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New Tools for New Challenges: How Lessors Are Enabling

Processes

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Session Presenters

Andrew LeaMCCUE SYSTEMS, INC. ~ A NetSol Technologies Company

Michael P. ZoretichBEARINGPOINT, INC.

Michael CumbyFINANCE EDGE SOFTWARE, LLC

Michael GrossNATIONAL CITY COMMERCIAL CAPITAL, CORP.

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Discussion Topics

The World Has Changed: Meeting New Challenges

Identifying New Tools: What’s On the Menu?

An Approach to Enabling Processes

The Strategic Dialogue: Business Needs & Technical Capabilities

Technology at Work

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Business Environment

The World Has Changed: Meeting New ChallengesIncreased Regulation/Audit Concerns

Must have “steak”, not just “sizzle”— Quantifiable Business Objectives: Achieving Key Business Drivers

— Identifying the Right Metrics: KPAs and KPIs

Meeting Customer Expectations— Self-service

— Portfolio Management: Visibility / Data Aggregation

— Supporting CRM

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Common Themes

Auditability throughout the lifecycle

Performance Tracking: KPIs: ROA / CRM / Throughput

Simplified and Configurable Workflows

Reduced Development Support & Requirements, Enhanced Integratability

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Common Themes

ProductivityMore work/ FTE

The DER (Domain Expertise Requirements) Factor

— Core vs. Non-Core Processes

— Core vs. Non-Core Functionality

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Tools

Enterprise Application Support (EIS)

Business Process Management (BPM)

Distributed Computing: The Web Services Model (SOA)

Web-Delivered Software as a Service (SaaS)

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Tools


Website

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Tools


Web Service

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Tools


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Tools


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Tools


Business AgilitySavingsOptimizing IT ResourcesAligning IT to Business Processes

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Tools

Web-Delivered Software as a Service (SaaS)

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Web-Delivered Insurance Tracking

American Lease Insurance

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In the Past: Client Server App

All data stored on client side.

Data sent by modem to UCC Direct for Processing.

Hard copy documents returned to client.

Updated by disk which required user to install to update program

UCCDirect.com

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Today: Web Based

Place orders from any computer, at any time.

View Order Status real time.

System always current; no need for user to update software.

UCCDirect.com

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All Results Available on Web

Each order archived in user’s/company portfolio.

All documents imaged.

Data & Images of all documents accessible at any time.

Results can be easily e-mailed.

UCCDirect.com

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We are seeing the emergence of “competing for project dollars” based on strategic relevance

Strategic Projects support: Driving Revenue

Customer Facing Initiatives

Improving Profitability

Service Differentiation

Non-Strategic Projects aligned typically with:Regulatory Initiatives

Efficiency Improvements

Audit Issues

Non-differentiating Processes (“everyone has to do it” type processes)

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Common criteria used to differentiate project type

Unique and self-serving business processes that assist:

in differentiating you with your customer

in differentiating you against your competition

In delivering strategic value that isn’t “easily duplicative” by others

Certain amount of customization inherent

Tangible ROI drives the investment strategy

ROI tends to typically exceed 18 to 24 months

Takes audit concerns into account

Involve regulation

Desire to achieve a high level of standardized

Outcomes from these types of processes usually translate into small wins all the time in a repeatable manner

Non-tangible ROI usually drives the investment strategy

ROI can be achieved in under one (1) year

Strategic Projects Non-Strategic Projects

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Types of solutions involved …

Types of Solutions – Strategic Projects:

1. Traditional “license and install” systems (Non-hosted solutions)

2. Custom build applications

Types of Solutions – Non Strategic Projects:

1. Application Service Provider (ASP - hosted solutions)

2. Software as a Service (SaaS hosted solutions)

3. “Utility” computing (hosted solutions that are leveraged by an entire industry)

What’s involved?

Significant amount of customization

Perpetual license & maintenance contracts

What’s involved?

