1. FINANCE
Supply chain finance is the business case for a digital economy ecosystem
TECHNOLOGY
PROCUREMENT
April 2016

2. UK Local Authorities est. NHS England est. £40Bn of £138Bn
SCF is one of the largest markets in the world, supported by constant Buyer & Supplier activity
GLOBAL MARKET
EU MARKET
$20 trillion trade credits
Euro Area Sovereigns: EUR 2 trillion
UK Local Authorities est.
£60Bn of £172Bn
UK SME turnover
£1.2 trillion
UK Central Govt.
general £75Bn
NHS England est. £40Bn of £138Bn
State Education
England £15Bn
Invoices are constantly created between buyers of goods/services (Buyers) and suppliers of goods/services (Suppliers).
When Buyers approve invoices, Suppliers can choose to hold invoices to maturity, or sell individual invoices to a SCF lender in exchange for an immediate cash payment (at a discount from face value).
EUR 2 Trillion
[‎24/‎03/‎ :04] Damian Crowe:
On slide 5 I do not believe EU sovereigns procure EUR 5 trillion per annum
In the research I’ve done, the figure is less than EUR2 trillion
[‎24/‎03/‎ :06] Damian Crowe:
That’s procurement spend
If you look at the figures we’ve got for the UK on slide 5, then intuitively it simply cannot be that EU sovereigns procure EUR5T per annum
The UK is less than £200 billion
[‎24/‎03/‎ :07] Damian Crowe:
Add a similar number for France and Italy
£600 billion
[‎24/‎03/‎ :07] Seamus Desouza:
5 comes from the referenced research on budgets
Add (say) £300 billion for Germany (which is conservative)
We are now at £900 billion
 [‎24/‎03/‎ :08] Seamus Desouza:
I didn't have anything on procurement
[‎24/‎03/‎ :08] Damian Crowe:
So that’s Germany, France, UK, Italy
Everything else is small fry
The figures don’t stack up to anything near EUR 5 trillion
[‎24/‎03/‎ :09] Damian Crowe:
EUR2 trillion is defendable (and even that’s on the high side).  EUR5 trillion is indefensible
[‎24/‎03/‎ :09] Seamus Desouza:
OK - I'll change it to 2
[‎24/‎03/‎ :10] Damian Crowe:
Otherwise, it looks fine to me
I approve
The only other thing you could do, if it was easy ...
Sources: | |

3. The challenges of supporting small businesses
25/10/13
25/10/13
25/10/13
The challenges of supporting small businesses
Buyer
Buyers effectively creating value to Tier 1 Corporates shareholders
Cash does not reach those most in need of it
Difficult “policing” social charter
Pay Tier 1 between
days
Tier 1
(Corporate)
xxxxxxxxxxxxxx Cash Blockage xxxxxxxxxxxxxx
Pay Tier 2 between
days
Tier 2
SME 3 3

4. Obillex Multiplier Effect
Supply Chain Transparency (e.g. liquidity traceability)
Supply Chain Governance (e.g. compliance)
Enhanced Supply Chain Rationalization
Interoperability Opportunity: STANDARDS
SMEs WACCs can be as high as 18-24%
SME
Tier 5 Supplier
Construction Firm Illustrative Example
SME
Tier 4 Supplier
SME
Tier 3 Supplier
SME
Tier 2 Supplier
Mining Co.
Capital Markets
Steel Maker, Inc.
Steel
Wholesaler/Distributor
Raw Material Supplier (Tier 5)
Piling Work Ltd
Tier 4 Supplier
Build PLC
Tier 3 Supplier
Raw Material Supplier (Tier 5)
Sovereign Grade Credit
BCC
Tier 2 Supplier
Tier 4 Supplier
Tier 1 Supplier
Tier 3 Supplier
Raw Material Supplier (Tier 5)
Average Construction Industry WACCs: %
Tier 2 Supplier
Tier 4 Supplier
Raw Material Supplier (Tier 5)
Tier 3 Supplier

5. Key Market Drivers – Standards (e.g. PEPPOL - www.peppol.eu)

6. Birmingham Social Corporate Responsibility
The Obillex solution provides Birmingham a market based mechanism to achieve the goals defined the Birmingham Social Charter.

7. CSR as a driver of economic profit
Join Us!
Obillex Brand Values
Alignment of Values:
Obillex welcomes technologists, thought leaders, and visionaries to help build an ecosystem that promotes the economic health of Birmingham and the West Midlands
CSR as a driver of economic profit
Trust, Integrity & Quality
Localisation/Community
Enabler of the ecosystem
Transparent efficient & Fair
Security
Financial Digital Innovation
Decentralisation
Alan Morgan (Chairman) – UK/Global Financial Services thought leader as former Head of FS for McKinsey;
Nigel Smith (NED) – As former CEO of OGC he was the most senior public sector procurement official in the UK
Damian Crowe (founder & CEO) – Former ABN Amro, RBS, PwC, & CitiGroup
Nick Judge (CTO) – Former JPM, Deutsche Bank & Barclays
Marco Polito (RM) –Former Barclays, Barclaycard Supply Chain Finance
Seamus Desouza (PM) – Former Exxon treasury, PwC & JPM
Sean Andrews (HoO) – Former USAF Captain. Former Financial Management & Comptroller Officer
Importance of supply chain finance (SCF) to the economy
SCF is one of the world’s biggest sources of funds to business. It is the working capital ‘lungs’ of the business world and essential for suppliers.
SCF has traditionally been dominated by big banks, which use proprietary systems to lock in buyer and supplier relationships, lock out competitors and hold their obligations on their balance sheets (which increases the cost of supply chain finance and reduces its availability). The banks’ dominance represents a barrier to entry, which is preventing agile non-bank competitors from introducing innovations that would enable small companies to more easily access inexpensive finance for working capital, and also that large potential competitors to the banks such as insurers and pension funds are locked out of the market.
Banks are currently only serving 10% of the market and this means there is a very substantial opportunity for a more open and competitive mechanism to deliver near-unlimited volumes of funding for working capital to small, medium and large businesses and thus stimulate aggregate demand, efficiently invigorate the economy.