Session Three Next Generation Supply Chain
Blockchain: new payment system for the sharing economy
Matthew Key Head of Customer Innovation at BT
Global Services
Market Trends
• What is it?
– It is the architecture underpinning the cryptocurrencies like Bitcoin and Litecoin.
– It is a distributed ledger where transactions are recorded in the network and the nodes in the network constantly validate those transactions.
– The real excitement is that this distributed system, in theory; can process transactions much quicker and much more cheaply than the existing banking system with its inherent delays.
– The blockchain architecture allows a distributed network of computers to reach consensus without the need for a central authority. This aspect is the most controversial.
– It also can currently be used anonymously with obvious drawbacks.
Market Trends ‘Distributed ledger technology has the
potential to transform the delivery of public and private services. It has the potential to redefine the relationship between government and the citizen.. and trust and make a leading contribution to the government’s digital transformation plan.
Any new technology creates challenges, but with the right mix of leadership, collaboration and sound governance, distributed ledgers could yield significant benefits for the UK’
Sir Mark Walport HMG Chief Scientific Advisor 19/01/2016
Blockchain introduction
Slow and expensive
reconciliation
Reconciliation is
automatic
and included in the
protocol
Central party can
‘tax’ other
participants
Autonomous
network with no
central party
Central party has
control
over the register
Entries into the
database are
agreed by
consensus
Single point of failure No single point of
failure
Bottleneck for
processing
Processing is
distributed
Results:
1. Costs: 3% -> 0.5%
2. Time: days -> 5 sec
VS
Use cases • Financial Services
– Trading and settlement
– Retail – mortgage applications, Person to person payments
– Currency exchange
– Insurance
• Others
– Delivering benefits or aid to intended recipient.
– Proving ownership of digital assets
– Smart Contracts
– Voting
– Identity and authentication
– NHS administration
Activity
• Start up community is in hyperdrive over this. Expect consolidation and shakeout. Several hundred already in this space (that’s we know of) across
- Blockchain infrastructure and protocols
- Platforms and APIs
• IBM, Intel and many others large corporates active in this area.
• R3 banking consortium looks to bring order to this chaos
• Banks/FS providers setting up their own teams, incubators to develop ideas.
Issues
• Big security/trust issues but plenty of emerging potential solutions.
– Area of most concern, but where BT’s research is focussed
• The current use (of Blockchain) by over 400 digital currencies is rife with issues but very small economic impact
• Many variants of blockchain (private, hybrid) therefore needs standards- R3 leads this.
• Regulatory uncertainty but progress is are being made
• Complex array of technological challenges but considerable Innovation in this space.
Early services and Impact on Vehicle Rental Sector
• Some limited early examples
– Office Rental-Short Period Insurance
– Visa car leasing proposition
– UK Retail Bank customer proposition this year.
– European Bank testing for Identity verification
• Summary: Blockchain solutions will arrive- early versions this year. 2 Years for mainstream and yes it could play a significant role in your sector.
The Market To Date
• Principle Products – Contract hire – Personal Leasing – Fleet management – Short term Rental
• Increasing Services • Low interest rates • Green Policies
Current Changes
• Connected Cars – Driver Behaviour – Lots of Data – Vehicle Condition Monitoring – Location Tracking – Journeys – Logistics
• “Mobility” – Car Sharing – Incident Management – Travel
• Electric Vehicles • Salary Sacrifice • Financial Changes
– Negative Interest Rates – IFRS16 Imposition
Market Trends
US Government Data There are signs that car usage is starting to decline
Published in The Economist
Market Trends
Users expect interactions to be mobile and efficient
The Effect
• Mobility becomes a reality – Flexible Contracts – Assetless Contracts – Car Sharing – Incident Management – Travel Administration – Car Policy becomes Mobility Policy
Flexible Contracts
• Assets – Contract Hire re-contracts become an on-line
tool for FM’s – Car sharing management – Mid Term Contracts (potentially car sharing) – Short Term Rental – Pay As You Go – Fleet Management
No. Units
Contract Short Term Rental Mid Term Grey Fleet Car Sharing Contract Hire / FM
Asset Less Contracts
• Equally Flexible – Flexible Service Choices restricted by grade / role – Usual Flexible Billing
• Hierarchy splits • Drivers • Consolidated with Asset Billing • Integrated with rental / incident management etc
– Expenses Management – Travel Cards / Management
Car Sharing
• What is required – Multiple pools / locations by customer – Ability to allocate / de-allocate vehicles to the pool.
