Cash Management

Effective & Efficient Cost Effective "Next Practice"

Wish u happy Weekend. Hope u might be enjoying Coffee to feed your sweet tooth and Grey cells.
I hope this blog post will be rejuvanate your Analysis Tooth also.

Dead Cash is the term used for the Cash filled in ATM but not withdrawn by customer for moretime. It is one of the cronic problem for any ATM NEtwork Manager.

According to the 2004 Dove Consulting ATM Deployer Study, deployers paid on average $180 a month for cash replenishment and $75 a month for cost of funds -- a significant chunk of the $1,194 average total monthly operating cost.

Many ISOs avoid these costs by asking merchants to fill machines with their own cash from the till. The merchant self-fill model isn't an option at some sites, however, because of security or other concerns.

"It's great to have an ATM that makes money, but the number one priority has to be the security of the customer," said Dennis Baker, owner of Supreme ATM, an Ohio ISO with some 100 ATMs under contract. "A rear-loading, through-the-wall ATM is the perfect scenario because they can load it any time. If they don't have that type of machine, but can load it before or after the store closes, that also can work."

Cash Management Thumb Rules:

Most ISOs using armored carriers have machines filled monthly, biweekly or weekly, depending on transaction volumes. Clatworthy encourages ISOs to "take the time to do some analysis" and determine optimal replenishment schedules.

Baker's formula for determining load frequency: multiply the number of weekly transactions by $55 (average withdrawal amount), then add 20 percent (in case unscheduled runs are needed). Divide by four, then round to the nearest hundred. Divide that number into the ATM's cash capacity, then round to the nearest one, two or four. This will help determine whether visits are needed weekly, bimonthly or monthly.

Analysis on Cash at Various Places in Supply Chain:

Baker said ISOs may be able to negotiate a better rate than the average $65-per-drop by asking the right questions during contract negotiations. For instance, ask if a carrier already provides a location with change orders.

"You should be able to piggyback on what that location is already paying," he said. "The carrier won't have any added miles and only limited additional exposure with ATM cash."

Schuldt, of Columbus Data Services, advises ISOs to ask a carrier if it provides its own service or sub-contracts with smaller carriers, a not uncommon practice. "You might be able to get a better rate by going directly to the smaller carrier," said Schuldt -- with the caveat that the risk of potential exposure could be higher for the ISO.

Find out when a carrier visits machines, Schuldt said. "If you've got a machine at a casino that does a lot of transactions over the weekend and they load it on a Monday instead of a Friday, that money is going to sit in the armored vault over the weekend costing you in interest."

Speaking of interest, Baker said ISOs should try to get carriers to commit to a one-day turnaround -- rather than the average two -- between the time it picks up cash from a source bank and fills machines. This concession is easier to obtain in large metro areas, he said.

All three men encourage ISOs to be wary of added fees, such as higher charges for deliveries outside standard service areas or fuel surcharges.

"You want to be aware of those and keep them as low as possible," Clatworthy said. "For instance, you may want to a contract to specify that fuel surcharges can't exceed the CPI (Consumer Price Index). If you've figured your cash costs, then all of a sudden you find yourself paying 4 percent more per drop for fuel, it can wreck your margins pretty quick."

HP builds Best OLTP Platform for Bank in China

HP has quitely created good capacity for it's Real Time Enterprise Framework for Banks. In India and Ireland they have won big ticket outsourcing bids and last to come is strategically important from China.

HP today announced an agreement with the Bank of Shanghai, a fast-growing retail bank with more than 200 branches, to build a standards-based service center designed to help the bank significantly reduce the costs and processing time of online transactions.

Working closely with TEMENOS, a provider of integrated, modular core banking systems, and Oracle, the world's largest enterprise software company, HP will build a complete service center to improve the performance of the bank's processing capabilities.

Scheduled for implementation in 2006, the service center will consolidate the Bank of Shanghai's global processing needs using industry-standard HP OpenBank infrastructure, software and services to deliver consistent information across multiple channels, such as branch, Internet, ATM and point of sale (POS) – dramatically improving customer experience.

