Killer Apps – Straight Talk with Traxpay’s John Bruggeman (Part 4)

Picking up where we left off in our interview with Traxpay’s John Bruggeman, we come to the potential “killer apps” for dynamic payments and also consider the changes in efficiency that will come as cash moves through the supply chain more efficiency. See also our first, second and third installments in this series as well. Enjoy!


JASON: What are the killer apps (general) for dynamic payments as you see them?

JOHN: The first is factoring – no question about it. The reason I say this is that it solves a very real problem so that it’s easy to quantify and get adoption. There are a lot of financiers available that want to make dollars available today in this area. The barriers to engage are low. Yet technologies are not available to solve this problem completely, which is why it’s an expensive and often paper-driven process for suppliers (and still risky for lenders in certain cases). I believe dynamic payments can make these factoring applications work with considerably less friction, at a lower cost and with much greater adoption – and lower risk for lenders.

JASON: Give me some scenarios (specific) about how this could change how cash flows through the supply chain?

JOHN: Now I’m going to get really brazen. I think that what we’ve talked about so far is pretty tactical. We can automate the basics – factoring, supplier networks, discounting for early payments, etc.

These are all valuable but are truly “dumb” applications that rely on sets of currently available data (e.g., invoice approval information) that can help facilitate or provide insight into a transaction. There is not a ton of intelligence that goes into these decisions, approvals and routing in the truest sense. As a buyer, lender or provider, I can determine qualification. I can give you (as a supplier) the choice to participate. Then I can execute the program. No doubt, some people will get pretty sophisticated with these types of programs.

But think about this as a foundation. What is going to happen next is that we will be collecting a ton of data as these transactions scale. And it’s a new type of data we’ve never gotten before. We’ll know which suppliers accept what types of programs, and how quickly (or not) – and when. We’ll see what behavioral changes in the supply chain live, as they unfold.

Then imagine the next step – putting analytics on top of these massive datasets and the metadata associated with transactional flow. No one has thought through what big data means in this regard. And no one is talking about analytics in the sense that we are starting to think about it based on the transactional exhaust.

Leaders are going run with it. They will have a strategic plan to get more out of it – favorable terms, better delivery, etc. Then they’ll tie the data and insight back to their own decision support systems – commodity management, customer credit, supply chain planning. They’ll drive this to the supply chain and change how they do business with third parties. For example, I can, on the fly, determine how I want to exchange or change terms on a contract based on past behaviors and performance.

Imagine the real time setting of terms based on real time behaviors. Now all of a sudden the CFO is truly strategic. Think about it – surge pricing, surge terms. Think Uber meets B2B. That guy (or gal) who can, in real time, dynamically optimize supplier relationships and terms has tremendous power and brings tremendous value to organization. Think of this power in comparison to sales, R&D and marketing. Now the CFO (and CPO/VP supply chain) walk into management meetings and show how they can improve production costs by XYZ percentage by tweaking, turning and moving dials in the supply chain because they dynamically control the compensation and cash flow to different participants.

That’s power.

Stay tuned as our interview series with John Bruggeman concludes.

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