Transcript
Strategy in Action: Smart Information Tools Strategy in Action: Smart Information Tools
Legal, Tax and Business, North AmericaLegal, Tax and Business, North America
Analysts & Investors, March 2002
Nancy McKinstry, CEO, LTB-NA and Executive Board Member
Kevin Robert, CEO CCH Tax Compliance
2
Table of ContentsTable of Contents
• Overview Legal, Tax & Business North America (LTB-NA)
• Strategy and Growth Opportunities
• Strategy in Action
– Investments in Smart Tools and Integrated Solutions
– Tax and Accounting Destination Site
– Product Demonstration: Client Relate
• Conclusions
Overview of Legal, Tax and Business North Overview of Legal, Tax and Business North AmericaAmerica
4
LTB-NA Represents 32% of Sales and 41% of LTB-NA Represents 32% of Sales and 41% of Operating Income for Wolters KluwerOperating Income for Wolters Kluwer
2001 Sales 2001 EBITA
5
LTB-NA 2001 Revenue
LTB-NA Sales by Customer Type
All Six Operating Companies Serve a Variety All Six Operating Companies Serve a Variety of Professional Marketsof Professional Markets
6
LTB-NA Offers a Broad Set of Product Suites LTB-NA Offers a Broad Set of Product Suites to Meet Customer Needsto Meet Customer Needs
• Leading provider of software tools for tax and accounting practices targeted at medium to large size firms.
• Key Products: Tax preparation software, audit and practice management software.
• Number of products: 310
• Premier provider of corporate and UCC software and services.
• Key Products: Registered agent services, corporate entity and UCC filings, document retrieval and due diligence services.
• Number of Products/Services: 35• Leading provider of expert-authored secondary source
material in a wide variety of legal and business specialties and of primary legal research material over the internet through Loislaw, an online database of more than 11 million legal documents.
• Products: Treatises and periodicals for legal practitioners and professionals and educational materials for law students.
• Number of Products: 1,500
CCH CCH Tax ComplianceTax Compliance
Aspen PublishersAspen Publishers
CCH Legal CCH Legal Information ServicesInformation Services
Lines of BusinessLines of Business
7
• Leading provider of information and productivity tools to tax, legal, and regulatory markets.
• Key Products: Tax, securities, human resources, financial information, healthcare, insurance and compliance software tools.
• Products delivered in print, CD-ROM, and online (Internet).
• Number of products: 1,500
CCH Inc. CCH Inc. & CCH Canadian & CCH Canadian
Lines of BusinessLines of Business
LTB-NA Offers a Broad Set of Product Suites LTB-NA Offers a Broad Set of Product Suites to Meet Customer Needsto Meet Customer Needs
• Leading provider of transactional (e.g., lending, deposit transaction) compliance solutions to financial institutions.
• Key Products: Loan documentation software, deposit transaction software, compliance resources and support, and privacy and other regulatory disclosures.
• Number of products: 6,000
BSI Inc.BSI Inc.
8
LTB-NA Holds Leading Positions in Both LTB-NA Holds Leading Positions in Both Research and Compliance AreasResearch and Compliance Areas
Market Market PositionPosition
#1#1 #2#2 #3#3
Tax ResearchTax ResearchCCH US
PublishingRIA (Thomson)
BNA
Tax Tax ComplianceCompliance
CCH Tax Compliance
Lacerte CSI (Thomson)
Securities Securities LawLaw
CCH US
Publishing
Aspen
PublishersWest
Corporate Corporate and Legal and Legal
ComplianceCompliance
CCH Legal Information
ServicesCSC
Lexis Document Services
Banking Banking ComplianceCompliance
CCH (BSI)Harland Financial Solutions
Fragmented among local
law firms
Human Human ResourcesResources
BNACCH US
Publishing
Aspen
Publishers
Strategy and Growth OpportunitiesStrategy and Growth Opportunities
10
Tax Software(e.g. CCH ProSystem fx DPC Sales & Use
Tax Products )
Transaction Software and Service(e.g. CT iLien Online)
Online Training(e.g. Shared Learning)
Software Tools & Compliance Services(e.g. CTAdvantage.com, Tax Notebook, Client Relate, ePace!)
