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Introduction to SIS Simplified Interline Settlement RA42 Miami – 9 September 2008 Nicholas Coote Director, Industry Clearing Services Introduction This presentation was published in Sept 2009. See SIS website for updates. The Simplified Interline Settlement (SIS) project aims to simplify interline billing, and remove paper from the entire process, delivering tangible financial benefits to the industry. Upon endorsement by the IATA Board of Governors, use of the Integrated Settlement solution will be required for carriers settling payments through the IATA Clearinghouse. The presentation of SIS this week is purely informational; there will be no related items put up for a vote. Simplified Interline Settlement – RA42 Plenary 2 16 July 2015 Today’s Goals To Understand: Today’s settlement processes and the vision for SIS SIS Phase 1 – The basis of the project SIS Phase 2 – Our progress this year, including project objectives and structure The basics of SIS’ solution: Integrated Settlement (IS) SIS Phase 3 – The future of the project Next Steps – SIS this week and through the Board of Governors meeting Simplified Interline Settlement – RA42 Plenary 3 16 July 2015 Interline Settlement Today Simplified Interline Settlement – RA42 Plenary 4 16 July 2015 Interline Settlement - Today Paper invoices, with coupon listing, coupons, rejects, supporting documents (monthly) Settlement sheets – (weekly) F3– (weekly) Billed Airline Cargo IDEC File (monthly) Pax IDEC File (monthly) prorate engine GDSs BSPs ACH ICH ATPCO (incl F&F pre IDEC Validation) F12 – (weekly) F1 – net amounts of inv F2 - summary Cargo IDEC File (monthly) Billing Airline Pax IDEC File (monthly) prorate engine ARC-Compass (NFP storage) AIA F&F Simplified Interline Settlement – RA42 Plenary Recap sheets - weekly 5 F&F: receives NFP value 16 July 2015 The need for SIS Interline billing & settlement process is highly paper-based Billing, supporting documents, rejects, re-bills, second rejects, sample forms, adjustment forms, reject correspondence, and lots more ICH was the same Forms 1, 2, Summary 2, and 3, but has been paperless since 2006 Prime billing for Passenger and Cargo was automated in the 1980s (IDEC), but progress was slow Since its mandatory use for IET, Passenger membership has accelerated, but the technology can’t cope and billings are out-ofsync with ICH Weekly settlement Weekly settlement has added to processing effort in airlines, and reconciliation problems have increased Simplified Interline Settlement – RA42 Plenary 6 16 July 2015 The SIS Project background Simplified Interline Settlement – RA42 Plenary 7 16 July 2015 SIS Phase 1 Overview Phase 1 Feasibility Phase 2 Requirements Development Phase 3 Implementation Summer 2007 1. RAWG carriers created a proposal for a paperless billing and rejection process 2. FinCom commissioned a feasibility study focusing on FIRST & FINAL™ and accelerated settlement which was conducted with input from RAWG, IATA, AIA, and key airlines This concept was found to be feasible after changes to ICH and AIA processes, with further evaluation and prioritization required Simplified Interline Settlement – RA42 Plenary 8 16 July 2015 SIS Phase 1 Overview Phase 1 Feasibility Phase 2 Requirements Development Phase 3 Implementation September 2007 Two papers presented at RA41, and joint breakout session covering the concepts held for all participants Papers and plans also shared with ACH and key ACH Member airlines Overwhelming support for concept of paperless interline billing at RA41 General support for an early migration Support from First & Final airlines and others for simplified billing and settlement processes Simplified Interline Settlement – RA42 Plenary 9 16 July 2015 SIS Vision Fundamentally change, simplify and integrate the interline settlement process, delivering tangible financial benefits to the industry. Invoices are electronic and not backed by paper Prime passenger billings do not require paper invoices or coupon listings Passenger 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 formats are maintained with increased record types Settlement action directly