TradeServer MRD

Trade Server
Marketing Requirements Document

Version 2.4 Document Number: GCS-TSMRD-001 Issue 1, 9/21/2000 This document on GCS network This document on GCS Intranet
Product Marketing Product Management Global Commerce Systems, Inc. September, 2000 Document Owner: Charles Zedlewski
GCS Trade Server Marketing Requirements Document GCS-TSMRD-001
Issue 1, September 21, 2000
Revision History
Date
08/17/00
Revision
1.0
Description
Initial Creation of MRD Template MRD versions 1.0--?? Appendix A: Internationalization
Author
Mike McArdle, Krissy Koenig Charles Zedlewski Katja Flajszman
09/05/00
09/21/00 09/28/00
V2.3 V2.4
Formatting of MRD version 2.3 Added missing comments and text to the following sections: introduction, market window, market share, competitive landscape, product positioning.
Katja Flajszman Greg Davoll
Document Change Management and Distribution Procedure

Changes will be applied to this document according to the following procedure: 1. 2. 3. 4. 5. Direct all change requests to the document owner. Each change request will be considered. If accepted, the change will be incorporated into a new draft of this document. The new draft of this document will be circulated for review by appropriate staff. Approval of the new draft will be by concurrence of those individuals participating in the review. The Document Approval Sheet will be used to indicate concurrence Once concurrence is achieved, the draft becomes the new version of this document, replacing any existing and previous versions.
New versions of this document are to be distributed to appropriate staff or made accessible on-line for reference. Notification of a new version will be communicated to appropriate individuals.
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Table of Contents
REVISION HISTORY.................................................................................................................. 1 REVISION HISTORY.................................................................................................................. 2 Document Change Management and Distribution Procedure............................................................... 2 TABLE OF CONTENTS ............................................................................................................. 3 INTRODUCTION ........................................................................................................................ 6 MARKETING STRATEGY.......................................................................................................... 7 Market Description ................................................................................................................................ 7 Market Segments .................................................................................................................................... 8 Description of Customer or Business Pain ........................................................................................... 10 There four opportunities / pressures in online financial trade cycle ...................................................... 10 New Fee-Based Financial Industry Space ........................................................................................ 10 Expanded Trade Cycle Payments .................................................................................................... 10 White Space Risk Mitigation........................................................................................................... 10 Configurable Financing................................................................................................................... 10 Target Market(s) .................................................................................................................................. 11 Market Opportunity and Market Size ................................................................................................. 11 Market Demographics .......................................................................................................................... 11 Traditional bank financial institutions: ................................................................................................ 11 U.S. Bank Financial Institutions.......................................................................................................... 12 Tier 2 13 Super Regional Ranked 11-25 Assets 100B to 46B ......................................................... 13 Tier 3 Regional 22 Ranked 25 to 47 Assets 20B to $45B ................................................................. 15 Super Community Ranked 51-75 Assets 18B to 10B ...................................................................... 16 Community 10Bto 7B Assets Ranked 76-100 ................................................................................ 17 Canadian Banks.................................................................................................................................. 17 Western European Banks .................................................................................................................... 17 Asia Pacific Banks.............................................................................................................................. 17 Market Window ................................................................................................................................... 18 Market Share........................................................................................................................................ 18 Barriers to Entry .................................................................................................................................. 18 Competition........................................................................................................................................ 18 Bank partnerships ............................................................................................................................... 18 Global discrepancies in market requirements....................................................................................... 18 Competitive Landscape ........................................................................................................................ 19 Industry Trends.................................................................................................................................... 19 Positioning ............................................................................................................................................ 20 Value Proposition ................................................................................................................................. 20 Key Differentiators/Themes ................................................................................................................. 22 Risks ..................................................................................................................................................... 22 PRODUCT DESCRIPTION........................................................................................................24 Product Rationale ................................................................................................................................. 25 Traditional procurement card processTradeServer payment process ............................................... 26 TradeServer payment process.............................................................................................................. 27 Payment network adoption plan .......................................................................................................... 27 Payment network adoption plan .......................................................................................................... 28 Functional Overview ............................................................................................................................ 29 Product Lifecycle .................................................................................................................................. 29 Proposed Release Plan ........................................................................................................................ 29 GE and TradeServer ........................................................................................................................... 30
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Release Cycle ..................................................................................................................................... 30 Migration Plans NA for 1st release.................................................................................................... 30 Backward Compatibility ..................................................................................................................... 30 End-of-Life Plan ................................................................................................................................. 31 Operating Environment....................................................................................................................... 31 Operating System ............................................................................................................................... 31 Databases ........................................................................................................................................... 31 Application Servers ............................................................................................................................ 31 Browsers ............................................................................................................................................ 31 Web Servers ....................................................................................................................................... 31 Legacy Applications ........................................................................................................................... 32 Standards............................................................................................................................................ 32 Applicable Standards ...................................................................................................................... 32 Adoption Steps ............................................................................................................................... 32 Product Feature Requirements ............................................................................................................ 32 CommerceServer ................................................................................................................................ 32 App Server - Essential .................................................................................................................... 32 Authentication Essential............................................................................................................... 33 Hierarchy - Essential....................................................................................................................... 33 Monitoring - Essential..................................................................................................................... 33 Reporting & Analysis ..................................................................................................................... 33 Security - Essential ......................................................................................................................... 33 Warehousing - Essential.................................................................................................................. 33 Workflow - Essential ...................................................................................................................... 33 CommerceConnect - Essential ............................................................................................................ 34 Business Functions ............................................................................................................................. 34 Cross Border Payments Low Priority............................................................................................ 34 Dispute Management Medium Priority ......................................................................................... 34 Fee Management High Priority..................................................................................................... 35 Integration to CommerceServer - Essential ...................................................................................... 35 Manual Input GUI Medium Priority ............................................................................................. 35 Federated TradeServer Medium Priority ....................................................................................... 36 Notification - Essential.................................................................................................................... 36 Payment rule High Priority........................................................................................................... 36 Payment Float Manager High Priority .......................................................................................... 37 Payment Reversa - Essential ........................................................................................................... 37 Payment Initiation - Essential .......................................................................................................... 38 Registration - Essential ................................................................................................................... 38 Reporting - Essential....................................................................................................................... 38 Internationalization Requirements ....................................................................................................... 38 Localization Requirements.................................................................................................................. 38 Services Components.......................................................................................................................... 38 Learning Services ........................................................................................................................... 39 Managed Services ........................................................................................................................... 39 Client Services................................................................................................................................ 40 MARKETING DELIVERABLES .................................................................................................41 Branding ............................................................................................................................................... 41 Product and Service Naming ............................................................................................................... 43 Product and Service logos/icons .......................................................................................................... 43 Trademarks ........................................................................................................................................ 43 Co-Branding Considerations (third party software).............................................................................. 43 Pricing .................................................................................................................................................. 43 List Pricing......................................................................................................................................... 43 First 6 months................................................................................................................................. 43 Following 6 months ........................................................................................................................ 44
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Following 6 months ........................................................................................................................ 44 Ongoing ......................................................................................................................................... 44 Discount Pricing ............................................................................................................................. 44 ASP Pricing (subscription) .............................................................................................................. 44 Promotional Pricing ........................................................................................................................ 44 Collateral............................................................................................................................................ 44 Brochure......................................................................................................................................... 44 White papers................................................................................................................................... 44 Beta Program...................................................................................................................................... 45 Beta Objectives............................................................................................................................... 45 Beta Candidates .............................................................................................................................. 45 Beta Site Qualification .................................................................................................................... 46 Beta Criteria ................................................................................................................................... 46 Product Launch .................................................................................................................................. 46 Event .............................................................................................................................................. 46 PR Brief ......................................................................................................................................... 46 Press Release .................................................................................................................................. 46 Analyst briefing .............................................................................................................................. 46 Press kit .......................................................................................................................................... 47 Web Site (internal & external)......................................................................................................... 47 Trade Shows....................................................................................................................................... 47 User Groups ....................................................................................................................................... 47 Training (internal) .............................................................................................................................. 47 Sales............................................................................................................................................... 47 Customer Support ........................................................................................................................... 47 BUSINESS CASE .....................................................................................................................48 Assumptions ......................................................................................................................................... 48 Dependencies ........................................................................................................................................ 48 Risks ..................................................................................................................................................... 48 Investments ........................................................................................................................................... 48 Sales Channels ...................................................................................................................................... 48 Revenue Projections Table (36 month) ................................................................................................ 48 FUTURE DIRECTIONS .............................................................................................................49 SOURCES ................................................................................................................................50 REVIEWERS.............................................................................................................................51 Mandatory Reviewers .......................................................................................................................... 51 Optional Reviewers .............................................................................................................................. 51 APPENDIX A: INTERNATIONALIZATION ................................................................................52 Globalization ........................................................................................................................................ 52 Internetional ....................................................................................................................................... 54 Dont they speak English? (Or: Why dont they eat cake?) .................................................................. 55 The big ones ................................................................................................................................... 55 French, German, and Japanese ........................................................................................................ 55 Functionality......................................................................................................................................... 56 Preparing code for translation ............................................................................................................. 57 Localization .......................................................................................................................................... 58 Cultural gotchas .............................................................................................................................. 58
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Introduction
The purpose of this Market Requirements Document is to introduce the market opportunity, risks and requirements for TradeServerTM, Global Commerce Systems first commercial software application initiative. The Marketing Requirements Document (MRD) is the first deliverable in the Product Development process. The MRD document and review process is owned by a Product Marketing Manager. All comments and feedback should be directed to the Document Owner. Per the defined process, the MRD will be reviewed a minimum of two times prior to being approved. Mandatory reviewers and approvers are listed at the end of this document. The MRD is designed to encapsulate the market requirements in order to ensure a market viable product. By design, the MRD will contain requirements that span multiple releases. The next document in the Product Development process, the Product Requirements Document (PRD), will contain the granular business requirements for a single release. The PRD is owned by Product Management. There are a number of auxiliary supporting documents that complement the MRD. These include: y TradeServer Overview Presentation y TradeServer Competitive Summaries y TradeServer Revenue Projections y McKinsey Report
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Marketing Strategy
Market Description
GCS market is the global business-to-business e-commerce market, in particular the post-procurement market or the transactions that happen after a purchaser presses the buy button. Generally, business-tobusiness e-commerce is rapidly growing and has received much attention recently, particularly eprocurement in which purchasers may buy directly from a supplier or through an online marketplace or exchange. Estimates from industry analysts regarding the markets explosive growth include: y y Global business-to-business e-commerce is projected to grow to $7.3 trillion by 2004, much of this conducted through online exchanges (source: Gartner Group). Bank of America Securities analyst Bob Austrian views estimates like Gartners as flawed because they focus only on the end product consumed and not on the entire chain of transactions that occur upstream from the final purchased good. Austrian estimates that $50 trillion in business-to-business transactions will occur in the U.S. alone. Upwards of $130 billion in new transaction and vendor fees will be generated by business-tobusiness commerce (source: Volpe, Brown, Whelan; Precursor Group).
Barriers to adoption of Internet commerce which may slow these growth estimates were identified in a survey of companies conducted by Giga Information Group and AD Little: y y y y y y y Lack of Security/Trust: 27% Privacy: 20% Availability of Content: 12% Lack of standards/infrastructure: 11% Social acceptance: 7% Dont understand potential: 6% Organizational barriers: 6%
The Giga/AD Little poll shows that the major barriers to business-to-business e-commerce adoption are the need to transact in a secure and trusted environment.
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Market Segments
The business-to-business trade cycle comprises many distinct phases (Figure 1), however, most of the focus in the marketplace has been on e-procurement and the ordering of goods and services.
Prime FI opportunities Financing and payments Information management
Approve vendors/ customers
Order Guarantee goods and payment services
Send invoice
Fulfillment
Manage Resolve A/R and disputes collections
Figure 1: Purchasing process
The e-procurement segment of the business-to-business market has begun to mature and has experienced a proliferation of buy-side, sell-side, e-market and catalog solutions provided by a variety of vendors. This growth in e-procurement will drive the next wave in business-to-business e-commercethe need for new payment, credit and risk management estimated to grow to upwards of $18 billion by 2003 (Figure 2).
18,010+
? 2,147 3,616
Integration service providers Customer experience monitors Credit services
CAGR = 148% 132
Legal Services
3,437
180 205
Trust and risk services 1,177