ServicesServicesSoftware
ToolsSoftware
Tools
ContentContent
Extend Our Leadership in Content to Software Extend Our Leadership in Content to Software and Services to Provide Smart Tools and and Services to Provide Smart Tools and Integrated SolutionsIntegrated Solutions
11
Providing Smart Tools and Integrated Providing Smart Tools and Integrated Solutions offers Higher Retention and Margin Solutions offers Higher Retention and Margin PotentialPotential
StaticContent
StaticContent
Dynamic ContentDynamic Content
Rete
nti
on
Rate
SmartToolsSmartTools
Integrated Solutions
Integrated Solutions
Margin OpportunitiesMargin Opportunities
• Books• Reference
Guides• Primary Source
Material
• Integrated Software
• End to end workflow system
• Online• CD-ROM• Hyperlinked
Content• Content that
requires updating
• Compliance • Worklfow Tools• Integrated
Libraries (e.g. content, forms and practice systems)
00
90
80
70
20 4030 50+
12
Integrated Products Work Together to Integrated Products Work Together to Provide an Overall Solution to a TaskProvide an Overall Solution to a Task
• Product offerings must meet the needs and work habits of specific customer segments (e.g. tax accountants)
• Providing these tools and solutions requires:
Both content and subject matter expertise
Deep understanding of customer workflows
Expertise in integrating content, forms and software applications to build integrated solutions
• Customers reap significant benefits from an integrated suite:
Improved productivity and turnaround time
Cost savings from automating workflows
Better compliance and increased overall accuracy
13
Smart Information Tools: All About Providing Smart Information Tools: All About Providing Solutions Solutions
Maintain
Research
AmendMerge
Withdraw
Create
CTAdvantage.com
An Example: Life Cycle of a Business EntityAn Example: Life Cycle of a Business Entity
14
• Significant productivity improvementsSignificant productivity improvements• Better accuracyBetter accuracy• End to end solution improves turnaround time for End to end solution improves turnaround time for
gaining state approval.gaining state approval.
• Significant productivity improvementsSignificant productivity improvements• Better accuracyBetter accuracy• End to end solution improves turnaround time for End to end solution improves turnaround time for
gaining state approval.gaining state approval.
Value AddedValue Added
CT Advantage.com’s intelligent filing tool minimizes repetitive effort.
• The customer responds to single set of questions and the The customer responds to single set of questions and the website fills out the appropriate forms. website fills out the appropriate forms.
• If the project is paused and the task extended by 6 states, If the project is paused and the task extended by 6 states, the customer does not have to start over. the customer does not have to start over.
• The information is stored and one can resume completion The information is stored and one can resume completion without having to redo previous efforts.without having to redo previous efforts.
CT Advantage.com’s intelligent filing tool minimizes repetitive effort.
• The customer responds to single set of questions and the The customer responds to single set of questions and the website fills out the appropriate forms. website fills out the appropriate forms.
• If the project is paused and the task extended by 6 states, If the project is paused and the task extended by 6 states, the customer does not have to start over. the customer does not have to start over.
• The information is stored and one can resume completion The information is stored and one can resume completion without having to redo previous efforts.without having to redo previous efforts.
Qualifying to do business in multiple jurisdictions
• E.g. ABC Inc. needs to file qualification forms in 12 E.g. ABC Inc. needs to file qualification forms in 12 different statesdifferent states
• Despite similar content, each form is unique and Despite similar content, each form is unique and requires customization.requires customization.
Qualifying to do business in multiple jurisdictions
• E.g. ABC Inc. needs to file qualification forms in 12 E.g. ABC Inc. needs to file qualification forms in 12 different statesdifferent states
• Despite similar content, each form is unique and Despite similar content, each form is unique and requires customization.requires customization.
Smart Information Tools: All About Providing Smart Information Tools: All About Providing SolutionsSolutions
““Create” Workflow: Using Create” Workflow: Using CTAdvantage.comCTAdvantage.com
TASKTASK
TOOLTOOL
15
How Does Our Strategy Differ from How Does Our Strategy Differ from Competitors?Competitors?
• Large media companies such as Thomson and Reed Elsevier focus primarily on aggregation of content:– Aggregation is the compiling of owned and third party
information, often delivered through a common platform.
– Products and functionality offered through delivery platforms such as Westlaw and Lexis-Nexis are designed to serve research needs across broad range of customers.
– Functionality does not lend itself to the specific workflows or needs of specific customer segments.
• Small, niche players provide single or “one off” solutions:– Lack full product suite for satisfying customer needs.
– Integration between products is limited.