from ET systems is enabled Simplified Interline Settlement – RA42 Plenary 10 16 July 2015 SIS Phase 2 Overview Phase 1 Feasibility Phase 2 Requirements Development Phase 3 Implementation January 2008 – Phase 2 begins; long-term vision formed for entire project February – June – Five SIS Working Groups meet to examine the interlines settlement processes which need to be changed, prioritize those changes, and produce functional requirements. June Working Groups (except for E-Invoicing) finish meeting IATA creates the Business Solutions Design (BSD) with combined requirements as set by all Working Groups Simplified Interline Settlement – RA42 Plenary 11 16 July 2015 SIS Phase 2 Overview Phase 1 Feasibility Phase 2 Requirements Development Phase 3 Implementation July IATA creates Request For Information (RFI) and sends to potential vendors Communication campaign begun to inform carriers of SIS – website, webcasts, etc August – Business case with high-level plan is created from BSD and results of RFI responses from potential suppliers September 2008 – Presentations to RA42 and IATA Financial Committee Simplified Interline Settlement – RA42 Plenary 12 16 July 2015 Phase 2 Objectives The creation and co-ordination of Working Groups composed of airline experts to review and develop the specific requirements Obtaining appropriate industry buy-in and agreement Documentation of functional business requirements and an overall business solution design Developing an RFI with IATA Procurement based on the detailed and agreed design Managing the resulting responses such that a valid business solution design, high-level timeline and costing can be obtained Preparing a business case to support SIS Phase 3. Simplified Interline Settlement – RA42 Plenary 13 16 July 2015 Phase 2 Project Organization SIS - Project Executive Sponsors Tom Murphy, IATA Ayaz Hussain, IATA Project controlling Project content SIS - Steering Group IATA – Project Controller • • • • SIS - Project Coordinator James Shannon SIS Pax Billing WG Industry Expert Groups Members: AA, AF, BA, EK, IB, LH, LX, NZ, UA; ACH Gianna Monsch, aerwise consulting (SIS - Project Manager) Nick Coote, IATA (SIS - Project Sponsor) Terry Delaney, IATA (SIS - Project Sponsor & chair) SIS - Project Sponsors Nick Coote Terry Delaney SIS - Project Manager Gianna Monsch, aerwise SIS E-Cargo WG SIS IDEC WG SIS E-invoicing WG SIS Paperless Support WG (incl. AIA and non F&F carriers) • LX (chair) • AF, CO, DL, IB, IY, JL, LH, NZ, OS • IATA, aerwise Simplified Interline Settlement – RA42 Plenary • EK (chair) • AC, BA, CV, LH Cargo • IATA, aerwise • BA (chair) • AA, AF, LH, EK, KE, TP, VS • IATA, aerwise 14 • LH (chair) • BA, DL, EK, NW, RO • IATA, aerwise • UA (chair) • AS, BA, IY, NW, NZ, SQ • IATA, aerwise 16 July 2015 High-level Project Plan – SIS Phase 2 High-level Project Plan Jan 08 Feb 08 Mar 08 Apr 08 May 08 Jun 08 Jul 08 Aug 08 Sep 08 Project Management Project Mgmt & WG co-ordination Stakeholder & Communication Project updates (meetings/confcalls) Stage 1 – Set up Project Charter Review Project Set up Working Groups Airlines PM & IATA Stage 2 - Requirement Devel. Working Group requirements Create Stakeholder & Comm. Plan Review requirements & prioritization Business Solution Design document Steering Group Stage 3 – RFI Development RFI & Response evaluation WGs – review Business Solution Design and Prioritization Review Business Solution Design Business Case Stage 4 – Closure RA42 FinCom FinComClosure Project Project Closure Simplified Interline Settlement – RA42 Plenary 17 16 July 2015 Phase 2 SIS Deliverables Overview Pax Billing WG Paperless Support WG IDEC WG E-Cargo WG E-Invoicing WG Meeting Minutes Meeting Minutes Meeting Minutes Meeting Minutes Meeting Minutes Functional Requirements Functional Requirements Functional Requirements Business Case & High-level Timelines Business Solution Design RFI Business Solution Design Changes Responses RFI Simplified Interline Settlement – RA42 Plenary 18 16 July 2015 RFI process RFI developed with IATA procurement and sent out to a number of possible solution providers with the BSD Covered by a strict NDA – we can’t even say how many Structured in