These vehicles could be mix of owned / leased / rented – Ability for drivers to request bookings, search for
available vehicles, allocate those vehicles and track actual usage.
– Ability to set rates and manage internal cross charges – Ability to manage all the financial transactions with high
automation
Incident Management
• What is required – Incidents cover multiple customer needs: -
• Information request • Short term vehicle request • Service booking with relief vehicle • Accident with towing, relief vehicle, transportation,
hotel, repatriation • Travel requests • Complaints
Mobility Policy
• Customers have many choices – Permanent lease vehicles – Fleet Management – Electric Vehicles – Car share – Salary Sacrifice option requiring grey fleet
management – Rentals and Mid Term contracts – Non Vehicle Transport (Bus / Taxi / Train)
Capitalising on the Opportunity
• To capitalise on the opportunity the key is technology
• It needs to combine traditional leasing and associated services with rental, driver services, connections to external travel tools all delivered through seamless user interfaces
• It needs to have very high levels of customer specificity and automation based on these rules
• It needs to leverage high volumes of collected data becoming intuitive for users (they are used to services such as Google and Amazon knowing what you want before you do)
Or…
Delivery
Incident Reporting and Status
Quotations
Car Share Requests / Status
Trip Data and Expenses
Driving Performance and Alerts
Fuel Transactions
Travel Requests
Service Alerts
What does this mean?
• More Transactions. • Greater Complexity. • More IT Interfaces. • More Functions. • More Data.
Risky Business
• Challenge to existing IT Infrastructures
• Increasing multiplicity of systems
• Huge increases in internal interface complexity
• Already creaking legacy systems.
SAP *
Quotes
Interest adjustment
NVR inc. CAS/PCP
Fuel (including Leasing * + and Networks +)
Customer Rental Billing AR/GL
EPOS
manual fuel vouchers
MAINFRAME
Mini Lease lease billing *
Local Account Card (LAC) * Purchasing Card * (makes own payments)
Certegy
Bank
CHOS
AMS
Client Invoicing *
To AR
Capita
Irish Fuel * (aka Eirecaps)
PRICING Policy data
Pinpoint
Car Hire companies Vehicle Rental
Client MAP Info.
Magic Box
Fleetcom Centracall
Reference and billing data
Interactive
Reference data
Eurofleet
Reference data, clean billing data
Interactive e-update asset
Interactive e-update client card
Customer and vendor reference data Reference data
1Link Relicensing
Policy Financial suppression
Financial suppression
Rectify
TPOT Lease billing data
VDIS
Roa
d ta
x du
e
Breakdown company Breakdown vehicles
DRP CBA*
Rental policy Valid codes
Booking
Bookings/E
xtensions
Reference data
Financial suppression
Clients and vendors
Mini Lease Allocations
Supplier
MS Excel Matisse GL Manual GL
To GL
KeyFleets (Prolease) * Subsidery (Prolease) *
Eiger Account Validation lookup
Customer
AR files
Outstanding balances Bottomline
Fuel
tran
satio
ns
Cha
rges
Val
id to
tax
Veh
icle
tax
deta
ils
I & O
AR
Customer ref data
Bill
ed
trans
actio
ns
Ren
tal t
rans
actio
ns
Fuel and SMR billing data
Bill
ed tr
ansa
ctio
ns
Vendor, custom
er, asset data Mini Lease hire details
Bill
ing
Dat
a S
MR
eve
nt d
ata
Mas
ter D
ata
Policy data
Client, contract, specs, vendors
Data supplier
Collection balance Supplier Payments
Invoices (into AR)
Supplier
payment
Supp Payments
BA
CS
C
heques
Supp Payments
UK BACS Irish Bank PAYCE
N6, N7, N8, N9 to GL
MS Access based system. Web based system.
