At the Annual Conference in Vancouver 2014, the council approved the instalment of a SCF Committee with the aim to investigate the possibilities for an introduction of SCF to the FCI member base. This mandate was further confirmed at the Annual Conference in Singapore 2015. Next to the further enhancement of the existing EDI-factoring system for the use of members who already have an existing SCF solution in place or only need occasional support from other members, there is a need to setup a SCF platform that can serve the needs of all FCI members. With the experience of FCI in dealing with members from 90+ countries and meeting their local laws, FCI has reason to believe that offering a truly international SCF solution should be based upon local resources with local knowledge (legal and compliance).
Phase I: RFI
Over the last couple of years, the number of SCF providers has grown substantially, with different focus areas for each of the solution providers. In order to gain insights into the applicability of each of the SCF solution providers to the situation of FCI, a RFI process was launched in collaboration with Capital Chains. The goal was to support FCI in their decision making process by:
- Providing FCI with an overview of solutions available in the market today.
- Providing FCI with best practices from the market
- Providing FCI with a roadmap to be presented at the Annual Meeting in Cape Town (23-28 October 2016)
FCI was seeking to receive proposals from SCF providers describing how their solution can support FCI’s goal to offer their member base a competitive advantage in the SCF market space. The expectation was that Tenderers would focus their proposal on the twofold nature of the proposed offering: a 3-corner SCF model for domestic business as well as a 4-corner model for international SCF.
Together with the SCF Committee and by reaching out to FCI members, all potential SCF Solution Providers were allowed to join this RFI process. Out of all the invited SCF Solution Providers, ten ultimately decided to participate in this RFI process. For those that decided not to participate the reasons were mainly in the scope of the foreseeable agreement: direct competition between a FCI offering and their own offering to corporates directly or a focus on different developments in their financial supply chain management offering.
The SCF Solution Provider of choice has the potential of servicing 400+ members across the globe and hence there was a need to find a reliable, financially stable, experienced and reputable partner that will grow with FCI and above all else, will not put the reputation of FCI at risk. All of the SCF solution providers that participated in the RFI were scored based on ten categories which in turn incorporated the above three overall qualifications.
FCI Annual Meeting in Cape Town 2016
During the annual meeting in Cape Town members were asked to vote on the progress made by the SCF Committee. A vast majority of the FCI members voted in favour of the selection process for a SCF Solution Provider which ensured that Phase II could be started.
Phase II: RFP
The RFI process resulted in a shortlist of SCF Solution Providers which was presented to the members at the Annual Conference in Cape Town. The council approved the continuation of the project with a majority vote and mandated the SCF Committee to move forward with their investigation for the best suitable partner for FCI.
At the Annual Conference in Lima (starting June 11, 2017) the SCF Committee targeted to be able to propose a final candidate to the council. For this, the next phased was launched together with Capital Chains in the Netherlands. The goal of this phase was to:
- Providing FCI with a final candidate (SCF Solution Provider of choice)
- Providing FCI with a clear investment decision
- Align FCI Committees to ensure a swift roll-out after approval at the Annual Conference in Lima (12-16 June 2017)
FCI was again seeking to receive proposals from SCF providers describing how their solution could support FCI’s goal to offer their member base a competitive advantage in the SCF market space. This time however, more focus was put on the usability of the platform and the strategic fit to what FCI was envisioning to offer to their members: a platform only capable of offering 3 and 4 corner SCF capabilities, not a replacement for their standard factoring business.
The SCF solution providers that were invited to participate in the RFP were scored based on the same ten categories as during the RFP plus the added evaluation of the provided full demo to the members of the SCF Committee.
FCI Annual Meeting in Lima 2017
During the annual meeting in Lima members were asked to vote on the final selection of the SCF Solution Provider of choice. With a majority vote on the continuation and the implementation with FCI Pilot members, the now rebranded FCIreverse solution (on the Demica platform) will see the light of day in the coming months.
Capital Chains is proud to have been the lead consultant on this important project for FCI, supporting a solid analysis of the SCF solution provider market and ultimately choosing a solution that provides FCI members with easier access to SCF technology. This is expected to result in more SME targeted SCF programs by the FCI members in the near future, which fully aligns with our goal to create value for all participants in a supply chain and its eco-system.