Highly configured solutions with minimal customization to Core Application

Pay as you go – subscription & transaction based Service Level Agreements (SLAs)

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Example of Utility Computing – Automotive Finance

Auto Finance eContracting Leadership

We believe 2006 will be the year of eContracting … With the number of connected lenders now approaching critical mass, and law firms providing opinions on securitizations including eContracts that are approved in form by Standard & Poor’s, we believe the industry is ripe for eContracting to take hold. Our recent acquisition of Global Fax LLC enables us to provide lenders with 100% of their automotive retailing contracts in digital format, and may help facilitate the adoption of eContracting. - Mark O’Neil, CEO of DealerTrack May 2006

• 3-4 million credit apps per month (200 finance sources)

• eContracting Leader – 20+ Indirect Lenders in production in 2006• 700,000+ eContracts originated (1 million by EOY)

• NMAC Securitizations - Q4 2005, Q1 2006, Q2 2006

• GMAC, Ford Motor CC, DaimlerChrysler FS and Toyota FS• Going live with eContracting in July 2006

• Mandated usage for captives

• In development - going live Q4 2006 / early 2007

• In early production – national roll-out underway for 1,000 dealers

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Examples of non-strategic leasing processes that are emerging as non-strategic projects

• Legal Requests• Reposession• Outsourced Collections• Skip Trace• Recruiting• OFAC

GENERAL BUSINESS SERVICES DOCUMENT SERVICES

• Inspection / Valuation• Condition Reports• Survey / Appraisal• Consignment• Auctioneer/Liquidation• Refurbishment• Storage & Warehouse

SERVICE PROCUREMENT MANAGEMENT

• Like Kind Exchange (One-time)• Rate Card Pricing• Rate Card Risk-based Pricing• Wireless • Residual Value Insurance

SPECIALTY SERVICE PROCUREMENT

• E-Documents• E-Signature• E-Vaulting• Securitization• Syndication

The premise is that these processes do not Win nor Lose a Deal “everyone just needs to do them in order to remain profitable”

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These solutions have evolved as …

1. Solutions that can be deployed with fewer IT resources and achieve faster ROI for their IT investments.

2. No longer being seen as novelty software approach but instead as a viable alternative to traditional license and install” systems.

3. Stand-alone platforms where there is no need for investments in hardware, networks, software, security, backup & recovery, software upgrade effort, and all other requirements of IT delivery.

4. Offer a common backbone based on standard controls and architectures that allow business users to configure and manage custom workflows based on their requirements, rules, and policies that can be centralized to one integration point.

5. Having the ability to propagate as a enterprise-wide solution quickly.

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The solutions offer both …

Challenges:

Companies considering these solutions need to educate themselves on a number of factors

Challenges with these models are typically:

Data security

System uptime, and

Integration with internal systems

Current research shows that companies and their Solution providers have been able to effectively mitigate these issues in most cases.

Benefits:

Solutions can be operational in under three (3) months

Achieve ROI in less than a year (this is two to four times faster than typically experienced with on-premise software)

Allow for quicker and easier adoption by various trading partners as well as other stakeholders.

With the reduced need for training and the simplicity and user friendliness of many solutions, companies are likely to achieve higher adoption rates among various stakeholders.

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Service Provider List is Growing

StrikeIron – Web Services Marketplace

Yahoo Web Services - Marketplace

Google API - Marketplace

Diligenz – Lien Filing and Searching through Web Services

InfoBridge – Business Credit Reports in Desktop Applications

Tabitha Software – Asset Management

Paynet – Payment history on borrowers

D&B – Global Access/Worldwide Business Reports

eBay – Asset disposal via auction API

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StrikeIron.com

Over 50 services

Text Messaging, Currency Conversion, Address Validation, Reverse Phone Lookup

Simple Interface

MS Excel Client

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Diligenz

All Functions Exposed Through Web Service

File, Continue, Terminate, Amend, Assign

Ability to Query for Status

Ability to See Documents Produced

Ability to Send Attachments

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InfoBridge

D&B and Experian Business Reports

Access Through Commonly Used Desktop Applications – MS Office, MS Dynamics, QuickBooks, MS SBA, Windows XP & 2000

Inexpensive and Paid for by Credit Card

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Business Approach

Companies must take all issues into account

Likely to use more than one “technology” or approach.Answer may not be the same every time.