LTB-NA is Focused on Leveraging Integration of its LTB-NA is Focused on Leveraging Integration of its Products and Content to Provide SolutionsProducts and Content to Provide Solutions
16
Providing Integrated Compliance Solutions to Providing Integrated Compliance Solutions to Professional Markets Cornerstone of StrategyProfessional Markets Cornerstone of Strategy
• Extend leading positions in proprietary content to software productivity tools and services within existing market segments (e.g. Tax and Accounting Destination Site)
• Leverage current positions in growing markets to expand product line and market share (e.g. legal services, banking, securities)
• Enter new markets that fit strategic requirements (e.g. "must have” information and software)
• Pursue strategic acquisitions that support growth
17
Significant Progress Made in 2001Significant Progress Made in 2001
• Internet revenues grew 74% from 2000 to 2001
• Launched Key Destination sites including:
– Tax and Accounting
– Legal Compliance Service
– Lender Due Diligence (iLien)
• Extend into Tools within Existing Markets
RESULTS KEY ACTIONS STRATEGIC ELEMENT
• Expanded software tool product suite in key growth markets. Today, LTB-NA has over $200 Million in sales to these markets.
• Extended product suite in mortgage and small business lending.
• Extended insurance product suite into forms and compliance systems.
• Launched key software tools to Banking, Securities and Insurance markets, including SEC Desktop; Option and Planned Participants Modules, Product Filing Guide for Life and Health and P&C.
• Acquired CBF and TSoft to expand market position in banking and Uniform (01/02) in insurance.
• Leverage Current Positions in Growing Markets
18
Significant Progress Made in 2001Significant Progress Made in 2001
• Grew Loislaw revenues by 35%
• Created beach-head for further expansion in environmental market.
• Expanded Loislaw content and coverage, tools and offerings.
• Acquired content assets in the environmental market.
• Enter New Markets
RESULTS KEY ACTION STRATEGIC ELEMENT
• Expanded product suite, particularly software tools and compliance products.
• Increased revenue base by approximately 7%.
Key Acquisitions in 2001 Include:
• Loislaw
• CBF Systems
• Compliance International
• EPace Software
• Document Technologies
• Capital Commerce Reporter
• Tax byte
• eSalesTax.com
• Strafford Publications
• Execusite
• Cutter Environmental
• BNA Medicare
• Uniform Information Services (01/18/02)
• Pursue Strategic Acquisitions
19
Strategy in ActionStrategy in Action
– Investments in Smart Tools and Integrated Solutions
– Tax and Accounting Destination Site
– Product Demonstration: Client Relate
20
Smart Tools Investment Leverages Our Smart Tools Investment Leverages Our Content Strength and Market Position.Content Strength and Market Position.
• In 1997 LTB-NA launched the CCH Tax Research Network, now generating USD 55 million of annual sales.
• Total Internet sales are USD 170 million in 2001. Recently launched Internet products including Tax Notebook, Complete Tax Pro and iLien are starting to contribute to this figure.
• LTB-NA has in 2000 and 2001 spent a total EUR 56 million as part of the EUR 250 million additional Internet program, of which more than 60% on new product development
21
Integrated Tools Provide Significant Cross-Integrated Tools Provide Significant Cross-sell Opportunities: An Examplesell Opportunities: An Example
CCH FAST143K PFX
22K
ASPEN76K
17,800
32404400
10,500
Total Customers*(Subscription +
Book)
CCH FAST48K
PFX22K
ASPEN76K
10,8002700
4400
7100
Subscription Customers*
*Total Unique Subscription Customers = 126,467
**Total Unique Customers = 212,059
22
Our Product Suites Are Delivered Through Our Product Suites Are Delivered Through Customer-Specific Destination SitesCustomer-Specific Destination Sites
• Significant investment in customer specific destination sites has occurred since late 2000.
• Destination sites provide customers with an integrated desktop, including content, tools and services delivered via the Internet.
• Sites are focused on core customer segments, including Tax and Accounting, Legal Compliance Services, Legal Research (LOISLAW), Financial Services, Securities Compliance and HR.
• Offering our product through these sites provide significant benefits:
Increase productivity and accuracy through efficient data reuse
Provide one point of access for customers
Create smart links and tools that mirror the way a professional works.
Enable anywhere/anytime access for customers to operate a significant portion of their practice through the Internet.