Assets To Bill
AP Reimb Invoicing *
GL
AR
Powerbuilder based system.
Questionnaires
EDB
SPIN
NVR assets/fittings and card requests
Data Warehouse
Data Warehouse
Some reference data
Data Warehouse
3rd party authorisation
Det
ail C
odin
g Vehicle Ref Data (including Residual Values (RVs))
RS6000 based system. Dataflex based system.
Glass Transactions Glass Payments Incident transactions/charges
TMS
Shredder
Epyx/1Link (Translease) Vehicle Service histories SMR vendor invoices
Supplier Invoices (into AP)
Customer Invoices (into AR) Includes: RDDD, ADDACS, AUDDIS, Bank Statement
Self Registration Logins
Client
data
MCS Card data
Maintbook Vehicle lines data
Reporting Reference and billing data
SMR event data
Refunder Expected refunds
OLA Cards MF cards
MF cards
CardClear Hotlisted cards
Supplier
Txns for authorisation/ authorised txns
TNS
Progress based system.
Pol
led
txns
Unvalidated txns
Reference data
Legend + Denotes a system which feeds Data Warehouse. * Denotes a system which produces client Invoices. Denotes existing interfaces. Denotes SAP inbound. Denotes SAP Outbound.
System external Mainframe based system.
Data store not an application (NB Only 1 Physical Data Warehouse entity exists)
Delphi based system.
Customer profiles
Client Drivers Acceptance/check in
Mileage readings
AMS client, supplier, card, asset reference data
AM
S client, supplier, card, asset reference data
FMG AMS client, supplier, card, asset reference data
FMG Policy Client policy Client policy
Tranzline Laptop Customer
Clients, vendors, service histories
Reference data
Unvalidated txns
Invoice prints Ta
x di
sk re
fund
s
Eve
nt in
form
atio
n
Financial suppression
Client data
Interactive e-upate client card M
F Reference data
MF Reference data
MF Reference data
Reference data
Reference data
Reference data Client data
Interactive e-update asset Reference and biling data
Logins
Matchstick Vehicle lines and RV data Vehicle lines and RV data
Vehicle lines and RV data
Vehicle lines data
Vehicle lines and RV data
Vehicle lines and RV data Vehicle lines and RV data
SMR txns
Supplier reference data
Vehicle lines data Sold assets
ED
I invoices
Paper invoices
Customer, card and daily txns
Centrefile
Vehicle, card and vendor data
To GL
eRetriever Vendor RA Invoice details
Retriever Invoice details Vendor RA
Customer payments & assets from AR, GL Invoice prints
Key - for-key
Customer policy data
Returned DD file DD
Reference data
Interactive e-update client card
Manual
PCP Reference data Pricing data
Interactive Security Security access Security access
SM
R vendor
invoices
Billings and text
CLIENT Txns
Drivers and vehicles
DEW/ STAR
Client
Suspect txns
Valid txns
Fuel Rebates Payments Fuel txns
DWP FAMIS Vehicles and txns
ICI Vehicles, billed txns
VMS Enquiry Collections
Cheque RA Fleetcard special outputs Fuel brand analysis
DMS Rental billings
New LVR
Journals
Postings
Infrascan
Archiver
Change of Name Copy Voucher
FTE Headcount
Compass
Charger
Blueprint
Dimensions
Profile Calculator Profiles Profile Loader Quotes
Client profile quotes
IBM EDI Purchase orders IBM
RV Reserves
Job codes, labour times
NatWest Bankline Bank statements and CHAPS
Adjuster
Asset data
CAP RVs
RVs
Client
OPX2 CCH
Bookem Farmer
Errors VMD
Surf
VMM Tracker
Tranzline Networked Customer
Fuel Voucher Voucher details
Terminator Early terminations
VTAR Addresses Driver addresses
Allstar Online Txn, copy voucher and client data
National Supplier
REIMS
EDI invoice types Glass txns
EDI invoices
Parts & price catalogue