8,810
660
2000
2003
Figure 2: Estimated growth of payment, credit, and risk management
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The need for new payment, credit and risk management solutions is GCS market focus. Post-procurement solutions will fill the gaps in the trade cycle not currently addressed by e-procurement vendors and represent significant and sustainable market opportunities. Financial institutions, particularly money center banks and super regional banks are well positioned to provide solutions in this space. Moreover, the existing market for core payment, credit and risk management solutions is costly and in need of significant overhaul that GCS products can ultimately serve. This broadens the market substantially (Figure 3).
GCS Impact $ Billions
7 152
327
168
Transaction costs are only a tiny fraction of post trade costs incurred
A/R financing Underwriting Arranging Legal advisory Credit rating agencies
Post-trade processing Payment costs Buyer/seller invoice Bank fees processing ACH, check with cost Buyer/seller internal P-card payment processing Reconciliation/Disputes
Figure 3: US trade processing costs
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Description of Customer or Business Pain

Banks are facing major pressures in the on-line financial trade cycle. Many NewCo financial internet companies have mushroomed up to take advantage of on-line B2B opportunities, thus, stealing customers away from the Banks traditional financial products. Banks are reluctant to extend risk based financial products on-line due to a lack of identity or authentication of buyers and suppliers. Finally, major on-line exchanges are exclusively partnering with a small number of banks for financial services, thus prohibiting many banks from participating in on-line transactions.
There four opportunities / pressures in online financial trade cycle

New Fee-Based Financial Industry Space
Creating new space for expansion of financial services driven by the expansion of the new economy i.e. operating in white space financial service driven by the global acceptance of Certificate/PKI/Identrus authentication models owned by Banks. The announcement of the SWIFT-Identrus partnership has created a global standard for B2B transactions.
Expanded Trade Cycle Payments

Introducing corporate standard payments vehicles into the trade cycle, expanding trade Finance instruments to meet the expanding requirements of a quickly developing market in high value transactions,
White Space Risk Mitigation

Trust brokers i.e. Identrus Expanding risk based product to seamlessly facilitate trade. I.e. Credit, guarantees, insurance, escrow etc. Although as Forrester reports, 9 out of 10 companies they surveyed were satisfied with their risk management strategy. These firms rely on old economy contracts, and punishment of the withdrawal of business if firms fail to comply with agreed upon terms. This is most certain to change as marketplace procurement expands from this limited offers today.
Configurable Financing
Creating transaction based product to meet the long term customer demand for appropriate trade cycle finance and settlement i.e. Trade Finance, credit facilities. At a lower cost than existing payment models in use on the WWW i.e. p-card and in the physical world i.e. Letters of Credit. The standard of fees able to be charged by Fis will be in the .75% to 2% of transaction value range.
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Target Market(s)
The initial target market for the GCS product is bank and non-bank financial institutions (card issuers, large corporate treasury organizations and insurers) that will partner with GCS to deploy the GCS product to their commercial customers and to new customers they wish to acquire. Eventually, the market will be extended to reach the end customers, commercial buyers and suppliers, participating in B2B e-commerce. The revenue model and market entry strategies of these two customer bases are markedly different and will be described in this document.
Market Opportunity and Market Size

The trade support services market presents strong opportunities for GCS to produce new sustainable revenue, new scaleable solutions aligned with the companies long-term vision and to position GCS to succeed irrespective of how the nascent post-procurement space evolves. The market opportunity for the GCS product differs by customer group. Financial institutions represent the most immediate opportunity. y y y y There are over 3,000 traditional bank financial institutions globally that may wish to license the GCS product directly or indirectly. There are currently roughly 800 e-marketplaces and 100 large corporations that may wish to license the GCS product. There are an indeterminate number of non-bank financial institutions (e.g. card issuers) that may wish to license the GCS product Lastly, there are millions of businesses that may want to consume GCS product functionality as a service that GCS offers to them under GCSs own private label brand.
In the U.S. alone, trade processing costs are immense at $327 billion per year comprising $168 billion in A/R financing, $152 billion in post trade processing and $7 billion in payment costs (source: CAPS, Fed Reserve, KPMG, McKinsey).
Market Demographics
Traditional bank financial institutions:
Traditional bank financial institutions are chartered banks. They offer consumer and wholesale financial products to individuals and businesses. Recently, these banks have also begun to offer securities and insurance related products as well. Traditional bank financial institutions have a number of unique advantages in the financial services marketplace including long-standing customer relationships, regulatory protection, established brand and significant economies of scale. The most powerful regulatory protection is the banks control of settlement. Despite these advantages, bank financial institutions role in financial services has been eroding for the past 50 years. As financial products and services have become more sophisticated and deregulation has increased globally, traditional banks have seen their share of total global assets managed shrink from 80% to 40%. These assets have migrated to non-bank financial institutions
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(e.g. American Express, AIG) and large corporations that have increased their role in the financial component of their supply chain (e.g. GE Capital, GMAC). While traditional banks compete with one another, their most fierce competition has come from outside of their own market space. Traditional bank FIs are best segmented by geography and size. Geographically, financial institutions segment into U.S., Canadian, Asia Pacific and Western European. For the time being, Central and Eastern European markets are not viable market demographics, based on size, budget and regulatory environment.
U.S. Bank Financial Institutions

Within the U.S., traditional bank FIs can be divided into several size (based on assets under management, AUM) categories. Large money center banks (e.g. Citibank, Chase) are relatively few, but each manage a minimum of $150BB in AUM. These money center banks originate a greater percentage of commercial transactions than their actual size may indicate thanks to correspondent banking relationships. There are roughly 10 money center banks in the U.S. Money center banks have commercial product lines that span every possible financial service and system. Their total IT budgets are roughly 10% of revenues and a large percentage of those budgets are devoted to e-commerce initiatives. Money center banks represent excellent partners for GCS. Their brands and established position in the financial services marketplace can drive enormous transaction volume through TradeServer. Partnerships with these banks can accelerate endcustomer adoption of TradeServer and accelerate transaction-related fees that GCS can share in.
Citigroup Inc., New York Bank of America Corp., Charlotte, 2 N.C. 3 Chase Manhattan Corp., New York 4 Bank One Corp., Chicago 5 J.P. Morgan & Co., New York 6 First Union Corp., Charlotte, N.C. 7 Wells Fargo & Co., San Francisco FleetBoston Financial Corp., 10 Boston
Assets $792BB 679BB 396BB 272BB 265BB 257BB 234BB 185BB
IT Budget @0.50% $ 3.96BB $ $ $ $ $ $ $ 3.39BB 1.98BB 1.36BB 1.32BB 1.28BB 1.17BB 928MM
IT Budget @1.00% $ 7.92BB $ $ $ $ $ $ 6.79BB 3.96BB 2.72BB 2.65BB 2.57BB 2.34BB
IT Budget @1.50% $ 11.88BB $ 1019BB $ 5.94BB $ 4.09BB $ 3.98BB $ 3.86BB $ 3.51BB $ 2.78BB
$ 1.856BB
Note: Savings Banks and certain non-bank financials have been eliminated
Tower group has completed annual surveys of bank technology spending typically Banks spend between .5-1.5% of assets typically 70% of budgetary dollars are spent maintaining existent systems. Money Center Banks typically prefer to build custom / proprietary applications but do enter into JDA agreements when appropriate.
The next segment of U.S. banks includes superregional banks (e.g. SunTrust, USBancorp, Wells Fargo). Superregionals have roughly $100B to $500B in AUM. Superregionals also have the ability to drive significant transaction volume through TradeServer, although within this segment, Superregionals emphasize certain suites of commercial services above others. Superregionals that emphasize payments, trade services and trade finance are prime partners and customers for a TradeServer as a packaged application.
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Tier 2 13 Super Regional Ranked 11-25 Assets 100B to 46B

IT Budget @ 0.50% $499MM 431 MM 424 MM 424 MM 423 MM 380 MM 379 MM 372MM $ 354MM $ $ 323 MM $ 24MM 235 MM 230 MM IT Budget @1.00% IT Budget@ 1.50%
Assets 11 SunTrust Banks Inc., Atlanta 12 U.S. Bancorp, Minneapolis 13 HSBC USA Inc., New York (f) 14 KeyCorp, Cleveland 15 National City Corp., Cleveland 16 Bank of New York, New York PNC Financial Services Group, 17 Pittsburgh 18 Firstar Corp., Milwaukee Wachovia Corp., Winston-Salem, 19 N.C. 20 State Street Corp., Boston BB&T Corp., Winston-Salem, N.C. 23 (a) 24 LaSalle Bank NA, Chicago (f) 25 Mellon Financial Corp., Pittsburgh 99,751.0 86,174.0 84,825.3 84,719.0 84,600.6 76,063.0 75,737.0 74,429.8 70,811.0 64,630.0 48,796.1
$ 998 MM $1,496MM 862MM 848 MM 847MM 846 MM 761 MM 757MM $ 744 MM 708 MM 1,293 MM 1,272 MM 1,271 MM 1,269 MM 1,141 MM 1,136 MM $ 1,116 MM $ 1,062 MM $ 969 MM $ 732 MM $ 704 MM $ 690 MM
$ 646 MM $ 488 $ 470
46,957.7 $ 46,029.0
$ 460
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y y y
y y y
Super regionals, with the exceptions of BONY, State Street and Mellon, lack a clear focus or differentiating strategy for their businesses. They are typically products of opportunistic acquisition throughout the 80s-90s. As a group they are most likely to be have less than 50% of the earnings in fee based businesses. y Rely on Interest-spread income, and more traditional banking products. Thus, are subject to the credit/business cycle. y As a group, with noted exceptions, they are suffering earnings disappointment, 20-30% loss in market cap from highs in late90s. y As a group they are more cautious and less technologically sound than either the Money Center or Regional Group. They typically are less advanced because their IT efforts have been focused on integration of acquisitions rather than the progressive acquisition and integration of new technologies. With the exception of Wachovia and PNC this group tends to be followers to late followers in technology adoption especially E-Commerce. y Super regional have IT budgets of between .5% and 1% of assets although budgets can go as high as 1.5% in select organization for select projects e.g.Y2K. y Typically super regional prefer to buy packages with heavy customization. y Typically they prefer not to develop cutting edge technology themselves but, Select Super Regional can and will be JDA partners with GCS. Some of the rank will also be prime ASP prospects due to a certain degree of techno-phobia within this group. Super Regional typically offers the same product suite as Money Center banks although with less scale. y Their primary market is Mid-Market Corporate Accounts with local Fortune 500/1000 level customers rounding out the mix. y Super regional as a whole offer a surprisingly robust suite of treasury management and payments. They have significant customer bases of between 5-20K corporate banking customers and 150k-300k small business customers.
The next U.S. bank segment includes regional banks (e.g. UMB Bank, Wachovia). Regional banks range in size from $10B in AUM to $100B in AUM. Regional banks have less complete service lines than their larger bank counterparts, and many regional banks outsource whole product lines and associated IT systems to larger banks. Regionals that emphasize payments, trade services and trade finance are prime partners and customers for a TradeServer as a packaged application. Regionals that do not emphasize payments, trade services and trade finance as their key service line are also potential customers for TradeServer, but more than likely, the TradeServer will be ASPed through superregionals or money center banks.
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Tier 3 Regional 22 Ranked 25 to 47 Assets 20B to $45B