Visit the Asian Banker link for detailed analysis from Gartner and future path of HP's RTE and outsourcing strategy.

Online Shopping - Big Wave for SMEs

ShopSite 7.1 Helps You Build It Better
ShopSite has long offered an accessible e-commerce service for small busines owners who want to develop and publish Web-based catalogs without speaking HTML.
It also offers greater depth for Web site designers who want to create more sophisticated online stores. In its latest version, 7.1, it adds support for gift certificates and additional payment gateways, XML upload capabilities and intrusion detection — all of which make a first-rate product even better.

At its core, ShopSite allows you to set up a professional-looking online store through a Web-browser interface. You can use the program to build a site from scratch, or add ShipSite's shopping cart feature to an existing Web site. After building a site, you can use ShopSite to accept credit cards through major payment gateways and manage the store through a Web browser.

The system offers support for two new payment gateways: WorldPay, which is used by many international customers, and YourPaySM. These gateways augment the existing payment options, which include VeriSign's PayFlow Pro, Authorize.Net, Cardservice International, eBay's PayPal's IPN (Instant Payment Notification) and Paymentech Orbital Gateway.
Building Online Catalogs:
ShopSite works through a Web browser and doesn't require you to download or install programs on your desktop to create and manage a ShopSite store.

ShopSite actually consists of three products:
ShopSite Starter, ShopSite Manager and ShopSite Pro.

> ShopSite Starter is for merchants that have relatively few products to sell and are getting their feet wet in online sales.

> The more powerful ShopSite Manager supports an unlimited number of products and pages, can send e-mail receipts, offers custom templates, data upload and download features, and can calculate shipping costs and taxes based on zip code.

>ShopSite Pro allows stores to work with coupons, gift certificates, volume and other discounts and affiliate sales. It also offers sophisticated product searches, can alert businesses to low stock situations, and edit product prices and other parameters based on percentages.

Moving Product Data Online
If you have existing product database, you can upload inventory as tab-delimited text files and the program provides good options for matching database fields with those in its catalogs. Pictures, however, aren't as easy to manage because ShopSite can't modify image sizes or depths. You have to edit images offline, using an image editor such as Adobe PhotoShop. You can see how they look only after you've uploaded and published the picture in your online catalog.

IT Project Organisation's Policy

Once upon a time, I had opportunity to work with Private Bank's IT department. IT Head was asked to finalise and submit policy for it's project organisation. He asked me to brainstorm the same at near coffee bar in Mumbai.

We discussed lot about challenges, opportunity and weakness of this IT Organisation. Resuffled the agenda for next one year on paper napkins... Coffee went pouring all evening and all ended with snip of dinner at 9 and PAPER NAPKIN with draft of policy.

1: IT Members (Insource or Outsourced) without project work for any measurable period are a waste of money and are not to be tolerated.
2: The organization's project load is determined by factors external to the IT organization and is allowed to exceed the throughput rate of the organization. (Beware IT Companies :>))
3: All active projects must be controllable becuase it can be measured with organisation wide published Metrics.

On car ride to home, he asked me about my view on future of IT Organisations within the bank and what the future lies for young leds who have joined. What can be done to keep them always ON? what the career prospectives and postions they can look upon?

It put me in quandary for moment but, then I decided to sum up before I close the long day with refeshing remark based on my experience.

1. Multi Tasking > Each IT deperatment member has been tuned to work in multi project enviornemnt. Some are in production with AMO (Applicaiton Maintenance and Operations) mode and others are in technial evaluation or sanction mode.

2. Full Cycle and Ownership >Each project starts with selection of technology and business case and ends with business sign off after successful testing by business users. What is advocated is the same to be managed and maintained... Let it be single Hardware box purchase to multi million software system development.

3. Continous Improvement and Feedback:Each IT guy is as close to IT user for feedback and improvement look like Supply chain model of interaction by both :>) ( They quarrel but keep the peace making process also going ON).