Requirements-driven solutionsSet aside technology/vendor bias (no “right” or “wrong” answer)

Evaluate needs/requirements

Evaluate Processes

Evaluate potential solutions – can be more than one.

Evaluate cost v benefits

Decision based on best fit for the situation.

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Online Warehouse Lending

DriversWeb Based

Real-Time Interaction (View and Update)

Process was primary driver, not necessarily budget

Sufficient IT resources

New Processes, New Business Model

SolutionInternet/Intranet using API to link to Leasepak Accounting system.

Custom Development around API

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Procurement Alternatives Corp System Upgrade

DriversSmaller, self-contained business unit

Web-Based

Lower Cost

Full Featured and Flexible

Low Maintenance

Shorter Timeline

Less resources

More Efficient Process

SolutionASP Web Solution (Tabitha Software)

Some customization

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UCC Filing

Drivers

Automated Process

High-Volume

High-Efficiency

Limited resources

Real-Time processing

SolutionWeb Service (Diligenz)

Designed/Built under SOA (Service Oriented Architecture) model to be leveraged by other business units

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New Math

New ToolsWeb-Based Applications (ASP)Software As A Service (SAAS)Application Programming Interfaces (API)Service Oriented Architecture (SOA)Business Process Management (BPM)

New RequirementsAudit, SOX, OCCAutomationBetter ProcessesExpense ReductionUpdated capabilities

+

= Success!

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Presenter Contact Information

Michael CumbyFINANCE EDGE SOFTWARE, LLC

CTO

5959 Central Ave. Suite 103

St. Petersburg, FL 33710

Tel - (727) 381-7855

Mob - (727) 423-2186

Email [email protected]

Michael GrossNATIONAL CITY COMMERCIAL CAPITAL, CORP.

CIO – Vice President

995 Dalton Ave.

Cincinnati, OH 45203

Tel - 513-455-7407


Andrew LeaMCCUE SYSTEMS, INC. ~ A NetSol Technologies Company

VP Marketing & Corporate Communications

111 Anza Blvd - Suite 310

Burlingame, CA 94010

Tel - 650-348-0650 ext 1171


Michael P. ZoretichBEARINGPOINT, INC.

Senior Manager – FS Lending, Leasing & Payments

2375 E. Camelback Road, 5th Floor Phoenix, Arizona 85016

Tel - (847) 508-2908


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Appendix – Definition of ASP & SaaS

APPLICATION SERVICE PROVIDER (ASP)

1. Hosted third-party client-server application

2. ASPs transferred a customer's application sets into mini-data centers housed in data centers

3. Since so many customer-specific applications were being run by one ASP, customers still had to have in-house expertise to make sure the applications were behaving correctly

4. Customer license based on number of users. Priced on a license and maintenance basis

5. If your company needs a provider that will host its specific, customized applications or off-the-shelf applications in a secure data center, then the ASP may be a good choice. It also suits companies that want to outsource all or most IT processes, including development and Web sites.

SOFTWARE as a SERVICE (SaaS)

1. Software distribution model in which applications are delivered and maintained (i.e. hosted) by a vendor/service provider

2. Delivered to customers over the Internet

3. The typical SaaS provider offers applications specifically designed to be hosted and delivered over the Internet to many customers. Each customer gets its own instance of the application, but the provider still achieves economies of scale because of the simpler application scenario.

4. Customers acquire right to use software on a pay-as-you- go subscription basis. Priced based on # users, transactions, etc.

5. The SaaS model is a good fit for companies that have no need for in-house application developers or experts. It also provides benefits to companies burdened with heavy regulatory compliance requirements, because SaaS centralizes IT management and automatically generates reports.