26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 Fifth Third Bancorp, Cincinnati Southtrust Corp., Birmingham Regions Financial Corp., Birmingham Amsouth Bancorp, Birmingham, Ala. Comerica Inc., Detroit Summit Bancorp, Princeton, N.J. Northern Trust Corp., Chicago Sovereign Bancorp, Wyomissing, Pa. (T) Union Planters Corp., Memphis Unionbancal Corp., San Francisco (f) Charter One Financial, Cleveland MBNA Corp., Wilmington, Del. Citizens Financial Group, Providence, R.I. Huntington Bancshares, Columbus, Ohio Harris Bank, Chicago (f) Popular Inc., San Juan, P.R. Dime Bancorp, New York (T) Marshall & Ilsley Corp., Milwaukee First Security Corp., Salt Lake City, Utah Old Kent Financial Corp., Grand Rapids, Mich. Astoria Financial Corp., Lake Success, N.Y. (T) M&T Bancorp, Buffalo, N.Y. Zions Bancorp, Salt Lake City First Tennessee National Corp., Memphis 44,723.9 44,344.5 42,901.5 42,584.0 41,065.0 38,985.1 36,848.1 35,860.1 34,226.8 33,895.0 32,222.3 32,137.6 30,225.1 28,765.0 28,585.0 26,451.2 25,259.0 25,173.9 22,509.1 22,203.0 22,201.0 21,746.1 21,458.4 19,804.6
y y
These regional typically serve the large mid-market banks in their footprint who require all services that can be offered by Money Center or Super-Regional, admittedly on a smaller scale. Also of note the Tier 3s have as a group an asset size of what 3-4 years ago would be classified as a super-regional. M&A activity among tier3 and tier4s will be very robust next 2-3 years.
The last bank segment is community banks. Community banks serve individuals and small to medium size businesses within their own city or state. Community banks are relationship based, and often outsource a large percentage of their service line to larger correspondent banks who have the economies of scale to deliver the services in a cost-effective manner. Community banks may also outsource to data services providers i.e. Fiserv, Altell, M&I etc. Community banks compete on relationship, geography, and the size of business that they serve. Community banks are customers of TradeServer insofar as money center and superregional banks will ultimately extend their own versions of TradeServer to the community banks that that they have corresponding banking relationships with.
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Super Community Ranked 51-75 Assets 18B to 10B

51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 Compass Bancshares Inc., Birmingham BankNorth Group, Portland, Me. (T) BankUnited Corp., Houston (Q2) (T) Allfirst Financial Inc., Baltimore(f) BancWest Corp., Honolulu (f) Hibernia Corp., New Orleans, La. Greenpoint Financial Corp., New York (T) European American Bank, Uniondale, N.Y. (f) Capital One Financial Corp., Falls Church, Va. American Express Centurion, Midvale, Utah North Fork Bancorp, Melville, N.Y. Pacific Century Financial Corp., Honolulu Providian National Bank, Tilton, N.H. Commercial Federal Corp., Omaha (Q4) (T) Synovus Financial Corp., Columbus, Ga. Associated Banc-Corp., Green Bay, Wis. Colonial BancGroup Inc., Montgomery, Ala. Michigan National Corp.,Farmington Hills (f) Provident Financial Group, Cincinnati Centura Banks Inc., Rocky Mount, N.C. Commerce Bancshares, Kansas City, Mo. Webster Financial Corp., Waterbury, Conn. (T) TCF Financial Corp., Minneapolis People's Bank, Bridgeport, Conn. (T) FirstMerit Corp., Akron, Ohio Downey Financial Corp., Newport Beach, Calif. (T) 18,937.5 18,493.6 18,197.6 18,041.8 17,837.1 15,962.3 15,767.3 15,194.5 15,126.9 14,905.2 14,682.7 14,294.6 14,165.6 13,800.0 13,685.9 12,998.3 11,620.0 11,494.0 11,438.8 11,300.0 11,229.0 11,188.3 10,905.7 10,687.1 10,482.0 10,477.0
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Community 10Bto 7B Assets Ranked 76-100

77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 First Citizens Bancshares, Raleigh, N.C. First Virginia Banks Inc., Falls Church, Va. Sanwa Bank California, Los Angeles Hudson United Bancorp, Mahwah, N.J. Hudson City Bancorp, Paramus, N.J. (T) BOK Financial Corp., Tulsa, Okla. CCB Financial Corp., Durham, N.C. (a) First National of Nebraska, Omaha City National Corp., Beverly Hills, Calif. Old National Bancorp, Evansville, Ind. Mercantile Bankshares Corp., Baltimore Citizens Banking Corp., Flint, Mich. Sky Financial Group, Bowling Green, Ohio Capitol Federal Financial, Topeka, Ks. (T) Emigrant Bancorp, New York (T) Commerce Bancorp, Cherry Hill, NJ Roslyn Bancorp, Roslyn, N.Y. (T) National Commerce Bancorp, Memphis Wilmington Trust Corp., in Del. Cullen/Frost Bankers Inc., San Antonio, Tex. UMB Financial Corp., Kansas City, Mo. Imperial Bancorp, Inglewood, Calif. Independence Community Bank Corp., New York (Q1) (T) 9,943.9 9,415.6 9,386.0 9,109.9 8,888.9 8,819.2 8,777.0 8,736.2 8,676.8 8,322.6 8,239.0 8,146.0 8,111.0 7,984.2 7,472.0 7,464.1 7,454.5 7,371.8 7,364.3 7,328.0 7,097.4 7,086.2 6,776.9
Canadian Banks
Canadian banks are very heavily consolidated. The five largest Canadian banks (Scotia, Royal Bank of Canada, CIBC, Bank of Montreal) represent the entire traditional bank industry in Canada. Credit unions cover the remaining consumer base. As such, every Canadian bank acts as the equivalent of a US money center bank. Canadian banks all have a significant global footprint, although many partner with local banks to leverage the partner banks IT investments in the local market. For example, Scotia bank partners with Barclays for U.K. payment origination. All of the five Canadian banks are prime partnering and customer opportunities for the GCS TradeServer. Canadian bank systems and payment regulations closely resemble the U.S. environment, however they rely more heavily on foreign markets. Canadian banks will want to repurpose TradeServer for Asian and European markets soon after a Canadian launch.
Western European Banks

Like Canada, the Western Europe banking market is highly consolidated.
Asia Pacific Banks

TBD
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Market Window
The market window for TradeServer as it applies to traditional bank financial institutions is extremely small. Within six months to a year, many key customers will have chosen a technology partner for the trade finance enabling application that will allow them to bring their payment and financial services online. Within 18 months, the market window for TradeServer as it applies to B2B marketplaces and large corporations will also be spent. The market window for TradeServer as it applies to the end-customer is larger and indeterminate. The assumption is that until online B2B payments are adopted in a significant way, there will not be an appropriate foundational layer for TradeServer to have a market that extends directly to end businesses without bank sponsorship. As such, one can assume that the market window does not open up until six months from now and will not close until at least 24 months from now.
Market Share
The market penetration for TradeServer as it pertains to other like products sold to traditional bank and non-bank financial institutions is effectively zero today. There are few vendors that are attacking the B2B payments space with financial institutions being the initial customer. GCS should realistically expect a 25% market penetration for TradeServer in this segment given the current absence in competition. At 10% market penetration with a total audience of 3,000 bank financial institutions (see Market Size above), GCS would realize roughly 300 licenses of TradeServer. For financial projections, this should be amortized over a five year period. The market for TradeServer as it may be extended to the end commercial customer is to be determined.
Barriers to Entry
TBD
Competition
TBD
Bank partnerships
TBD
Global discrepancies in market requirements