Other advantages like gain business domain expertise etc. are dividends one can look at.
To remain updated on other side of the story please subsrcribe at TOUCHPOINTs.

Small business use website much better then large ones

SMBs reports that, their Web Sites are Good for Business
Whether it's to transact sales or generate leads, small businesses are relying on their Web sites more than ever, according to a survey of 530 small business owners conducted by hosting and e-commerce services provider Interland.

The Fall 2004 Business Barometer of Online Activities was conducted during October and solicited opinions from a national sample of business owners, presidents and general managers of organizations with 500 or fewer employees, according to Interland spokesman Mike Neumeier.

Most of the respondents definitely fit the profile of a true small business. Interland reports that of the 530 participants, 86 percent report less than $1 million in annual sales and 81 percent of respondents reported having five or fewer full-time employees.

Seventy-seven percent reported that their business is healthier, more competitive and has better economic footing thanks to their Web site. More than half (55 percent) say having a Web site has helped through recent economic slumps. On the more tangible side, 81 percent say their Web site generates leads. "The killer application that this group is now turning to is online marketing tools and services that help them generate leads and convert those leads into sales," Neumeier said.

And based on the results of the Interland study, those leads translate into sales. When the group was asked to quantify the revenue generated by their Weh sites in 2004, 28 percent reported that 26 to 100 percent came through online sales and 22 percent said between 11 and 25 percent of their revenues came from online buyers.

In the practice-what-you-preach category, 85 percent of small businesses involved with online sales themselves purchase business products and services they need online. The most popular categories include the following:

1. Office supplies (76 percent)
2. Software (60 percent)
3. Travel (50 percent)
4. Computer hardware (50 percent)
5. Web-hosting/Web-site services (41 percent)
6. Broadband/Internet access (37 percent), print and online publications (36 percent)
7. Advertising/marketing placements (22 percent)
8. Telephony services (17 percent)
9. Data/databases (16 percent)
10. Technical support (15 percent)
11. Professional services such as accounting, marketing and legal services (9 percent).

Hooray for Holidays
A large majority of small businesses surveyed expect these to be happy holidays. Eighty-seven percent say they expect online sales during the 2004 holiday season will be as good if not better than last year's.

Thirty-four percent of survey respondents said they will prepare for the 2004 holiday shopping season by offering special holiday-shopping promotions, 32 percent report they will engage in direct-marketing efforts and 32 percent say they will increase the number of items or services they sell. Interestingly, plans to increase online advertising were virtually the same as plans to increase offline advertising, coming in at 29 and 28 percent respectivley.

How To Be A Mind Reader

Accurately interpreting the meanings of nonverbal communications, especially facial expressions, can make CIOs more effective leaders and managers, says Paul Ekman, noted psychologist and author of Emotions Revealed: Recognizing Faces and Feelings to Improve Communication and Emotional Life.
Reading facial expressions is a particularly useful skill for business executives because, so often in business settings, people don't say what they really think. If CIOs could recognize how different emotions manifest themselves on the face, they'd be able to discern much more quickly, for example, when an individual is starting to get angry. They'd also be able to identify when people are trying to conceal their emotions—such as fear, contempt, disgust or surprise. This knowledge and ability can make CIOs more aware of unspoken political tensions in board or executive committee meetings. It also better equips them to handle sensitive staffing situations such as performance reviews. Ekman points to research indicating that managers who seem responsive to the unspoken emotions of their staffs are more successful in the workplace than managers who don't.

To find out how good you are at interpreting facial expressions, try our quizzes, "How Well Can You Read a Face?". (The quiz online is tougher and more scientific, partly because it gives the reader a very short time to read an expression, just as in real life.) If you want to know whether or not the smile the CEO is giving you is sincere or whether the CFO is contemptuous of you when you make a proposal, keep reading.

WINCOR Shining bright out of SIEMENS Black Shadow

PADERBORN, Germany — Wincor Nixdorf AG has beaten its financial forecasts, closing its fiscal year ended Sept. 30, 2004 with record figures.

