Webinar presentation simplified interline settlement (sis) - airline preparedness survey wave ii
Simplified Interline Settlement A fundamental change…
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Transcript of Simplified Interline Settlement A fundamental change…
Simplified Interline Settlement A fundamental change…
Nicholas CooteProject Sponsor
KUL – 20-22 Oct 20102010 ICH UG Meeting 2
SIS is the project…. Board of Governors,
IATA Top management
IATA people and money
IATA StB mobilisation
Workshops at IATA regional offices
KUL – 20-22 Oct 20102010 ICH UG Meeting 3
Why SIS is important?
Hitting the core of the process: paper
Changing the way industry works
KUL – 20-22 Oct 20102010 ICH UG Meeting 4
Any organization, not only airlines
KUL – 20-22 Oct 20102010 ICH UG Meeting 5
Not just an IT project Business re-engineering
Re-think global processes
KUL – 20-22 Oct 20102010 ICH UG Meeting 6
Spread the message in your organization
Service providers
Invoice creators
Finance team
Treasury
KUL – 20-22 Oct 20102010 ICH UG Meeting 7
Big, industry wide, global IATA: $millions, 4 years, 20 people
400 Airlines
80 industry suppliers
+5,000 people
$ +700 m SAVINGS
KUL – 20-22 Oct 20102010 ICH UG Meeting 8
SIS Vision
Invoices are electronic and not backed by paper Prime passenger billings do not require paper invoices or coupon
listings Rejects, including any attachments, are submitted electronically
without paper Cargo and Mail billings are electronic and paperless Miscellaneous billings (including any supporting information) are
electronic, whether as data or with attachments IDEC concept maintained as IS-IDEC but with extended record
lengths and new types Settlement action directly from ET systems is enabled – Auto-billing
Fundamentally change, simplify and integrate the interline settlement process, delivering tangible financial benefits to the
industry.
KUL – 20-22 Oct 20102010 ICH UG Meeting 10
Think about your IS Implementation You’ll save money by
replacing today’s processes with IS
But the greatest potential of IS comes from completely rethinking your processes (especially in Misc)
Going forward, you should think about IS holistically
KUL – 20-22 Oct 20102010 ICH UG Meeting 11
Important aspects to think about There is substantial business re-engineering to be done at the
outset, as invoicing is often originated from many sources Person in charge of invoice not usually from the business end,
unlike Revenue Accounting. This is an extra challenge The structure of invoices needs to be changed in order to
invoice electronically and enable compliance with IS-XML standards
Legal and financial management aspects of e-invoicing The concept of Charge Category and Charge Code
Remember: more than 80, each with their own mandatory field contents
There are major changes to UATP processing
KUL – 20-22 Oct 20102010 ICH UG Meeting 12
Miscellaneous billings Misc billing is subject to the biggest changes of all
No data standards currently in use – no IDEC equivalent Huge variations in invoices compared to passenger and cargo Over 80 business types have been identified and encoded in the
design
IS-XML serves the same purpose as IS-IDEC, but designed to work in conjunction with financial systems
Revenue Accounting Manual chapter A13 has been rewritten, and has gone from 5 pages to nearly 100 pages
KUL – 20-22 Oct 20102010 ICH UG Meeting 13
Principles of the Charging Model Cover costs – SIS will be run as a revenue-neutral
service – which means no profits but also no losses Fair and transparent to the end users – possible for IS
users to calculate costs in advance; no surprises Flattening cost curve – The largest members put far
more than ten thousand times the number of invoices through SIS than the smallest; their SIS fees cannot be proportional
KUL – 20-22 Oct 20102010 ICH UG Meeting 14
SIS Fee ComponentsComponent ICH Member
ICH Web Fees Same as today($1,500 annually)
ICH Web/SIS Migration SurchargeDeclines over time as Transaction Fees build up
Dependent on type of member and # of invoices processed($4,000 – $22,000 annually)
IS Annual FeeAlternative to the ICH Web/SIS Migration Surcharge
Dependent on type of member($1,000 - $4,500 annually)
Transaction Fees(Invoice, Coupon, AWB, supporting document kb, etc.)
Per transaction dependent on previous years history.Additional 25% if entered through the IS-Web
KUL – 20-22 Oct 20102010 ICH UG Meeting 15
After SIS go-live Before you sign-up
After you sign-up Before full migration
After full migration* Through eternity
ICH-WEB Fee ICH-WEB Fee
SIS Migration Surcharge SIS Migration Surcharge
Transaction Fees Transaction Fees
IS Annual Fee
SIS Fee Timing
* “Full migration” means that you no longer submit claims outside of SIS (via the ICH-WEB)
KUL – 20-22 Oct 20102010 ICH UG Meeting 16
The timer is running SIS goes live in less than a year Initial feedback is that 25-50% of members
will migrate in 2011 itself That means that members doing business
with them also have to be prepared
KUL – 20-22 Oct 20102010 ICH UG Meeting 17
Don’t forget… Your SIS billings are standardised for both ICH and
bilateral settlements Means that once migrated you can use SIS to bill any airline,
whether or not they will settle through ICH
Standardisation reduces costs and expands opportunities – look for the benefits
KUL – 20-22 Oct 20102010 ICH UG Meeting 18
Thank you.
Email:[email protected]
SIS Website:www. t .oria a g.s si