modules to segregate responses and costs Responses reviewed and analysed, and a series of Q&A sessions organised with providers Responses ranked against experience, structure and content of solution offered, IT infrastructure issues, etc Most suitable solution proposers have been advised they will be asked to respond to the RFP These include AIA, NiiT/Softec, Kale, Accelya, InvoiceWorks Responses will be used to build an industry-level business case for the Financial Committee Simplified Interline Settlement – RA42 Plenary 19 16 July 2015 Implementation & Operational Costs Expectation is that IATA will cover the set-up cost, and charging will be set to cover operating and investment costs We have a number of guidelines Needs to be related to volume Needs to be related to the services used Needs to be simple to understand Needs to be simple to administer and verify Is likely to include a combination of: Basic annual charge Some form of per-invoice charge Some form of per-item charge or data volume charge Proposals will be firmed up when we have contractual costs, and discussed with the Steering Group Simplified Interline Settlement – RA42 Plenary 20 16 July 2015 The SIS Solution Simplified Interline Settlement RA42 Miami – 9 September 2008 Gianna Monsch Project Manager Simplified Interline Settlement – RA42 Plenary 21 16 July 2015 SIS – General Overview Integrated Settlement Settlement Processes Billed Airline IS-IDEC Overall Processes IS-XML ICH “Digital Signature” Company Billing & Invoicing Processes Central Repository Processes at time of Sales ARC COMPASS™ Simplified Interline Settlement – RA42 Plenary IS-WEB ACH Overall Processes IS-WEB IS-XML IS-IDEC Usage File Billing Airline Prorate Engine NFP engine 22 16 July 2015 Key Benefits of IS – Billing Carrier Substantial savings due to: Reduction in paper, postage and courier fees Reduction in internal paper handling and supply chain efforts No more loss of supporting documents and re-creation of invoices Automation of billing directly from uplifts (e.g. Auto-Billing) Optional à la carte service of “Integrated Settlement” Simplified Interline Settlement – RA42 Plenary 25 16 July 2015 Key Benefits of IS – Billed Carrier Substantial savings due to: Reduction in internal paper handling and supply chain efforts (e.g. registration, and reconciliation of invoices to payment) Automated data Less manual intervention Data quality improvements on IS-IDEC Pax Rejection Memos, Billing and Credit Memo electronically Cargo Original AWB, Rejection and Charge Memo electronically Supporting Documents in electronic presentation Simplified Interline Settlement – RA42 Plenary 26 16 July 2015 Key Benefits of IS Rejection Memo & Correspondence process improvements due to: Enforcement of RAM rules (RM stage and correspondence) Opportunity to detect duplicate rejections of the same original billing All rejections and correspondence link to previous billings; information and supporting documents do not have to be re-uploaded Time-limit reduction possibilities for Rejection Memos and Correspondence Risk management and process improvements due to: Fewer items outstanding for a shorter period of time Future potential time-limit reduction for prime / original billings Benefits to the environment due to reduction of paper and shipping Alliance objectives complemented by SIS Simplified Interline Settlement – RA42 Plenary 27 16 July 2015 Airline Changes (where applicable) Change from IDEC to IS-IDEC 400 bytes instead of 160 bytes Follow rules in RAM Some detail records mandatory (e.g. taxes) Other elements mandatory (e.g. Source Code) Choose and implement other submission formats (ISXML, IS-WEB) Prepare to scan and upload supporting documents Implement e-billing (possible legal implications) Simplified Interline Settlement – RA42 Plenary 28 16 July 2015 Core & Non-Core Functionality Core functionality of SIS enables paperless billing and settlement. The non-core functionality is considered by the SIS Working Groups to be “value-added services”; its final inclusion is dependent upon implementation costs and airline demand and will likely be billed to carriers separately, based on usage. Non-core