According to a news release, group operating profit (EBITA) increased 12 percent to 116 million euros (U.S. $156 million), up from 104 million euros (U.S. $139.6 million) in the previous fiscal year. Net sales were up 9 percent, to 1.6 billion euros (U.S. $2 billion). After adjusting out the effect of exchange rate fluctuations between the euro and the U.S. dollar, net sales actually rose by 12 percent, according to the release.

Profit before interest, tax, depreciation and amortization (EBITDA) rose 13 percent to 143 million euros (U.S. $192 million). Final net profit for the year grew to 44 million euros (U.S. $59 million), from 14 million euros (U.S. $18.8 million) a year earlier.

The large increase was due largely to the disappearance of scheduled goodwill amortization, resulting from the company's separation from the Siemens Group in 1999. The more comparable profit figure, after adjusting out effects of the Siemens separation, is a 17 percent increase in net income in the most recent fiscal year, to 61 million euros (U.S. $82 million) from 52 million euros (U.S. $69.8 million).

Karl-Heinz Stiller, Wincor's president and chief executive, said, "The figures for the fiscal year just ended provide the best evidence that we are on the right course with our market strategy and that we're capable of opening up new areas of growth."

Wall Street - NCR Script All time High

The Dayton-based technology company's stock price has shot up about one-third in the past three months, and Dec. 1, NCR announced it was going to split its stock in half in January.

So far this year, the stock price is up 60 percent and continues to set not just 52-week highs, but all-time highs. With recent trading ranges around $60, it's getting harder to remember when the stock stood at less than $18 in early 2003.

"I think the market is starting to realize there's a lot of earnings potential that the company has yet to unlock," said Matt Summerville, an analyst with KeyBanc Capital Markets in Cleveland.

Analysts said Mark Hurd, who became chief executive officer in early 2003, has become popular with investors after delivering seven straight quarters of estimates-beating numbers and is now showing the company's sales might be on the road to recovery.

Since taking over, Hurd has exploded profitability by shedding costs through employee layoffs, selling buildings and several other initiatives that have shed tens of millions of dollars in costs from the company. In recent quarters, he has been able to manage sales growth after years of flat or falling revenue at the company that provides data-warehousing services through its Teradata division and also sells automated teller machines and retail scanners.

In the third quarter, the company tripled its profit, beating estimates of 40 cents per share by 6 cents. The company also said revenue increased 7 percent, which showed that sales are turning the corner.

The consensus estimate of analysts is for NCR to earn $2.28 per share in 2005 compared with an expected $1.52 per share for 2004. They also expect sales to rise to $6.14 billion in 2005 from an expected $5.87 billion in 2004. Sales were $5.6 billion in 2003.

Summerville said sales could improve as NCR continues to exit old businesses that were left over from 1990s-era contracts in its customer services division. These included service contracts for equipment made by other equipment providers. These kinds of growth numbers are grabbing attention on Wall Street, as the stock performance indicates. But NCR also is trying to sell itself a little better as well.

NCR was scheduled to meet Dec. 2 with analysts in New York to tell its story to the people who can move the stock price even higher. Summerville pointed out this is the first such meeting for NCR in more than three years, but it might not have been the best idea until now, after the company had addressed many of its problems.

Merrill Lynch analysts Richard Farmer and Steve Milunovich said in a research note written in late October, when the price was at about $54, that the stock price could shoot to $65 per share.

"We continue to believe the Street underestimates NCR's earnings leverage on even modest growth in Teradata and ATMs, both of which delivered double-digit sales growth," the analysts said in the note.

Metavante renews TNS contract

RESTON, Va. — Metavante Corp., a leading banking and payments technology solutions provider, has renewed its agreement with TNS Inc. (NYSE:TNS) to be the primary transaction network provider for Metavante’s dial ATM traffic in the United States, according to a news release.

In addition, TNS will provide "always-on" connectivity through TNS' persistent-dial private network for telecommunications solutions. Metavante is the financial technology subsidiary of Marshall & Ilsley Corp.

