Next Big Thing CEO Interviews Video

Watch our video to discover how Direct Insite can improve your business with our cloud-based solutions.

 

Video Transcript

Smith: Tobin Smith with the next big thing. Cloud computing is a big part of our practice and our research business. I’m here with Matt Oakes from Direct Insite Corporation, who actually is a cloud vendor, but you aren’t doing the commoditized stuff, you guys focus on the account payable. Tell us how your model works because it’s pretty interesting.

Oakes: We sell into basically global 3000 companies.  Have large shared services organizations, big AP departments, 50 desks, huge stacks of paper, Hewlett Packard, Siemens Corporation.

Smith: Alright so I’ve heard of those.

Oakes: Big AP departments, lots of paper, lot of phone calls, a lot of emails trying to resolve issues and we really start and say this is a green initiative, lets eliminate the paper, let eliminate all the errors, lets eliminate everything that is human touch and lets automate it. So we’re an automation play.

Oakes: So really where this play comes into, a large company like Siemens will come in and say I have a large shared services organization, I have 26 different operating companies, despaired financial systems a lot of differed ERPS, Oracle, SAP, and we come in and say we integrate with all of it, we take all your paper, it goes through one portal, we register your vendors, your vendors submit through us, it goes into your ERP.

Smith: Ahh so perhaps part of the secret sauce here is that, you sign up these vendors it could be “Joe six pack”  it could be a large company.

Oakes: Yes.

Smith: So if I’m a smaller company and I’ve submitted a bill to Siemens or Shell etc. Is there an advantage for me to be on your platform? In terms of me getting paid?

Oakes: Yeah, I think there is a real advantage because you now know, you are not just mailing in the invoice and then hoping upon hope that it gets there or that it gets through the process.  You’re looking at-Do I get this thing in? Do I get a notification when it’s been submitted and accepted? Do I know how long before it’s going to be approved? Is it partially approved? Fully approved? When do I get my money? That’s what they want to know. It’s a cash flow issue both for the vendor and for the payer, the company.

Smith: Can you have some of my clients? I’d really love to do that. We send up smoke signals and we just hope there... and I send that pit bull of a wife of mine out to collect the money. That’s what you don’t want to do.

Oakes:  No.

Smith: Alright, so I understand that so the growth of this business you do about 1 million dollars inventile last year, you’ve grown about 15%

Oakes: 15-20%

Smith: Alright, and that new growth comes from what, adding new OEM people or adding new vendors?

Oakes: Two different plays, number one you have to sell into the new customers so only 40% of the fortune 500 has a system like this, most everybody still does paper.

Smith: That’s insane

Oakes: Which is amazing, yeah. The real play is you sell in, you get 15% there, and then the sell through because we’re constantly evolving the software, developing new automation modules that increase the efficiencies in places we already are.

Smith: So you are a recovering lawyer so I don’t expect you to know all this stuff, but technologically are you, you are pure cloud, so you’re operating and so when I sign up with you I don’t pay you a license fee.

Oakes: No.

Smith: I pay you per transaction.

Oakes: You’re really outsourcing this and it’s a big outsource play you’re going to have an organization where you say okay here we come, send me your paper, and then what you’re going to do, you’re going to pay me a transaction fee, we’re going to come in do the integration and the boarding. We’re going to host it and during this entire process, and then we really update you we provide you, the company, the dashboards so you understand what your vendors are doing, and what the timing is. So there is a business intelligence, almost spend management piece of this that’s coming, so I see the business evolving as our network grows, business intelligence, spend management, and then obviously the ability to go ahead and help with the financing pieces of this.

Smith: It doesn’t matter whether I’m on SAP, or I’m on oracle

Oakes: JD Edwards or Lawson, no it doesn’t matter, ERP agnostic.

Smith: So you plug it in, I assume for the person like me who submitted a bill to Siemens, it’s much better that I understand that now, if I’m the guy who is the small guy and Siemen said well they’re going to pay me in 28 days or something is there a way for you to finance? Is there opportunity for you guys to help those smaller guys?

Oakes: Yeah the play here is, it’s a twofold play, it’s a benefit for the company.  The company can go ahead and have dynamic discounting or discount terms in there and say I’m going to pay this vendor right away or the vendor has the ability to say, you know hey I can’t wait 45 or what’s soon going to be 60 or 75 days as they stretch there DPO and that vendor can say boom pay me now. Right, I think the key is it’s almost like an easy button pay me now and then you’re going to take a little discount or haircut on that invoice.

Smith: I have payroll today, I would like to be paid now.

Oakes: Right exactly, so I think that’s a play.

Smith: So Insite, and the idea here is that if you can automate and systematize accounts payable and make it painless to the company using it and a lot less painful for the vendor, that’s a win-win. Maybe the upside here is that if you have all this data then you are able to underwrite these companies, be able to say, listen I’ll finance this for 98% of the value today and all of a sudden you have a financing play into it and now you’ve become an integrated provider

Oakes: Think about it and I think the next step of the next gen, is that large companies are trying to grow, trying to grow efficiently. They are not trying to add more people, more resources, they are trying to implement tools, they are trying to become more efficient they are trying to automate. So I think this dub tails into if you look at these organizations they’ve got the operational stuff fixed now they are trying to figure out how to I make the back office more efficient. We are a pure play in that regard and we step in and we really manage that process and take you to the next level.

Smith: If you are an Accounts Payable professional, you are not going to like this guy. Anyways, sometimes the next big thing is just making stuff that works dumb, work smart and that’s the business they are in.

Thanks.

 

About Us