Invoice types, glass, parts & price catalogue
Oracle Financials
Abacus
Payroll Deductions
IRIS OROS PWA
PHHBatch Various data
Self Billing
Billed txns
RDD Receipts System Letters, mailmerge Reaper Casper Sundry invoice lookup
CAS PCP
Scribler Snap
Car
Hire
da
ta
Balancer GL account movements
Stanley Oliver
AMSFMGdatarep AMS client, supplier, card, asset reference data
Solimar Car Hire
EDI (Tradacom) RA Electronic payment
Electronic payment Forecast Model
Peugeot SMR txns
CAS PCP AR
PAS PUS
Fuel Voucher Checking Voucher details
P11D
Payroll
P11D
Bank details
FleetSN
CC
, car sales
Sapencer CSV converter
Topcall SMS messages
Unique .co.uk
Online. co.uk
Credit DB Client
OFISMAN
FMGUser Daemon FMG logins and security access to Interactive
Fees
Incidents
Incidents
FMG Payments
FMG Payments
FMG security access
FMG security access
FMG
security access
FMG logins
FMG logins FMG
logins
FMG logins
ePCP Pricing data
eQuotes Policy data
Suppression File
Capwin Vehicle ref data
Sel
l and
SM
R p
olic
y da
ta
Estimated valuations and work instructions ePresentment
Registered users
email address changes
email address changes
HSE Fleetcard Disk Billed data
Surveys
Crackle
Client MF reference data
MF R
eference data
MF reference data
MF reference data
Governer Cards
Depreciator
Ass
ets
Client
Dealer Directory
M I Reporting
Tax Calc
Reco Report
GIS location data Policy details
PCSO
Special Outputs Special outputs
Vehicle lines
Bookings
Policy details
Policy details Policy details
Policy details
FMG
logins FM
G security access
Rental nillings
Rental billings
Rental billings
Lease billing data Lease billing data
Lease billing data Financial suppression
Financial suppression Rental billings
MF cards
Vehicle lines and R
V data
Renewals Vehicle data
Vehicle data
Vehicle data
Scheduler Monitor
Vehicle lines and RV data
Client Asset data
Asset data
Profile Loader Client profile quotes
SAP based system.
Client
Client
P & R SMR
Ezine Surveyor
Orange User Recognition
CAP
FAS
Root Cause Management
Disposals vat Buying Agency
Driver Interactive
P & R SMR Current asset position Current asset position
Account Managers Lib
• Key Point 1: Enabling Software
• Single Database architecture & technical environment
• Normalised data for high quality and low maintenance overhead
• Fully Coded Data
• Automated processes for operational activities to avoid poor data qualit
• Fully Auditable
• Rich suite of business rules configuration to meet specific customer needs
• Integrated eBusiness tools exploiting configuration / automation
Enablement
• Key Point 2: People Skills
• Top management have to be involved and committed
• This is business change management not just technology change
• Significant expertise is required to be successful • People development is intrinsic
Enablement
Project Key points
• Software ability to reach this step • Embedded in the top management
process
• Change management project
• Evolution of the models / processes becomes BAU
Project Key points Under estimated
Summary
What Is A Smart City?
“A place where information is shared to create an ideal environment resulting in happy citizens.”
Drivers Are Currently Lost
660 £ M
FINES ISSUED EACH YEAR
30 %
CONGESTION FROM VEHICLES LOOKING FOR PARKING
Wasted Time And Money
AVERAGE BRIT IN THEIR LIFETIME WASTES
347 LOOKING FOR A SPACE
DAYS 37 ON FUEL TRYING TO PARK
K £
REAL TIME BAY SENSORS
AppyParking™ has teamed up with Nwave to show drivers which bays are available and to reduce congestion, parking times and pollution.