TBD
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Competitive Landscape
Competition for enablers of the B2B financial supply chain is highly fragmented, with few players having actual applications or customers. Competition is divided into two segments: ASP Disintermediators and Direct Software Providers. ASP Disintermediators base their business model on extending one or more financial services directly to emarketplaces, buy side and sell side applications. To fulfill the actual financial services (versus merely facilitating its transmission) ASP Disintermediators either partner with a small number of financial institutions that compete for the right to provide the service or secure financing to absorb the financial risk themselves. ASP Disintermediators that leverage a bank partnering model include: E-Credit, eTime Capital and Verisign Payment Services (formerly Signio). ASP Disintermediators that take on the financial risk themselves include Aceva (formerly known as InPurchase) and iEscrow. ASP Disintermediators have a stronger value proposition to the end customer because they have historically moved faster than commercial banks to meet market needs and are substantially more willing to buy business. Still, ASP Disintermediators have had very little traction there as well. This is for two reasons: y End customers (buyers, suppliers and e-marketplaces) do not have a trusted relationship with the ASP Disintermediators to begin with. Despite the slower time to market of a commercial bank, many end customers would prefer to wait for their trusted provider of financial services to provide this directly to them. GCS conversations with e-marketplaces (o2e, NTE) validated this. Most ASP Disintermediators are putting the cart before the horse by tackling features like credit and AR financing before a common payments infrastructure is in place. This limits adoption as the current pain point in B2B is payments, with value added services to come later.
Direct Software Providers sell B2B financial supply chain enterprise applications to financial institutions and large corporations on a direct channel, license fee basis. GCSs near-term business model most closely resembles these providers. Direct Software Providers in the market are a hodgepodge of old B2C electronic bill presentment vendors, recently formed startups and old treasury portal vendors.
Industry Trends
There are a number of existing and emerging trends and standards that are applicable to TradeServer. Many of these trends are industry standards (i.e. de facto), but have significant momentum and rapid adoption (i.e. cXML). The identified trends and standards that TradeServer should be cognizant of include: y JCP Trustbase Identrus Specifications: especially, the Transaction Coordinator (TC) y Elanor group Trade and payments specifications. This is probably the most important standard for GCS to track in the near term. y XML standards including cXML and CBL for trade related business objects (for example Purchase Orders, Invoices, etc.). y Other emerging standards: UDDI and ebXML .
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Positioning
In the simplest terms, TradeServer is a software product that acts as an on-line platform for an FIs existing and planned trade finance products, which allows the FI to participate in B2B e-commerce transactions. TradeServer should be positioned as a GCS solution which is comprised of both product and services. The GCS services that will support TradeServer will include Learning Services, Client Services, and Managed Services. TradeServer is focused on the post-procurement segment of the trade cycle. TradeServer is complementary with e-procurement and exchange applications such as Ariba and Commerce One. Finally, TradeServer should be positioned as a complementary solution to the GCS CertFi Identrus Express services offerings. CertFi is focused on addressing and mitigating operational risk while TradeServer is focused on addressing and mitigating financial risk. By addressing both operational and financial risk, GCS has a uniquely differentiated story. Over multiple releases, TradeServer customers can expect comprehensive, flexible functions to meet their needs including: y "Electronic signatures" allowing authorized parties to use Identrus Global ID certificates to "sign" their payment messages; y Validation of the identities of buyers, sellers and third parties via basic and Identrus authentication; y Non-repudiation of transactions; y Payment options meeting the full range of settlement variables encountered in global electronic commerce; y Negotiable payment obligations that can be discounted to the seller to accelerate cash flow and reduce Days Sales Outstanding; y Escrowing of transactions y Flexible payment options for the buyer that can be used to finance the transaction; y On-line transaction dispute functionality including transaction history; y Pre-built interfaces into payment systems including ACH; y Compatibility with any application that issues Purchase Orders/Sales Orders in a cXML or CBL format;
Value Proposition
The value proposition of the proposed application is extensive. The banks value proposition falls into four categories: Brand E-procurement was the first enterprise application that touched almost every employee in the organization (previous ERP applications seat licenses restricted use to a limited set). E-payments will be the second application, which offers the banks the ability to extend their brand to every employee in their customers organizations. Channel TradeServer provides a new inexpensive channel for banks to offer core financial services (payments, guarantees and trade finance) at a markedly lower cost. This will allow banks to improve their margins on existing customers and acquire new customers that previously were too expensive to service. Defense Banks relationships with their customers is being disinitermediated in B2B e-commerce. TradeServer provides them with a means to counteract competitors like Verisign Payments and InPurchase.
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GCS Proprietary
Friction reduction TradeServer does not just channel bank services to end users, it reduces the friction and paper associated with financial services and the end user. Currently, B2B procurement creates substantial cost savings for users by eliminating paper in the procurement process and automating approvals. Because procurement ends at the purchase order, payments are still a paper process with associated costs. As banks sponsor this online payments offering for their customers, they can price above the normal service price for this increased efficiency. For example, Deutsche created a payment application that enabled EFT for e-marketplaces. Due to the added value of reduced friction to the end users, Deutsche was able to charge $1.00 per transaction for a services that they normally charge $0.01 (a 10,000% markup). The value proposition to buyers is fourfold: Paper elimination TradeServer will eliminate paper checks for online transactions, which is a source of substantial friction and cost in the offline world. Reducing paper also reduces error rates and the associated timely and costly dispute process. Financing TradeServer can implicitly carry accounts payable financing (e.g. pay 60 days after receipt of order) to credit worthy buyers in a seamless fashion. Provided the terms are appropriate, buyers will always take the option of more time to pay. Information management TradeServer will allow buyers to capture the financial information associated with their payments electronically. These reports could be mapped to GL account codes for seamless ERP integration as well. Pricing Currently, the primary online method of payment is purchasing cards which cost suppliers 2-3% of gross margin. As suppliers are given the option to receive payment by EFT that do not carry a 2-3% cost, they may pass on some of those savings in the form of lower prices to the buyers. The value proposition to suppliers is fourfold: Paper elimination TradeServer will eliminate paper checks for online transactions, which is a source of substantial friction and cost in the offline world. Reducing paper also reduces error rates and the associated timely and costly dispute process. Financing TradeServer can implicitly carry accounts receivable financing (e.g. pay 60 days after receipt of order) to credit worthy suppliers in a seamless fashion. Provided the terms are appropriate, suppliers will always take the option of less time to pay. Information management TradeServer will allow buyers to capture the financial information associated with their receivables electronically. These reports could be mapped to GL account codes for seamless ERP integration as well. Pricing Currently, the primary online method of payment is purchasing cards which cost suppliers 2-3% of gross margin. Suppliers will welcome an automated payment option with the expediency of a purchasing card but a reduced transaction fee.
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Key Differentiators/Themes
When approaching financial institutions, GCS can differentiate our solution for several reasons: y As the term suggests, ASP Disintermediators represents a long-term threat to commercial banks. Their business model is predicated on either a) assuming the customer relationship and relegating the bank to the position of a back office transaction processor or b) assuming the customer relationship and the financial risk and disintermediating the bank all together. y As an ASP service that requires uniform functionality across bank users, banks that channel their services through ASP Disintermediators have no basis for differentiation except for price.
GCSs competitive advantage against all of these competitive players hinges on a number of core strengths: y The TradeServer product is focusing on links in the financial supply chain that most of the Direct Software Providers have not focused on to date: payment workflow and event management. Many of the competing vendors have focused on the back end of payments (i.e. JCP, S1, BankServe) where the application provides a thin API that triggers a series of bank payment systems. This is not GCSs focus and we may partner for this capability. Other software providers are focused on the front end invoice management and dispute functionality (e.g. Bottomline and Checkfree). This is not GCSs focus and is also partnerable functionality if required in the future. TradeServer manages payment workflow that bridge the gap between the purchase order/invoice processes and the initiation of debits and credits via popular EFT networks. GCS has the focus of a newly formed startup dedicated to the B2B financial supply chain as opposed to older B2C EBPP and treasury portal vendors that are attempting to repurpose technology that is severely compromised in the B2B sector. GCS has the infrastructure, staff, channel partners and business relationships to beat the newly formed startups to market.
Ultimately, GCS will be pursuing phase II opportunities around value added services that GCS will deploy like an ASP Disintermediator. While this opportunity is almost too nascent to predict, our competitive advantage is based on: y Leverage credibility and brands from installed base of bank customers from phase I. y Build value added services upon the installed base of TradeServers where GCS will have proprietary knowledge of the APIs, architecture and functionality. y Public market presence to acquire needed functionality on a rapid basis
Risks
y Lack of focus: GCS has a history of trying to develop multiple products in parallel without any success. In order for TradeServer to materialize as a commercial product, it will take the undivided attention of both Product Development and Product Management. This means that the productization of the GE custom applications, NetProcure and NetReports, should be deferred. Scope: As with any software product release, features must be closely examined and prioritized. In order to be successful, GCS must manage scope creep and refrain from major deviations three months into the development cycle. Execution: It is critical that both Product Management and Product Development execute their deliverables according to the development process. This includes the creation of a Product
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Requirements Document, Software Requirements Specification, and other related design and test documents. In prior releases, many of these deliverables were skipped, resulting in missed dates and incomplete assignments.
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Product Description
TradeServer is an exchange independent software product that is focused on bringing the financial supply chain on-line. TradeServer is focused on post-procurement services which means that the procurement phase has already been completed. TradeServer will initially appeal to these two audiences: The TradeServer offering empowers financial institutions to assume a significant leadership position by providing financial trade services for on-line B2B e-commerce. The solution is a bank hosted software product that is focused on eliminating the friction in the on-line financial supply chain. By bringing identity, payment and transaction management services on-line, financial institutions can capitalize on the significantly untapped post-procurement services space. According to the Gartner Group, only a mere 15% of current on-line exchanges offer any services to trading partners once a purchasing decision has been made. TradeServers value proposition is focused at two audiences: y Financial Institutions - TradeServer will allow banks to offer their existing products, including payment and trade finance services, to on-line B2B business transactions. This will open the door for banks to extend their product offerings into higher margin products such as lines of credit, escrow, warranty, factoring, and other risk management products. Trading Partners - TradeServer will support a variety of on-line B2B transactions regardless of their origin or point of settlement. Therefore, TradeServer will augment existing eprocurement applications, on-line exchanges, sell-side applications, or even transactions that originate off-line. Buyers, suppliers, and trading exchanges will be able to leverage new on-line financial products and services to maintain a competitive edge in an ever-competitive on-line B2B market.
At the highest level, TradeServers feature set is focused on: y y y Enabling trusted e-commerce via Identrus branded authentication services for all trading partners (buyers, suppliers and financial institutions). Supporting a variety of B2B financing and payment services including electronic funds transfer (ACH, Fedwire, SWIFT), credit-card, paper check, escrow, lines of credit, and others. Transaction management services for presenting, disputing, and reporting B2B financial transactions
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Product Rationale
There are two methods (not necessarily exclusive of one another) for deploying a TradeServer. One model is to replicate the invoice, invoice dispute and accounts payable/accounts receivable controls process online as a large business document workflow. This may be the ultimate model, but for the time being, this approach has several flaws. The primary flaw is the current absence of invoice generation capabilities in online commerce. Many vendors are beginning to attempt to create solutions that will handle invoice generation and management, but currently, there is very little adoption. Moreover, the replication of this invoice, dispute, AR and AP processes requires extensive ERP systems integration to thousands of buyers and suppliers or the requirement that buyers and suppliers manually enter invoice, AR, AP and dispute information. The ERP integration requirements are too extensive to maintain a reasonable cost of implementation for the application and the manual entry option is more time consuming than the current offline process. The alternate method is TradeServer as a virtual purchase card. In this model, the traditional invoice process is circumvented in favor of a business process that emulates the way p-cards are used today, only at lower cost, with more favorable terms and a more flexible value proposition. A diagram of the already well adopted online p-card process as well as the improved TradeServer process follows.
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Traditional procurement card process
Contaings P-card account #

$
VISIO CORPORATION
$
$
$
$
$ $
PO Purchaser The purchaser selects items from a vendor and submits a purchase order using an Ariba, C1, Clarus or Oracle procurement application Supplie r Supplier receives PO and begins to fufil order. Supplier also take the Buyer's P-card number and inputs it into an EDC terminal to check for availale funds. TSYS, First Data Credit card transaction processor checks buyer's available credit against its records. Confirms within seconds that the transaction is approved and guaranteed. Overnight, transaction processor updates buyer's account information to reflect the reduction in available credit.
Accounts Receivable Merchant's Bank Pending confirmation of available funds, the supplier's accounts receivable group submits all outstanding P-card charges (as credit card drafts) nightly to their bank. Merchant's bank credits the Merchant's account. The bank then submits all outstanding credit card drafts for all of their suppliers to Visa, Mastercard, AMEX.
Over FedWire
Merchant's Bank Credit card company pays the Merchant's bank, less a 2-3% transaction fee
Card Issuing Bank (Buyer's Bank) Card issuing bank pays the credit card company.
Credit card company adds up all of the money that each cardissuing bank owes.
Credit card company receives all of the merchant's bank's credit card drafts and sends them to each of the card-issuing banks where they came from.
$ $ Accounts Payable The buyer's accounts payable group receives a bill at the end of the month from the card issuer for all outstanding charges. AP must pay within 28 days of receipt of bill or face finance charges.
Figure 4: Traditional procurement card process
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TradeServer payment process
Contaings TradeServer account
Over ACH
VI I O COR O RATION
$ $
PO P r
T S

TradeServer receives account num er and checks for availa le funds or credit on the uyer's side.
T S