Tax and Accounting Destination SiteTax and Accounting Destination Site
24
LTB-NA is the Leading Provider of LTB-NA is the Leading Provider of Information & Productivity Tools to the Tax & Information & Productivity Tools to the Tax & Accounting MarketAccounting Market
ResearchResearch ComplianceCompliance
LTB-NA LTB-NA CompanieCompanie
ss
•CCH US Publishing
•CCH Canadian
•Aspen Publishers
•CCH Tax Compliance
•CCH Canadian
•CCH US Publishing - DPC
Market & Market & ProductsProducts
•Primary, secondary & tertiary materials delivered in all media
•Over 90% penetration in accounting firms
•Internet accounts for over 40% of sales
•Harcourt & Strafford acquisitions bolster accounting content
•Tax prep, audit & practice management software targeting medium & large firms
•Over 60% of top accounting firms use ProSystem fx Tax
•Sales and use tax rates tables and calculation software
CompetitoCompetitorsrs
•Thomson (RIA & PPC)
•BNA
•Tax Analysts
•Thomson (CLR & Creative Solutions)
•Intuit (Lacerte & Turbo Tax Pro)
25
Fragmented industry, despite significant consolidation in recent years
Growth driven by extension into related services, including financial & estate planning, business valuations, and systems consulting
Approximately 52% of new CPA engagements in 2000 came from cross-selling to existing clients
Shortage of qualified professionals; fewer examinees & high staff turnover
Increasing use of technology for tax preparation
Source: Accounting Today, AICPA
* As quoted by former SEC Chairman Arthur Levitt, 9/2000
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1994 1995 1996 1997 1998 1999
Top 100 Annual Revenue Contribution by Service (1994-1999)
Management Advisory Services Auditing and Accounting Tax
Average Annual Revenue Growth for CPA Service Groups (1993 – 1999)*
MAS A&A Tax Services
26% 9% 13%
Key Industry Trends
Change Since 1994
- 9%
- 17%
+26%
Accounting Market Overview:Accounting Market Overview:Redefinition of the Accounting Firm’s PracticeRedefinition of the Accounting Firm’s Practice
26
Accounting Market OverviewAccounting Market OverviewThese Trends Present Growth Opportunities for LTB-These Trends Present Growth Opportunities for LTB-NANA
• Increasing demand for productivity tools
• Increasing demand for content and software tools in new topical areas e.g. Smart Information Tools
• Opens new market segments that support growth areas for CPA firms
LTB-NA OpportunitiesLTB-NA Opportunities
27
–Audits
–Financial Statements
–General Ledger
• Tax Compliance
–Income Tax
–Sales & Use Tax
• Planning
–Income Tax
–Sales & Use Tax
CCH’s Integrated Product Suite Assists CPAs CCH’s Integrated Product Suite Assists CPAs in Satisfying the Needs of Business Clientsin Satisfying the Needs of Business Clients
• ProSystem fx
• DPC TaxSolver
• CCH Tax Research Network
CCH Integrated Tools
BusinessClients
• ePace! Paperless Engagement
• ProSystem Fixed Assets
• Miller Series including FASB, GASB
• CCH Tax Research Network
CCH Integrated Tools
Integration of
Client Data and Content
=
• CCH Tax Research Network
• CCH Client Relate
• CCH TaxTracker
CCH Integrated Tools
28
• Planning
–Year end Tax Planning
• Information Gathering
–Income Tax
• Planning
–Financial
Planning
–Estate
Planning
And CCH Provides a Broad Range of Products And CCH Provides a Broad Range of Products and Tools to Satisfy the Needs of Individual and Tools to Satisfy the Needs of Individual ClientsClients
IndividualClients
• Compliance
–Income Tax
• CCH Tax Research Network
• CCH ClientRelate
• ProSystem fx
– Prior Year Tax Return
– ProSystem fx Planning
• ProSystem fx
• Tax Notebook
• Complete Tax Pro
• Execusite CWS
• ProSystem fx
• CCH Tax Research Network
• CCH Client Relate
• CCH EnterAct and ViewPlan
• CCH Tax Research Network
• CCH Client Relate
• CCH DataXchange
• CCH Solutions
CCH Integrated Tools
CCH Integrated Tools
CCH Integrated ToolsCCH Integrated
Tools
Integration of Client Data and
Content
=
29
These Products are Delivered Through One These Products are Delivered Through One Comprehensive Internet SiteComprehensive Internet Site
30
CCH Client RelateCCH Client Relate
• Opens the door to higher levels of service
• Provides new revenue streams for the tax professional
• Keeps client tax return database – local and secure
• Leverages the editorial power of CCH and the processing power of CCH’s ProSystem fx Tax Compliance System
CCH Client Relate DemonstrationCCH Client Relate Demonstration
Flash Demo
32
LTB-NA Opportunity: Integration Provides LTB-NA Opportunity: Integration Provides Significant Cross-sell OpportunitiesSignificant Cross-sell Opportunities
CCH FAST143K PFX
22K
ASPEN76K
17,800
32404400
10,500
Total Customers**(Subscription +
Book)
CCH FAST48K
PFX22K
ASPEN76K
10,8002700
4400
7100
Subscription Customers*
*Total Unique Subscription Customers = 126,467
**Total Unique Customers = 212,059
CCH Client Relate has created a potential
cross-sell opportunity of $12M of which the first $2.5M has been realized in 6 months
time.