Sparkit Sensor Nwave Base Station
Real time bay availability
Application Server
07/07/2016
Glass’s View on Technology in the Remarketing and Defleet Process Rupert Pontin – Director of Valuations
July 6th 2016
Reproduction and commercial distribution is strictly prohibited
Agenda
The Defleet Process
Defleet to Remarketing
Working Smarter
How Does Data Help
Summary
Reproduction and commercial distribution is strictly prohibited 207 07/07/2016
The Traditional Defleet Process
On Hire or
Live Fleet
Contract . End
Collected and to Defleet Location
Full.Inspect
Released for Sale
Remarketing Channel
Online Platform
Wholesale Telesales Auction
?
Reproduction and commercial distribution is strictly prohibited 208 07/07/2016
Pro Active Defleet to Remarketing and Sale
SOLD
Contract . End
Full.Inspect
Driver Comms
Remarketing Channel
Online Platform
Wholesale Telesales Auction
On Hire or Live on Fleet
?
Inspect / Image
Vehicle Repair
Re inspect / Image
Complaint Resolution
Reproduction and commercial distribution is strictly prohibited 209 07/07/2016
Choose Remarketing Partner Wisely Review Market Intelligence Technology Drives Success Professional Inspection Resource Online Automated Approval Processes Link Defleet and Wholesale Remarketing
to Retail Sale
Defleet to Remarketing and Sale
Reproduction and commercial distribution is strictly prohibited 210 07/07/2016
Pro Active Defleet to Remarketing and Sale
SOLD
Contract . End
Full.Inspect
Remarketing Channel
Online Platform
Wholesale Telesales Auction
On Hire or Live on Fleet
?
Inspect / Image
Complaint Resolution
Reproduction and commercial distribution is strictly prohibited 211 07/07/2016
Working Smarter – the full picture
Trade Sale
Retail Sale
Remarketing Channel
Online Platform
Wholesale Telesales Auction
Days to Sale – 42.9
Reproduction and commercial distribution is strictly prohibited 213 07/07/2016
Smart Means What ??
Vendor
15 days from Dehire to Sale Average Trade Value - £7,441
Finance Cost - £15.30 Storage Cost - £8.25
13 days from Dehire to Sale
Finance Cost - £13.26 Storage Cost - £7.15
(Improved Value - £150) (Damage Charge - £??) Drop of - £3.14 per car
£29,409 Saving / 13.4%
Retailer
54 days from Purchase to Sale 6.8 cars per year
70 car pitch £750 net
£357k per annum
50 days 7.3 cars per year
£383,250 +7.3%
Reproduction and commercial distribution is strictly prohibited 214 07/07/2016
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2014 2015 2016
Data Helps - The Used Car Market - Year on Year Trade Sales Volumes
Data Courtesy of Glass
2014/15 - Used Volume up 8% 2015/16 – Used Volume up 1.5%
Reproduction and commercial distribution is strictly prohibited 215 07/07/2016
Data Helps - % of Original Cost New – fleet sector
36.77%
36.99%
38.56%
39.78% 40.20%
39.62%
38.65%
36.50%
37.00%
37.50%
38.00%
38.50%
39.00%
39.50%
40.00%
40.50%
2009 2010 2011 2012 2013 2014 2015 2016 2017
RV as a % of Original Cost New Fleet Sector – 2.4 to 4.6 yrs
Data Courtesy of Glass
Reproduction and commercial distribution is strictly prohibited 216 07/07/2016
Data Helps – Days on Site – composite auction data
0.00
2.00
4.00
6.00
8.00
10.00
12.00
1 1 2 2 3 3 4 4 5 5
Days On Site by Grade - 15/16
Data Courtesy of Glass
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Data Helps – Prep Time by NAMA Auction Grade – fleet sector
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
VEH
ICLE
PR
EP T
IME
(DA
YS)