Card Issuing Bank (Buyer's Bank) Funds leave the uyer's ank account.
Figure 5: TradeServer payments process
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TradeServer notifies supplier that uyer has availa le funds and that it is a guaranteed payment. TradeServer nightly updates Buyer's account information to reflect reduced availa le funds or credit.
The uyer's accounts paya le group receives an electronic ill with line item detail. Buyer pays immediately or up to 65 days after receipt of electronic ill notification, minus a transaction fee (percentage or fixed).
Over ACH
T S

$
Accounts Paya le
T e pur er selects items fr m a vendor and su m its a purchase order using an Ari a, C , Clarus or Oracle procurement application
Supplier receives PO and egins to fufil order.
Pending confirmation of availa le funds, the supplier's accounts receiva le group request payment for goods shipped.
TradeServer credits the supplier's account immediately or up to 65 days after, minus a transaction fee (percentage or fixed).
Mer
Funds hit the supplier's ank account.
er
Supplie r
Accounts Receiva le
T S
t' B

Payment network adoption plan

Retail Systems Low $/ High Volume Wholesale Systems High $/ Low Volume CHIPS S.W.I.F.T.
Foreign Exchange
VISA
Domestic
ACH VISA Direct Debit
FedWire
United States United Canada Australia Pan Asia

!
ther
= arket Entry = Product igration
Figure 6: Payment network adoption plan
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Functional Overview
At a more granular level, TradeServer is being implemented as an enterprise class J2EE-EJB compliant product that will run on the market leading application servers. TradeServer is built on top of a layer of Java based services that provides workflow, reporting, security, logging, organizational maintenance, user management, and Identrus authentication. These are the core, infrastructure components that enable TradeServers authentication, payment initiation, and transaction management features. The above-mentioned services are integrated together to power six key TradeServer product characteristics. These include the following: y y y y y y Organizational Management Registration, maintenance, and authentication of organizations utilizing TradeServer Payment Engine The engine that powers payment instrument execution, payment business rules, and payment event management Trade Community Integration Integrating the systems of exchanges, sell-side applications, and supplier back-offices Financial Transaction Warehousing The storing of TradeServer transactions and the reporting/analytics performed on the data Transaction Collaboration The collaboration tools for trading partners to communicate in near real-time regarding mutual transactions TradeServer Network Community The integration of distributed TradeServers for the purpose of wholesaling financial products to community banks
Product Lifecycle
Proposed Release Plan

TradeServer should be in Beta stage by end of 1st quarter, 2001, with general availability by end of Q2 2001. The first release of TradeServer will be limited to the smallest set of features that still provide a market viable, saleable product. Based on initial discussion with Bank of Montreal and US Bank, this set of features would include:
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y y y y y y y
A limited number of inputs including a cXML and CBL Purchase Order. A payment initiation feature that could be triggered automatically by the receipt of a PO or manually based on a manual request. Payment workflows based on a set of pre-negotiated trade terms between trading partners. Payments workflows that support ACH credit & debit and credit card passthru. Basic transaction dispute, transaction reporting, and administration features. Simple approval workflow that allows a registered TradeServer user to approve a payment transaction. Basic user id and password authentication plus Identrus authentication as part of a payment transaction.
In future releases, TradeServer will support a distributed function that will allow for an exponential value proposition through a community of TradeServers. This will enable a hierarchy of banks to offer an aggregated portfolio of financial products to its commercial customers while retaining 100% of their brand recognition. For example, a regional or community bank may augment their on-line financial product offerings with additional products that are wholesaled from an a corresponding super regional bank. This will provide the basis for syndicating bank services including credit syndication.
GE and TradeServer
In addition to a distributed TradeServer feature, GCS will also explore the value proposition and market demand for productizing NetReport (a custom GCS-GE application) as a TradeServer compatible product or feature. The basic value proposition is that customers will desire not only level 3 data from their credit card transactions, but they will also desire level 3 data from their on-line transactions processed through TradeServer including, but not exclusive to, ACH transactions. This also includes the ability to correlate an organizations accounting codes with the line item transaction details. There have been a number of suggestions to productize NetProcure (a custom GCS-GE procurement application) with TradeServer. At this time, the market demand and business case is unknown and unproven. According to the McKinsey study, GCS was advised to avoid the procurement space in the trade cycle due to competitive pressures and market opportunity elsewhere (opportunity cost). Based on that recommendation, the TradeServer product is completely independent from the NetProcure custom application. However, that does not prohibit NetProcure from being modified to create TradeServer compatible Purchase Orders to illustrate compatibility.
Release Cycle
TradeServer will follow a six-month major, three-month minor release schedule.
Migration Plans NA for 1st release

Forward Compatibility Support for integration with other TradeServer applications (see below).
Backward Compatibility
There are no backward compatibility requirements.
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End-of-Life Plan
TBD
perating Environment
All operating environment decisions must meet a two-pronged test: time to market and performance. Time to market implies that any component of the operating environment that substantially extends product release schedules is not an appropriate operating environment. A substantial extension of a product release is defined as an additional one or more months to a major or minor release. Performance implies that the operating environment must strictly support an end solution that is scalable, reliable, auditable and fast. While these attributes are desirable in most applications, they are at an utmost premium for TradeServer. Any operating environment decision that substantially erodes the products scalability, speed, reliability or auditability is not an appropriate decision. Installed base, market adoption, price and ease of use are NOT appropriate factors for operating environment decisions. The GCS managed service offering nearly eliminates constraints placed by market adoption, ease of use and installed base. Price is not a relevant consideration either since money center and superregional banks have vast IT budgets, and the remaining customers will consume TradeServer on an ASP basis.
perating System
Solaris is the required operating system for TradeServer. In the future, NT and OS/390 may be considered based on market and customer demand.
Databases
Oracle is the required database for TradeServer. In the future, other RDBMS may be considered (e.g. UDB, Sybase, etc) based on market and customer demand.
Application Servers
BEA WebLogic is the required application server for the first release of TradeServer. In the future, other application servers including IBMs WebSphere, Bluestone, SilverStream and iPlanet may be considered based on market and customer demand.
Browsers
Both Netscape Communicator V4.x and above and Microsoft Internet Explorer V4.x and above must be supported in the first release of TradeServer.
Web Servers
Any Apache compatible web server is appropriate for TradeServer.
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Legacy Applications
TradeServer should support integration with three core sets of legacy applications and some minor additional applications. TradeServer should be able to quickly integrate with and use the data from bank systems, bank customers systems and e-commerce systems. y Bank systems include payment systems (ACH, S.W.I.F.T., FedWire, CHIPS, and ECPS) and customer databases. In future releases, bank systems may also include credit scoring, foreign exchange and risk management systems. Bank customers systems include SAP, PeopleSoft, Oracle Financials, Baan and JD Edwards. E-commerce systems include XML connections to Ariba, CommerceOne, Oracle and Clarus eprocurement and B2B marketplace applications. E-commerce systems also include XML compatible sell-side applications including Broadvision, OpenMarket, Intershop, Interworld and Ironside.
y y
TradeServer must integrate on a pull (drawing legacy information out) and push (adding new information into the legacy systems) basis.
Standards
Applicable Standards
ACID. Identrus/FITG payment specification. cXML, CBL, OAG, EBXML.
Adoption Steps
Identrus is fast becoming a de facto standard for financial institution e-commerce security and trust. TradeServer must support Identrus certificates in its first release. cXML CBL and OAG are all leading XML protocols for B2B commerce that TradeServer will need to send and receive messages from. webMethods B2B should be able to provide support for these standards in TradeServers first release. EBXML is a more advanced XML standard to be considered for future releases.
Product Feature Requirements

CommerceServer
CommerceServer is the component of TradeServer that provides transaction management for all business processes, regardless of the segment of the trade cycle that TradeServer is facilitating (e.g. searching, order entry, payment, and credit). CommerceServer is the platform for specific business functions that TradeServer will automate over the internet, but it has open, thoroughly documented APIs so that a professional services organization can add new functionality to TradeServer on a project basis or replace existing functionality of Business Functions all together. In future releases, a development kit that accelerates development upon CommerceServer would be appropriate.
App Server - Essential

Market adoption of application servers as the foundation for e-commerce adoption is extensive. The scalability support that application servers provide has proven to be an essential credibility factor for high-
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end solutions. CommerceServer must support the use of a third party commercial application server. The application server will provide multithreading, persistence, failover and additional security.
Authentication Essential
Trust and security are important throughout the B2B trade cycle, but they are critical for TradeServer. CommerceServer needs to include authentication functionality such that users of TradeServer can use Identrus or Verisign compatible digital certificates to authenticate the identity of the buyer, supplier, issuing bank or acquiring bank. CommerceServer must be flexible as to which events trigger authentication (e.g. initiation of a payment, dispute, invoice) and the conditions for specific events triggering authentication (e.g. high dollar volume transactions, new trading partners, pay on ship events versus pay on receipt events, etc). Authentication should tie to user and workflow administration functionality such that buyer, supplier or bank admins can set independent business rules for which events are most appropriate for authentication.
Hierarchy - Essential
Manages roles and permissions of employees, organizations and businesses. CommerceServer includes hierarchy management, which allows individual, buyers, suppliers and exchanges to establish approval hierarchies for business processes so that the financial controls of different TradeServer users can be observed.
Monitoring - Essential
CommerceServer must be able to provide administrators with real-time and historical monitoring of live transactions passing through trade server.
Reporting & Analysis

TBD
Security - Essential
Standard application security model.
Warehousing - Essential
Exports all transaction related data into a data warehouse that can be queried by business intelligence tools.
Workflow - Essential
CommerceServer includes workflow for managing business processes. The workflow must be configurable to meet the requirements of business processes that are unique to each buyer, supplier and exchange and that are unique to specific segments of the trade cycle (e.g. the payment process vs. the marketing process). User Management
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CommerceConnect - Essential
CommerceConnect will handle all legacy systems integration. The commerce connect layer of TradeServer needs to make bank legacy applications (ACH, ECPS, S.W.I.F.T., credit card, S1, Politzer & Haney), bank customer legacy applications (SAP, Oracle Financials, PeopleSoft, Baan, JD Edwards), databases (all JDBC compliant) and messages (cXML, CBL, OAG, EBXML and MQSeries) uniformly available as both resources and output destinations for the rest of the application. CommerceConnect also needs to abstract these different data formats into a common one so that CommerceServer and Business Functions do not need to be aware of the location and the type of data that they are dealing with. Integration with bank legacy applications will support TradeServers initiation of credits and debits to the accounts of suppliers and buyers. Integration with customer legacy applications will allow the extraction of purchase orders and invoices/sales orders from their ERP systems as well as input of historical payment information into the accounts receivable, accounts payable and general ledger systems of buyer and suppliers. Integration with XML messaging protocols will provide the API with which TradeServer will connect to exchanges, buy side applications and sell side applications. In future releases, TradeServer will need to be able to integrate to additional bank legacy applications (e.g. credit scoring and foreign exchange) as well as shipper (e.g. FedEx, UPS) and currency exchange legacy systems. CommerceConnect will also need to be able to integrate the admin screens to bank treasury portal applications by companies like S1 and Politzer & Haney. Lastly, CommerceConnect will need to integrate, via XML, with major shipping vendors (e.g. FedEx, UPS) to transmit ship information.
Business Functions
Business functions leverage the data presented by CommerceConnect and the transaction management services provided by CommerceServer to automate specific elements of the B2B trade cycle. The first release of TradeServer will focus on the invoice, dispute, payment rules and payment initiation segments of the trade cycle.
Cross Border Payments Low Priority