33
Future Developments: Capabilities to Future Developments: Capabilities to Enhance CPA & Client CommunicationEnhance CPA & Client Communication
• Financial Professional’s Internet Office
– Custom Web Sites (CWS) - ASP-based website solutions for accounting and tax professionals from our Execusite acquisition.
– Private Client Services (PCS) – web-based communication and collaboration tools which allow CPA firms to interact with and provide a set of rich, customized solutions to individual clients.
– Firm Member Services (FMS) – customized firm-wide Intranet that organizes work task components from applications into a high-level integrated view.
34
Firm’s financial planning expert receives a notification through FMS to review the client’s financial plan. She accesses Enteract as well as the CPA’s notes through FMS and completes the plan for the client. Per the client’s instructions, permission to view these documents is granted (using PCS) to the client’s broker and insurance agent, who are given view and modify access.
Working collaboratively with the broker (through PCS), the financial planner modifies the plan. She schedules a meeting through FMS of all firm members working with the client on the site, each of whom receives an electronic notification of the meeting.
Firm members, broker and the client all meet virtually to discuss financial plans, each viewing these documents, through PCS. They are modified collaboratively and then stored in the client’s PCS area along with the tax return and other private documents.
Weeks later, CPA mines his client base using CCH Client Relate to determine who is affected by a recent development He e-mails the client and they agree to meet in the PCS area at a predetermined time. Together, they view the client’s last tax return and financial plan online from the PCS area and discuss the implications.
Future DevelopmentsFuture DevelopmentsWorkflow EnhancementsWorkflow Enhancements
Prospective client visits the CPA firm’s CWS and decides to become a client after reading content on the site discussing implications of a new tax law for her state.
CPA enters FMS, accesses Prosystem fx and completes client’s tax return. Data is then automatically fed into Enteract. The resulting return and initial financial plan are once again placed in the PCS area. His notes on the client are placed in the firm’s FMS document management system.
After their initial meeting, client enters tax information through Tax Notebook built into CWS. Data gets stored in a secure PCS area for online viewing.
Client works with CPA firm to customize their PCS area. This includes the viewing/access to their documents as well as what other third party data (e.g., brokerage statements) will be included.
35
CCH Tax Prosystem Products are used byAmerican Express to
execute their tax strategy!
Some of these Tools are In Use Today!Some of these Tools are In Use Today!
36
Increased switching costs resulting from being embedded in workflow
Increased cross-selling opportunities
Fully integrated products increase productivity and increases available hours to offer additional billable services
LTB-NA Advantages
Revenue stream generated outside of traditional research and compliance budgets
Opportunity to update clients constantly
LTB-NA StrategyLTB-NA StrategyBenefits for Customers & LTB-NABenefits for Customers & LTB-NA
Applications that deliver increased level of proactive customer service
Remote access to applications
Customer Advantages
37
LTB-NA Strategy: Become a Valued Partner LTB-NA Strategy: Become a Valued Partner in the Redefinition of the Firmin the Redefinition of the Firm
• Combine assets of LTB-NA businesses & leverage their strengths.
• Provide one point of access for customer.
• Integrate LTB-NA products & services to support the professional’s workflow.
• Enable firms to operate a significant portion of their practice through the Internet.
38
Appendix MaterialAppendix Material
39
ClientRelate Bulletins are sent via e-mail with direct links to CCH TRN content.
40
Services have a longer “shelf-life” and can be executed directly from CCH Tax Research Network over the internet.
41
Each Service contains a Service Summary, Engagement Planning Tools and a Sample Client Letter.
42
One click on the ClientRelate icon launches the search against the tax professional’s secure tax return database.
43
Search criteria can be modified for CPA to narrow or expand search criteria to better fit their client base
44
Search Criteria and Results List are returned in minutes.
45
Step by step engagement planning tools are included as additional support material
top related