01/06/2015 01/07/2015 01/08/2015 01/09/2015 01/10/2015 01/11/2015 01/12/2015 01/01/2016 01/02/2016 01/03/2016 01/04/2016 01/05/2016 01/06/20165 11.6 13.4 15.5 12.4 16.9 12.8 12.3 16.0 17.6 16.5 13.5 16.0 20.64 11.1 10.4 11.0 12.7 10.8 10.8 11.1 11.9 13.2 10.1 10.2 11.6 12.03 10.1 10.5 9.8 10.7 10.7 11.6 11.3 11.1 9.6 9.2 9.9 9.3 10.72 10.2 11.0 11.2 10.8 11.3 11.8 10.9 11.3 9.9 9.9 9.4 10.6 10.41 9.7 10.7 10.4 10.9 10.6 10.8 11.1 11.5 9.8 10.2 10.3 10.8 10.9
Vehicle Prep Time (Days) by Grade
Data Courtesy of Glass
Reproduction and commercial distribution is strictly prohibited 219 07/07/2016
Trade to Retail Journey – June 2016
Trade Sale £7,441
Prep Time 10.9
Retail Asking £9,382
Stock Days 42.9
Retail Transacted £9,164
Retail Margin 23.1%
Journey from trade auction to retail forecourt sale*
June 2016
Data Courtesy of Glass
Reproduction and commercial distribution is strictly prohibited 220 07/07/2016
Summary
• Remarketing Partners Drive Defleet Speed
• Technology Advances – better linking and partnerships
• Brexit Impact is NOT Evident
• Downward Pressure on Values from Volume
• Recession is a Possibility
Quicker Defleet Processes and Market Insight are Critical for Success as we head Post Brexit……
"Cars are driven by people. The guiding principle behind everything we make at Volvo, therefore, is – and must remain – safety.” Assar Gabrielsson and Gustav Larsson,1927
Over one million lives have been
saved by the three-point safety belt since 1959
Lifesaving technology
Vision 2020 In the short term, our vision is that by 2020
no-one should be killed or seriously injured in a
new Volvo car.
Our longer term vision is to design cars that
do not crash.
• Improvement in efficiency of restraint systems.
• Greater use of high strength steel.
• Materials work together to minimise transmission of impact to occupants.
Improvement in crash performance
• Road accidents are reducing. • Statistical analysis becomes more difficult. • Unusual types of accident gain higher priority
for analysis. • For example – run off road accidents.
Accidents are changing
• Monitoring driver attention and assessing driver capabilities. • Brain and workload studies. • Technologies to be ’Designed Around You’.
Focus on the driver, not the technology
Advances in active safety systems
Automatic braking for
more objects
Automatic braking in darkness
Automatic braking in
intersections
Road edge and barrier steer assist
Pilot Assist - distance and
steering
New generations
new opportunities
new challenges
with connectivity
Millennial Smartphone Behaviour, USA, 2014
• Autonomous driving creates opportunities for:
• Safety • Fuel economy • Traffic flow • Improved mobility • Infrastructure • Comfort • Urban planning
Autonomous driving opportunities
• The world’s first large scale project for self-driving cars
• Project started in 2014 • Self-driving cars on public
roads in 2017 • 100 customer cars • 30 miles highway / max
speed 50 mph
Drive me project
• Typical commuter routes in and around Gothenburg
• Several lanes • Frequent queues • 4 tunnels • Few intersections • No on-coming traffic
Test route
• Commencing 2017. • Initially a limited number of semi-autonomous cars. • Expanding in 2018 to include autonomous cars. • The largest and most extensive AD test programme on UK roads.
• So what could the future hold?
Drive me london
• Can be steered actively with the farmer in full control.
• Can handle situations where the farmer is out of the loop and still find its way home.
• Won’t accept being steered into a tree or off a cliff.
The car of tomorrow – like the farmer’s horse
Conference Close Tea / Coffee and Networking
Thank you to all our speakers, sponsors
and exhibitors for contributing to this event.
Safe journey home.