Payments may be initiated by a buyer in a number of currencies including US dollars, Canadian dollars, British Pounds, Australian Dollars, German Deutsche Marks, Japanese Yen, French Francs and Euro. Suppliers may receive these payments in a different currency from the same list. Exchange rates will be determined by integration into one of the online foreign exchange rate services such as OANDA and other FX marketplaces on the date that the payment is initiated.
Dispute Management Medium Priority

Two way match (Medium Priority) TradeServer captures purchase orders and invoices to present them in a single view that matches line item skus. Three way match (Low Priority) TradeServer captures purchase orders, invoices and receipt notifications to present them in a single view that matches line item skus. Pre payment line item dispute (Medium Priority) Buyers or suppliers can dispute line item skus on purchase orders, invoices and receipt notifications and transmit items disputed, reasons for dispute and methods of remediation to their trading partner.
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Post payment line item dispute (High Priority) After payment has been executed (e.g. payment sent at the time of the purchase order) the buyer can examine the payment sent based on line item skus and dispute some or all of the payment. Based on the suppliers response (or not) the bank can reverse the payment. Buyers can input reasons for dispute as well
Fee Management High Priority

Fixed transaction fee (High Priority) Ability to record payment transactions and apply a fixed dollar fee to be deducted from the buyer and/or the suppliers trading account. Percentage transaction fee (High Priority) Ability to record payment transactions and apply a fee as a percentage of the dollar amount paid to be deducted from the buyer and/or the suppliers trading account. Subscription fee (High Priority) Ability to record the collective times and usage of members of an organization utilizing TradeServer and apply a time-base fee to their usage. User fee (High Priority) Ability to record the number of individual users in an organization using TradeServer and apply a time based fee to their usage of TradeServer.
Integration to CommerceServer - Essential

The business processes layer will integrate with the CommerceServer API to leverage both transaction services and CommerceConnect legacy data, message and processes resources. Invoicing TBD Legacy Invoice (Medium Priority) TradeServer can pull invoices generated from suppliers ERP systems and present them electronically through TradeServer to buyers leveraging webMethods B2B partner servers. Manual Invoice (Low Priority) TradeServer will allow suppliers to generate invoices using a utility to be presented to buyers through TradeServer.
Manual Input GUI Medium Priority

Manual invoices See above Manual payment initiation (Medium Priority) Buyers can manually initiate spot payments to suppliers using the payment network (e.g. ACH, p-card) and PRS (see below) of their choice.
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Federated TradeServer Medium Priority

TradeServer can communicate with like TradeServer owned by different bank customer (i.e. issuing and acquiring banks) to exchange and aggregate key business documents via XML. Exchange of purchase orders (Medium Priority) TradeServers can push or pull and then aggregate purchase orders to one another via XML. Exchange of invoices (Medium Priority) TradeServers can push or pull and then aggregate invoices to one another via XML. Exchange of payment requests (Medium Priority) TradeServers can push or pull and then aggregate payment requests to one another via XML. Exchange of disputes (Medium Priority) TradeServers can push or pull and then aggregate purchase orders to one another via XML. Exchange of PRS (Medium Priority) See payment rules. TradeServers can publish PRSs to one another via XML.
Notification - Essential
Notify buyer (Essential) Incoming invoice, outstanding approval, disputed payment Based on time, buyer in question, supplier in question, level in organization, bank enforced rule. Notify supplier (Essential) Outgoing invoice, incoming payment, disputed payment, incoming purchase order Based on time, buyer in question, supplier in question, level in organization, bank enforced rule. Notify administrator (Essential) Any of the aforementioned events
Payment rule High Priority

TradeServer must manage initiation of payment based on a number of different business rules. These rule options may be invoked individually (e.g. pay on a specific time) or in concert with additional rules (e.g. pay on a specific time, pending receipt of goods and approval by a manager). For the purposes of this document, a set of rules configured to govern the terms of a payment shall be termed a payment rule system, or PRS. PRSs can be specific to an individual payment, an individual in an organization, an organization, a business, a buyer/supplier pair or some combination of the aforementioned. Pay on time (High Priority Buyer must be able to pay suppliers based on specific times. Payments could be made some number of days/weeks/months after some specified event (e.g. thirty days after receipt of goods or 1 day after shipment of goods). Payments could also be set to automatically initiate on a specific calendar date (e.g. pay on March 3rd, 2001). Partial payment (High Priority) Upon receipt of invoice, a buying organization can select specific line items that they wish to pay (under a PRS) and other line items that they do not wish to pay. Buying organizations can also choose to pay for some or all of the goods invoiced in installments (e.g. pay 20% on issuance of a PO, 30% on ship and 50% on receipt of goods).
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Pay on condition (High Priority) Payments can be initiated based on certain outside conditions including receipt of purchase order, shipment of goods, receipt of goods and completion of dispute of invoice. Pay on approval (High Priority) Payments can be initiated based on the approval of certain individuals within the hierarchy of the buying and/or supplying organizations. Submit Payment Rules (High Priority) Buyer or supplier submits payment rules to their trading partner(s) via e-mail or a TradeServer admin screen for the other party to approve, based on prior trading agreements. Buyer or supplier can submit blanket rules to all trading partners available on the trade server or a subset of trading partners. Rules templates (High Priority) Once a PRS is created either by an administrator or a member of a buying or supplying organization, the PRS can be viewed and reused by its creator and other individuals and organizations that are given permission to see the PRS in question. Permissions are managed by the hierarchy component of CommerceServer. Continual pay (High Priority) Payment can be periodic and indefinite (e.g. pay $20 a month until I say otherwise). Drawdown pay (High Priority) Payment can be on an installment basis (e.g. pay this $234.11 invoice in four monthly installments or, pay one dollar a month until this $234.11 invoice is closed out). Preauthorization (Essential) Payment can be accepted or rejected by the bank based on account profile of user, organization or business entity that may indicate that they do or no not have available cash in their account or available line of credit. Information in profile does not have to be real time but can be updated periodically in batch format. This may require an ETL tool to extract account or line of credit information from existing bank systems.
Payment Float Manager High Priority

Financial institutions are anxious to be at the forefront of payments for interest income as much as fee income. Float manager separates buyer and supplier requested PRSs from one another to allow banks to finance the associated float and trade performance risk, or in the event they can not price to risk effectively, require the buyer and supplier to reconcile to a common PRS. PRS Match (High Priority) Matches PRSs of Buyers and Suppliers and presents them to Banks and trading partners. PRS Resolution (High Priority) Allows a bank admin to accept contradictory buyer and supplier PRSs. Also allows buyers and suppliers to accept contradictory PRSs based on changes to a larger trade agreement (e.g. discount on prices).
Payment Reversa - Essential

Upon mutual agreement by the buyer and supplier, TradeServer must be able to reverse some or all of an ACH, S.W.I.F.T., ECPS or credit card payment made some time in the past by debiting the suppliers account and crediting the buyers account through the network that the payment was originated from.
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GCS Proprietary
Payment Initiation - Essential

TradeServer can initiate credits and debits to buyers and suppliers accounts through major payment networks. ACH (Essential) Initiate an ACH payment debit and/or credit Credit Card (Essential) Initiate a credit card debit and/or credit ECPS (High Priority) Initiate an ECPS debit and/or credit S.W.I.F.T. (High Priority) Initiate a S.W.I.F.T. payment debit and/or credit
Registration - Essential
Admins of buyer, supplier and bank organizations can register their companies, their employees, and respective roles and privileges on TradeServer.
Reporting - Essential
TradeServer can create reports for buying and supplying organizations that have individual views for employees, organizational groups and business entities. TradeServer also creates reports for bank credit, payments and risk management employees. Lastly TradeServer creates reports for technical admins. Reporting is static and allows for drilldowns.
Internationalization Requirements
In order to meet a global market need, TradeServer must be I18N compliant, OUT OF THE BOX. TradeServer must also support multiple currencies and ultimately a mechanism for cross-currency payments (i.e. a payment initiated in British pounds that is settled in German Deutsche marks. See Appendix A: Internationalization for more detail.
Localization Requirements
Localization is not a requirement for the first release of TradeServer although the UI needs to have documented interfaces so that outside contractors may localize on an as-needed basis. See Appendix A: Internationalization for more detail.
Services Components
GCS services will be required to augment the TradeServer product. These services will include both implementation (i.e. Client Services) and post-implementation (i.e. Managed Services) services. By coupling GCS Services with the GCS TradeServer product, we will be able to offer a complete solution to our customers.
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GCS Proprietary
Learning Services
TradeServer will require specific learning services courses in order to be successful. These courses should be priced at approximately $500 per person/per day. Therefore, a three day course would list at $1,500 per person. The proposed courses include: y y TradeServer Introduction and Overview. Ideally, a one-day class intended to educate GCS and non-GCS users on the TradeServer product. TradeServer Installation and Configuration: Ideally, a two-day hands-on class intended to educate system administrators on how to physically install and configure the TradeServer product (including the database). Optionally, this class could address performance and tuning characteristics as well. TradeServer Design: A two-day hands-on class that would educate users (typically AP and Bank Finance experts) on designing payment workflows, setting up custom hierarchies, and creating custom trade agreements in TradeServer. TradeServer Deployment: A class for bank business owners on the deployment, marketing and market adoption of TradeServer supported functionality to the end customer.
Managed Services
TradeServer will require specific managed services in order to support the product in a production environment. All GCS Services need to be priced according to the ASP model. Therefore, per user/per month and/or per server/per month fee structures are required. The proposed managed services include: y TradeServer hosting service: GCS will be responsible for hosting the TradeServer application and related components including web server, database, and application server. It is required that GCS form a minimum of two relationships with ASP infrastructure players such as Navisite, Digital Island, Qwest Cyber Solutions, or Exodus in order to support the network and hosting requirements. In this scenario, GCS will own the customer relationship and service level agreement (SLA). TradeServer management services. GCS will be responsible for managing the TradeServer application regardless of whether its hosted by GCS or the customer. This service will monitor TradeServer to ensure maximum availability and performance. Third party tools and/or services such as Freshwater, BMC Patrol, or IBMs Tivoli may be required.
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GCS Proprietary
Client Services
TradeServer will require a number of custom integration services to support a complete solution. All GCS Client Services offerings will be priced according to time and materials. Therefore, each engagement will need to be scoped independently before quoting a price to a potential customer. The proposed GCS Client Services offerings include: TradeServer Source API integration: This GCS service will provide the custom integration in order to integrate e-procurement, exchanges, and sell-side applications into the TradeServer API. It is anticipated that CommerceOne and Ariba will be common sources for integration. It is expected that this services offering will leverage webMethods B2B Server and On-Ramps. y TradeServer Bank API integration: This GCS service will provide custom integration into the banks back-end payment and finance systems. This integration includes integration into payment networks (for example, ACH and FedWire) as well as integrating other trade finance products such as escrow, warranty, and loans. y TradeServer Warehousing: This GCS Service will be concerned with integrating the TradeServer database into a corporate wide data warehouse. y TradeServer Installation and Configuration Third Party Software y Potential Third Party Software Accelerators y y y y y y y y y y y y See above Suggested Partnering Levels TBD Suggested Pricing Model TBD B2Bi webMethods Reporting - Actuate Business Intelligence Microstrategy, Cognos, Brio, Mircosoft ETL Informatica Directory iPlanet, Oracle Warehousing templates - Sybase Receivables information management E-time Capital Cross border payments Bolero Authentication Identrus, Verisign Invoicing Bottomline Transaction management TSI Mercatur, Trustbase, NEON, webMethods EFT initiation JCP, S1, Politzer & Haney, BankServ
Potential Partners
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GCS Proprietary
Marketing Deliverables
Branding
Program Title: TradeServer 1. Brand Management a. Program Name i. Distinctive name 1. Unknown ii. Descriptive tagline: 1. Unknown iii. Company identifier 1. from GlobalCommerce b. Wordmark i. Unknown c. Logos and Icons i. To be determined d. Trademarks and Intellectual Property e. Usage and Production Standards 2. Marketing Communications a. Shows and Events i. American Banker nline 1. Date: 2. Location: 3. Demographics: ii. Association of Financial Professionals 1. Date: 2. Location 3. Demographics iii. E-finance 1. Date: 2. Location: 3. Demographics
10/11/00-10/13/00 Chicago, IL
11/12/00-11/14/00 San Francisco, CA
11/7/00-11/8/00 Philadelphia, PA
iv. International Reviewing options for 2001 b. Advertising i. Print 1. Regional (Chicago) a. Wall Street Journal 10/11/00 or 10/12/00 2. National a. American Banker (daily) during AB , AFP and E-finance b. Bank Technology News (monthly) c. Future Banker (monthly) d. US Banker (monthly) 3. International a. Reviewing options:
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i. Banking Technology ii. Financial Time iii. more ii. Digital 1. Domestic a. American Banker nline b. Bank Tech News.com c. Banking Channel.com 2. International a. To be determined Direct Marketing i. Direct mail campaign to support American Banker trade show 1. List demographics: Trade Show list of pre-registered attendees 2. List quantity: approx. 750 mailers sent 3 times ii. Direct mail campaign to support e-Finance trade show iii. Direct mail campaign to support AFP trade show Digital Marketing i. E-mail newsletters 1. Thompson Financials newsletter sponsorships ii. Micro-sites and web landing pages 1. Supporting ad banners 2. Supporting Email newsletters iii. Web seminars 1. To be determined Print Collateral i. Brochures 1. Program overview brochure ii. Sales/data sheets 1. Application Enablement 2. Managed Services 3. Learning Services Digital Collateral i. Multimedia 1. Trade show attract loop (60-90 seconds) 2. Multimedia overview (3-5 minutes) a. Trade Show infomercial b. CD-R M (handout as giveaway and sales tool) c. Website ii. Demos 1. Design, and branding 2. Functionality provided by Product Development Website i. Home page 1. Program highlights ii. Section page 1. Program summary iii. Content page(s) 1. detailed program information 2. PDF download: Promotional items i. To be determined Globalization i. Media 1. Advertising 2. Digital marketing ii. Target languages
c.
d.
e.
f.
g.
h. i.
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GCS Proprietary
j.
1. French 2. German 3. Japanese Leads Development i. Gathering, warehousing ii. Pre qualification iii. Distribution
Product and Service Naming

