying organization • Revenues X 1 • $300,000/yr. • Vendor Subscription fees • 10,000 per Buyer, 5% penetration = 1,000 @ $50 • $300,000/yr. • Installation fees • Not included • $600,000/yr. • X • Additional Products:Payment, outbound, receiving, timely payments, vendor relationships • 200 Buyers • $120M/Year Automating Accounts Payable company building << >> How to Build a Billion Dollar Company

15. E-Procurement • Ariba, Comm1, Claris, • Rightworks, etc. • Travel & Expense • Oracle, Extensity, • Concur • Corporate • Financial • System • EAI Vendors • Active, Vitria, • Tibco, Weblogic • Workforce • Automation • Reporting Tools • Brio • CRM Vendors • Oracle, Siebel, • Vantive, Clarify Automating Accounts Payable marketplace << >> The Competitive Marketplace

16. Automating Accounts Payable competition << >> Competitive Landscape Weaknesses Strengths Company Comments iPayables Optika SPS Commerce Ariba • Accepts invoice via any technology • Focuses on backend of the process • Does not publish out PO’s • Solution focuses on invoice processing • Heavy customization and consulting work • Imaging is part of their solution • EDI based • Does not support non-PO invoices • Strong Retail presence • E-Procurement • Established market presence • No focus on the settlement side

17. Automating Accounts Payable strategies << >> Strategies The Direct Commerce business strategies Sales > Direct sales force – 9 regional sites > Indirect sales through: - strategic alliances - co-branding > Pilot and affiliate partner referrals Marketing > Targeted marketing approach - industry tradeshow presentations (IOMA,IAPP<BAAPMA) - standard boards participation (Sandia Labs) - trade journal advertising

18. Automating Accounts Payable strategies << >> Strategies The Direct Commerce business strategies Pricing Model > • Fee based implementation ($50,000) > Two options: - (A) - $3 per invoice/month (includes all modules) - (B) – monthly subscription per module ($3,000 minimum) - tiered based on invoice volume Implementation > • Demo to close of sale 2– 3 weeks > • Close to purchase order 2-4 weeks > • Implementation 3 weeks - outsourced vs. professional services - 24 x 7 tech support included

19. Automating Accounts Payable profitability << >> Path to Profitability • Q1-01Q2-01Q3-01Q4-01Yr.-02Yr.-03 • Sales (000) 114 8,297 29,376 • Expenses (000)305 853 699 1,139 5,900 19,096 • Net Profit (000) -305 -835 -699 -1,025 2,397 10,280 • Assumptions: • # of customers • Price/invoice • Avg. volume/customer

20. Automating Accounts Payable application << >> Accessible from any Browser Direct ERP Interconnection for data Import & Export Applications Accessible for Programmatic Access We maintain formats, protocols, and registrations Application The Direct Commerce application > > > >

21. Automating Accounts Payable architecture << >> Architecture The Direct Commerce architecture > Building a secure, scalable, reliable, highly functional application - use of leading technologies - Java, XML/XSL, EJB, Message Queuing, RDBMS • best of breed components deliver affordability to a • wide range of companies > Industry Standards & Certifications Compliance - suntone - security reviews • standards setting bodies