functionality includes (but is not limited to): Time of Sales Processes Some file formats for some processes Sampling-specific functionality for processes other than Provisional Billing and Rejections (basic Sampling functionality is “core”) Simplified Interline Settlement – RA42 Plenary 29 16 July 2015 Moving Forward Simplified Interline Settlement – RA42 Plenary 30 16 July 2015 SIS Phase 3 Proposed Overview Phase 1 Feasibility Phase 2 Requirements Development Phase 3 Implementation September 2008 (after FinCom) Phase 3 begins Revised Business Solutions Design (BSD) finalized Request For Proposal (RFP) sent to potential suppliers January 2009 – Supplier selection finalized February 2009 – Integrated Settlement implementation begins March 2010 – First carriers implement IS December 2011 – All carriers potentially mandated to implement IS Simplified Interline Settlement – RA42 Plenary 31 16 July 2015 Potential Timeline – SIS Phase 3 High-level Project Plan Oct 08 – Jan 09 Feb 09 Mar – May 09 Jun – Oct 09 Nov – Dec 09 Jan – Feb 10 Mar 2010 Apr 10 Sep 2011 Sep 2011 SIS – Phase 3a - RFP RFP & Response Evaluation Vendor Selection Vendor IATA Airlines Steering Group SIS Phase 3b - Implementation Project Set-up Project Set-up Design and Implementation Requirements finalization & review Development UAT – User Acceptance Tests Pilot run Go - Live First carriers (pilot carriers) All carriers Potential mandated implementation SIS SIS Phase 3c - Implementation Project Set-up Review Functionalities Project Set-up Simplified Interline Settlement – RA42 Plenary 32 16 July 2015 Carriers Planning High-level Project Plan Oct 08 – Jan 09 Feb 09 Mar – May 09 Jun – Oct 09 Nov – Dec 09 Jan – Feb 10 Mar 2010 Apr 10 Sep 2011 Sep 2011 Budget system changes Pilot Carriers (impl. January 2010) Carriers implementing 2010 Carriers implementing 2011 “Change Documentation” Receive Record Structures and Change Overview Implementation & Go Live Pilot run Go - Live First carriers (pilot carriers) All carriers Potential mandated implementation SIS Vendor IATA Airlines Steering Group Simplified Interline Settlement – RA42 Plenary 34 16 July 2015 Airline Budgeting & Migration Carriers implementing in 2010 (including RAWG, SG, WG carriers and others) must plan for system changes and/or operational costs from the 2009 budget-year onwards Carriers with own RA systems must budget for implementation and operational costs Carriers with third-party RA systems to consider operational costs and ensure that the system will be capable Migration (between March 2010 and September 2011) No “big-bang” Carriers can migrate in steps (Pax prime, Pax non-prime, Cargo, etc) over time Leads to parallel submissions through Integrated Settlement and F12 Possibility to remove paper invoices on a bilateral basis Simplified Interline Settlement – RA42 Plenary 35 16 July 2015 Next Steps – Sep to Dec 2008 RA annual meeting (September 08) - NOW Presentation and breakout sessions FinCom (September 08) They strongly support the initiative Board of Governors (December 08) They wish to see radical change They will be looking for initiatives that reduce operating costs, improve data quality, and help to meet environmental objectives Simplified Interline Settlement – RA42 Plenary 36 16 July 2015 SIS at RA42 Wednesday RA42 Breakout Sessions Passenger Prime Coupon Billings Passenger Non-Prime Coupon Billings Interfaces to IS (IS-IDEC, IS-XML, IS-WEB, etc) Cargo & Miscellaneous Billings Thursday Introduction to E-Invoicing & Legal Aspects of E-Invoicing Breakout Sessions Wrap-up Friday FIRST & FINAL™ with Integrated Settlement (presented at the 5th Annual FIRST & FINAL™ General Meeting) Simplified Interline Settlement – RA42 Plenary 37 16 July 2015 Q&A Detailed questions will be addressed in the breakout sessions Please ask questions about the project organisation and plan, benefits of IS, Phase 3, etc All presentations can be downloaded from the Revenue Accounting extranet. Simplified Interline Settlement – RA42 Plenary 38 16 July 2015 Thank you. Email: [email protected] SIS Website: www.iata.org/whatwedo/finance/clearing/sis/index.htm Simplified Interline Settlement – RA42 Plenary 39 16 July 2015