TBD
Product and Service logos/icons

TBD
Trademarks
TBD
Co-Branding Considerations (third party software)

TradeServer will contain either the GlobalCommerce brand and the financial institutions brand on the user interface or just the GlobalCommerce brand. The product will not be licensable without some mention of the GlobalCommerce brand.
Pricing
List Pricing
GCSs pricing model will evolve substantially over time.
First 6 months
Pure direct sales & business development engagement model to Tier 1 banks. Banks acquired are joint development partners to derive functionality for TradeServer and to test TradeServer against bank systems and bank customer base. Targets will be a global sample and include a license fee for core GCS IP (a nascent TradeServer leveraging preexisting GCS code and partner technology) and a heavily discounted fee for service engagement model in exchange for reuse rights of the end solution. GCS will also be prepared to offer warrants in GCS stock for these initial partners. Estimated average deal size: $500k in license, $10MM in services based on performance milestones
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GCS Proprietary
Following 6 months
Pure direct sales engagement model to Tier 1 banks. Banks acquired are customers paying transaction based license fees with an initiation fee. Estimated average deal size: $500K initiation fee plus $1.00 per transaction.
Following 6 months
Direct sales engagement model to remaining Tier 1 banks. Reseller and Tier 1 customers sell TradeServer to Tier 2 banks. Estimated average deal size: $100K initiation fee plus $0.25 per transaction.
Ongoing
Direct sales engagement model to any Tier 1 banks. Reseller and Tier 1 customers sell TradeServer to Tier 2 banks. GCS launches value added services on top of TradeServer direct to customers under the commerce.com brand. Estimated average deal size: To be determined
Discount Pricing
TBD
ASP Pricing (subscription)

See Pricing Following 6 months.
Promotional Pricing
TBD
Collateral
TBD
Brochure
TBD
White papers
TBD
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GCS Proprietary
Beta Program
Beta Objectives
The goal is to have one beta customer actively participating in product issue identification in the form of code bugs, documentation discrepancies, feature enhancements, and overall product feedback. This allows GCS to obtain extensive product feedback in terms of installation, functionality, stability, and usability. Any non-incorporated customer requested features would be rolled into the next PRD. The following are the goals of the Beta: y y y y y y y y y Build a customer reference for the Trade Server Obtain feedback on product installation, features, stability, and usability Verify the Trade Server solution and technology Test installation and configuration procedures and documentation usability. Uncover and correct code defects found during this phase. Evaluate the performance. Determine new feature usability. Report product suggestions for enhancements. Test end-to-end functionality of the Trade Server.
To meet the goals of the beta, the following program components will be defined in detail within the beta plan: y Beta Critical Success Factors indicate the elements necessary for a successful beta program execution. This is checked against the plan to ensure all activities necessary for these elements have been accounted for. Product features list the functionality available in the product for the beta. This indicates what needs to be tested in the beta, the scope of the testing, and additional elements such as documentation, installation procedures, etc. Beta program design summarizes the approach being taken for the beta program, such as for site selection, preparation activities, and support structure. Beta entrance criteria provide a checklist of items and activities which need to be completed or in place before the beta program can begin. Conducting the beta details the activities expected to take place during actual test, roles and responsibilities, escalation procedures, and support mechanisms. Beta exit criteria provide a checklist of the items and activities which need to be completed successfully before the beta program is concluded.
y y y y
Beta Candidates
TBD
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GCS Proprietary
Beta Site Qualification

The site selection process seeks to identify qualified and motivated candidates as possible Beta sites. Beta sites will benefit from an early preview of this technology from GCS: A level of personal attention to installation and integration into production which post-Beta customers will not receive Customers will have opportunity to influence current and future replication products from GCS. The following high-level criteria must be met in order to be in the Trade Server Beta program: y y y Customer is within the financial services industry Willingness to be a reference Dedication of Resources - Customers willingness to commit resource to the beta program, and to provide timely and thorough feedback during the program and a written report at the end of beta describing product deficiencies, suggestions for enhancement, defects, and positive elements. Minimum necessary customer resources are: Appropriate hardware and communications availability. DBA, and Java skills required. Must have the appropriate install platforms available when the beta product is shipped. Recommendations from the sales representative and systems engineer based on customer importance, sales potential, strategic considerations, etc.
y y y y
Beta Criteria
The Beta plan will detail entrance, exit and success criteria of the beta program.
Product Launch
TBD
Event
TBD
PR Brief
TBD
Press Release
TBD
Analyst briefing
TBD
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GCS Proprietary
Press kit
TBD
Web Site (internal & external)

TBD
Trade Shows
TBD
User Groups
TBD
Training (internal)
TBD
Sales
TBD
Customer Support
TBD
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GCS Proprietary
Business Case
See the attached spreadsheet for product revenue projections for TradeServer and related GCS services.
Assumptions
TBD
Dependencies
TBD
Risks
TBD
Investments
TBD
Sales Channels
See pricing model (above).
Revenue Projections Table (36 month)

y y ROI Breakeven
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GCS Proprietary
Future Directions
TBD
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Sources
The following sources contributed to this MRD: y y y y y y y y y y y y y y Chase Manhattan Bank KeyCorp Bank of America CIBC Scotia Bank Bank of Montreal Barclays HSBC Royal Bank of Scotland Deutsche Bank AG McKinsey Payments Practice Research Gartner Group AMR Research Aberdeen Research
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Reviewers
Mandatory Reviewers
Function
Director of Product Management Director of Product Marketing Director of Marketing Services Director of Product Development Vice President of Marketing Vice President of Development Vice President of Managed Services Vice President of Client Services Chief Operating Officer
Signature
Date
Optional Reviewers
Directors in Client Services organization Directors in Managed Services organization
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GCS Proprietary
Appendix A: Internationalization
Recent studies indicate that nearly one in three visitors to American Web sites come from other parts of the globe. In the last two years Europes rate of Internet adoption has grown 222%, while Asia has seen 550% growth. Roughly 45 million Internet users are based in Asia or Europe, where the majority are native speakers of a language other than English, use a currency other than dollars, and are immersed in other cultures. Forrester reports that 63 of the Fortune 100s Web sites are available only in English. Yet analysts agree that English will cease being the Webs dominant language in a few years. By 2004, 50% of all online sales will occur outside the U.S., meaning that globalization is moving from luxury to necessity, according to Forrester analyst Eric Schmitt.
Globalization
Globalization is the sum of all the processes used to prepare products and services for sale in global markets, and also includes the management of multilingual information within companies operating internationally. Software packages, high-end client/server software solutions, ERP applications, and consumer products and services with international distribution or international e-commerce all have strategic multilingual components that require advanced technology and service solutions. The Internet is the ultimate global information source, and ignoring its ability to reach international users in their own language is not a good business decision. The low cost of entry to international trade is another powerful argument for localization. The estimated investment cost to reach a market area of ten million potential customers is $900,000 through conventional methods versus $1,000 through the Internet.
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GCS Proprietary
Consequently, localizing is constantly on the rise. The following chart illustrates the top ten foreign domains:
Source: StatMarket; http://www.statmarket.com
A recent study funded by the European Union shows that e-commerce sites need to provide better information for foreign customers, and improve the customers experience with international transactions. The study focused on Internet transactions in the United States and eleven other markets.
Services offered Give chance to review order details Provide clear pricing information Offer e-mail order confirmation Indicate security measurements Show return policies Show jurisdiction information Give option to not pass data on to 3rd parties
Percentage of sites in survey 89% 76% 64% 61% 53% 18% 14%
Percentage of US sites 93% 71% 82% 80% 70% N/A 23%
Source: Robert Mayer, University of Utah, as published by StatMarket; http://www.statmarket.com
There is no official information on the total volume of transborder electronic transactions, but there are clear indicators that Internet access through foreign domains is approaching nearly half of all Web traffic. US marketers are increasingly going international. A survey conducted last year of the members of the Direct Marketing Association showed that 46% of respondents did on-line transactions with a combination of domestic and international customers. Canada, Great Britain, and Japan are cited as the top foreign markets.
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GCS Proprietary
Internetional
The tables below outline current international Internet subscribers by country, and give some history and forecast.
Country Japan Germany U.K. France Australia Sweden Brazil Italy Spain Hong Kong Mexico Denmark Russia China Singapore Chile Taiwan Israel India South Africa Argentina Malaysia Other Markets Total
Population 125,900,000 82,000,000 58,800,000 58,000,000 18,200,000 8,800,000 160,000,000 57,300,000 39,200,000 6,500,000 93,000,000 5,300,000 150,000,000 1,200,000,000 3,000,000 14,000,000 21,500,000 5,100,000 913,000,000 45,100,000 34,200,000 19,700,000 2,560,000 3,343,070,000
Subscribers 4,150,000 3,289,950 3,170,475 1,009,340 855,000 835,000 750,000 640,000 610,000 600,000 598,750 371,000 350,000 300,000 299,000 282,240 169,600 100,000 80,000 80,000 50,000 30,000 21,166,455
As % of population 3.30% 4.01% 5.39% 1.74% 4.70% 9.49% 0.47% 1.12% 1.56% 9.23% 0.64% 6,89% 0.23% 0.03% 9.97% 2.02% 0.78% 1.96% 0.01% 0.18% 0.15% 0.15% 0.63%
Forecast for Online/Internet Subscriber Growth, 1997-2001