"TNS truly understands our business approach," said Bruce Hopkins, senior vice president, Metavante Payment Solutions Group, in the release. "We know we can rely on the TNS network to continue to deliver a robust, seamless solution, which adds value to the services we provide our customers."

"This agreement represents Metavante's ongoing confidence in TNS to deliver critical ATM solutions," said Larry Crompton, senior vice president and general manager of TNS' POS Division, in the release. "We are very pleased to be broadening the scope of our relationship to provide 'always-on' telecommunications solutions to meet the growing bandwidth requirements of Metavante's customers."

More details visit TNSI site.

ISO looks at Drive-ups to win FIs' ATM business

Most bank branches have at least one drive-up ATM; the exterior machines typically see the heaviest customer usage. Some financial institutions, especially smaller ones, are showing an increased interest in off-site drive-ups.

ISO business has picked up in the past 6 to 8 months as more FIs facing Triple DES upgrade costs decide to turn over the operation of at least some of their ATMs to a third party like Momentum. Because drive-ups tend to be among the most expensive deployments, FIs are particularly interested in outsourcing them, he said.

Momentum typically replaces existing ATMs with Triple DES-compliant new machines or, if ATMs have already been upgraded, purchases them from an FI at book value. In those cases, Walston said, Momentum may replace them with more cost effective hardware. In either case Momentum owns the machines, although they carry the FI's brand.

In addition to its brand, the FI also generally provides vault cash for the machines. Momentum sometimes -- though not always -- splits transaction revenues with the FI.

Momentum evaluates telecommunications and other expenses. Depending on transaction volumes and existing infrastructure, Walston said Momentum uses dial-up, CDMA or TCP/IP.

The ISO has worked with enclosure manufacturers like DASH ATM, which provide enclosures that cost about a third less than those produced by more traditional players.

"In the past, financial institutions may not have considered products made by companies other than their usual vendors. They haven't shopped around," Walston said. "We always try to match the right ATM with the right communications in the right environment."

Mike Adams, a partner with DASH, said his business has taken off as more FIs outsource ATMs to third parties like Momentum or buy their own machines manufactured by companies like Tidel and Triton, which are making a major push to enter the banking market. Tidel, Triton and Tranax, as well as newer companies like Qualtex, have all introduced at least one new model designed to appeal to FIs in the past 18 months.

"We didn't have much demand for enclosures for NCRs or Diebolds," Adams said. "Many of those units have a Level 2 or Level 3 vault, and don't need a secure enclosure."

In contrast, Adams said, newer models produced by retail-oriented manufacturers typically feature either a UL 291 business hours safe or Level 1 vault. DASH works with a steel fabricator that also produces safes, Adams said, to essentially "knock out the back of a safe and turn it into a highly secure enclosure."

Retail-oriented manufacturers are responding quickly to FIs' needs, Adams said. Tidel, for instance, recently produced a new version of its 3700 ATM, the 3700d, which is more similar in height to popular drive-up models like NCR's Personas 90 and Diebold's 1074ix.

Many FIs prefer these "low profile" units, Adams said, because they enhance viewing lines for tellers inside a branch, permitting them to keep a close eye on exterior activity.

Tidel's 3700 and 3700d models are equipped with the popular Fujitsu 510 dispenser, which has a capacity of up to 3,000 notes. FI-friendly features such as lead-through lights and stainless steel surround and keys are standard features rather than optional upgrades, said Mark Levenick, Tidel's president and chief executive officer.

Momentum's Walston predicts continued growth in outsourcing business for ISOs -- especially for the larger, well-capitalized companies he said FIs prefer as partners. The sales cycle is also much longer than for most retail clients, he said -- and not all ISOs will want to take the extra time to woo FIs.

"ATMs are our core competency, so we do everything we can to drive profit," he said. "For most financial institutions, ATMs are only a small piece of what they do, and they've ended up being a cost center for them rather than a profit center."