Area Asia-Pacific Rim Annual Growth Europe Annual Growth Latin America Annual Growth 1997 6,073,600 7,469,765 1,630,990 1998 8,244,256 35.7% 10,565,556 41.4% 2,540,462 55.8% 1999 11,346,593 37.6% 14,174,457 34.2% 4,080,403 60.6% 2000 14,573,230 28.4% 18,448,861 30.2% 6,704,264 64.3% 2001 17,504,727 20.1% 22,869,671 24% 10,163,044 51.6%
Source: Cowles/Simba Information
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GCS Proprietary
Dont they speak English? ( r: Why dont they eat cake?)

To some extent, they do. Kids in schools all over the world learn English somewhat well. As the worldwide language of business and the unofficial language on the Internet, English is more than tolerated by nonnative speakers. However, the understanding is often superficial, and polls have shown that a foreign language is a serious barrier to moving beyond a mere recreational use of the Internet. Users stay twice as long and are three times as likely to make a purchase from a web site that has content in their native language. According to a survey by the Japan Electronic Industry Development Association, more than 85% users indicated difficulties in understanding English on the Web. Additionally, according to a survey by Georgia Tech University, 71% Europeans said that more people would be willing to use the Web if a greater number of sites were tailored to their language and culture.
The big ones

The three most important languages on the Net (except for English) are French, German, and Japanese. The second tier languages are Spanish, Italian, Dutch, Swedish, and Portuguese, with Chinese, Korean, Norwegian, and Finnish following closely. The central and eastern European languagesRussian, Polish, Czechare steadily growing, too. The importance is measured not only in population but also in computer literacy (thus the prominence of some geographically small languages). The European Union protects its members by translating all its laws and documentation into all membership languages. It is not too much of a stretch to suspect that a similar language law be extended to electronic trade sites of the membership countries in the future.
French, German, and Japanese

In 1994, Frances Minister of Justice, Jacques Toubon, initiated a law requiring all products marketed and sold in France to be given French names. Similarly, English language business jargon such as management is not allowed to be used. Toubon wants the same principle to be applied to French web sites. Three sites have already been sued. In Quebec, operators of web sites that are not translated into French are also facing suits under similar legislation. Germany has embraced the Internet rather slowly. Language nationalism is likely one of the main reasons. Where English content was the norm in 1996, German language web sites are now mushrooming. According to Lycos, German language search engine traffic is growing 30-40% per month. 75% of German companies use the Internet for business, compared to 73% in the UK and 56% in France. As in France and Germany, there is cultural pride in Japan, making English language web site less appealing. Compared to European countries, the Japanese appear to be more willing to make purchases over the Internet. Many companies have experience a serious loss of business to their competitors by not localizing into Japanese, or by being late with their Japanese language versions.
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GCS Proprietary
Functionality
Any application with international aspirations must include basic international-related functionality: y y y Support for foreign currencies; Support for locale-specific taxation; Flexible coding of information input fields (name, address, telephone numbers, social security numbers, etc.) to allow for locale-specific tailoring regarding order, length, and other requirements; Flexible, modular approach where features can be taken out or added, depending on localespecific requirements for financial reporting, security and encryption regulations, data sharing restrictions, trade limitations, consumer law, etc.
In software dealing with international trade, it is mandatory to accommodate multiple currencies, international sales taxes, local holidays, and foreign addresses. Shipping products overseas without considering customs regulations and tariffs can spell trouble. If you don't play by the rules, goods can sitand sit and sitat the border warehouse for a while, said Mary Lou Fox, COO at NextLinx Corp., a company which helps e-commerce firms comply with trade regulations. A proposition presented to the European Union in July, 1999, arguments for changed legislation in connection with international economic commerce. Currently, the business in question has to comply with the consumer laws of the country of the seller. If the new law is approved, all businesses in international trade in European Union member countries will have to comply with the laws in the country of the buyer. Understandably, there is much opposition against this proposition. If it passes, however, it will probably also affect which countrys taxes should be applied.
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GCS Proprietary
Preparing code for translation

Anticipating and determining international requirements involves creating a locale-neutral code, where the source code is separated from any localizable elements. This is the foundation for internationalization (i18n). Internationalized code also has to comply to various standards. For example, in order to handle Asian languages with alphabets of up to 6,000 characters, the code has to support a universal character standard called Unicode. Localizable elements are the following items: y y y y y y y y y y y y y y y y y y y y y y y y y y y y y y All translatable text Date formats Time formats Measurements Currencies Defaults Separators Spacing Order (sequences) Punctuation Direction Fonts Graphics Sorting Indexing Grouping Sizes Capitalization Symbols Address fields Postal (zip) codes Phone numbers Positions on screen Mnemonics (access keys) Layout elements Video components Audio components Executables Features Components
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GCS Proprietary
Localization
"More than technical or infrastructure problems, cultural problems will be the biggest issue that merchants will face in the global marketplace." Bruce Guptill, analyst at Gartner Group
Localization (l10n) is the part of globalization that involves translating language and tailoring an application to cultural nuances. Localization is not possible without prior internationalization. Successfully going global requires the shaping of the application for the target market. This is a business decision that involves identifying and prioritizing specific locale requirements relevant to business targets and sales opportunities. Localization of the TradeServer solution should thus be determined per client requirements in the project space. As a highly general guideline, the following locale breakdown is recommended (in order of priority): y y y y y y y I II III IV V VI VII French, Italian, German, Spanish (Spain and Latin American) Japanese Portuguese, Dutch, Swedish Danish, Norwegian, Finnish Chinese (Traditional and Simplified), Korean Russian, Polish, Czech Other languages
Translation is just one step of the localization process. This discipline also deals with, what can be referred to as ...
Cultural gotchas
"These are hard-learned lessons. There were a lot of ulcers and an awful lot of Pepto Bismol being drunk through this process." Colum Joyce, e-commerce strategy manager at DHL
Cultural issues include complying to advertising restrictions and consumer protection laws. For example, in Germany it is illegal to directly compare your product with a competitors. Items sold online to Swedish consumers need to meet Swedish safety rules, and online pharmacies could be regulated by the international equivalents of the U.S. Food and Drug Administration. Furthermore, some countries do not allow superlatives, or portrayal of violence. Autobytel.com, which is expanding in Europe, Japan and Australia, has discovered that different cultures may require radically different business models for e-commerce. Online auctions for selling cars have not been successful in the U.S. But in Holland, people have been buying at auctions for the last 500 years, and car auctions are successful, said Joshua McCarter, Vice President of International Development. In some cultures, certain colors are more appealing than others, and some are taboo. When DHL were designing their first site, it was all white. Then they realized that white was the color of mourning in China, so it was something they could not possibly use. Imagery that one culture or market deems acceptable will be offensive and unacceptable to another. In the U.S., a Web site can use the OK hand gesture as an icon. In Brazil and in Germany, however, it means the same as the middle-finger gesture in the U.S.
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Other common marketing pitfalls include inappropriate product names and incorrectly translated slogans. Poor understanding of a countrys history and culture typically result in detrimental advertising styles and unsuitable graphics, with low or poor acceptance of the application in question.
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TradeServer MRD

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Trade Server

Marketing Requirements Document

GCS Trade Server Marketing Requirements Document GCS-TSMRD-001

Issue 1, September 21, 2000

Katja Flajszman Greg Davoll

Document Change Management and Distribution Procedure

GCS Trade Server Marketing Requirements Document GCS-TSMRD-001

Issue 1, September 21, 2000

GCS Trade Server Marketing Requirements Document GCS-TSMRD-001

Issue 1, September 21, 2000

GCS Trade Server Marketing Requirements Document GCS-TSMRD-001

Issue 1, September 21, 2000

GCS Trade Server Marketing Requirements Document GCS-TSMRD-001

Issue 1, September 21, 2000

GCS Trade Server Marketing Requirements Document GCS-TSMRD-001

Issue 1, September 21, 2000

GCS Trade Server Marketing Requirements Document GCS-TSMRD-001

Issue 1, September 21, 2000

Prime FI opportunities Financing and payments Information management

Approve vendors/ customers

Order Guarantee goods and payment services

Manage Resolve A/R and disputes collections

Figure 1: Purchasing process

Integration service providers Customer experience monitors Credit services

CAGR = 148% 132

Trust and risk services 1,177

Figure 2: Estimated growth of payment, credit, and risk management

GCS Trade Server Marketing Requirements Document GCS-TSMRD-001

Issue 1, September 21, 2000

GCS Impact $ Billions

A/R financing Underwriting Arranging Legal advisory Credit rating agencies

Figure 3: US trade processing costs

GCS Trade Server Marketing Requirements Document GCS-TSMRD-001

Issue 1, September 21, 2000

Description of Customer or Business Pain

There four opportunities / pressures in online financial trade cycle

Expanded Trade Cycle Payments

White Space Risk Mitigation

GCS Trade Server Marketing Requirements Document GCS-TSMRD-001

Issue 1, September 21, 2000

Market Opportunity and Market Size

GCS Trade Server Marketing Requirements Document GCS-TSMRD-001

Issue 1, September 21, 2000

U.S. Bank Financial Institutions

Assets $792BB 679BB 396BB 272BB 265BB 257BB 234BB 185BB

IT Budget @1.00% $ 7.92BB $ $ $ $ $ $ 6.79BB 3.96BB 2.72BB 2.65BB 2.57BB 2.34BB

GCS Trade Server Marketing Requirements Document GCS-TSMRD-001

Issue 1, September 21, 2000

Tier 2 13 Super Regional Ranked 11-25 Assets 100B to 46B

$ 646 MM $ 488 $ 470

GCS Trade Server Marketing Requirements Document GCS-TSMRD-001

Issue 1, September 21, 2000

GCS Trade Server Marketing Requirements Document GCS-TSMRD-001

Issue 1, September 21, 2000

Tier 3 Regional 22 Ranked 25 to 47 Assets 20B to $45B

GCS Trade Server Marketing Requirements Document GCS-TSMRD-001

Issue 1, September 21, 2000

Super Community Ranked 51-75 Assets 18B to 10B

GCS Trade Server Marketing Requirements Document GCS-TSMRD-001

Issue 1, September 21, 2000

Community 10Bto 7B Assets Ranked 76-100

Western European Banks