NEEDHAM, Mass., June 12 /PRNewswire/ -- Supply chain finance (SCF) has been widely cited as a method to help wring inefficiencies out of the financial aspects of the supply chain. However new research from TowerGroup asserts that there is a lack of clarity and understanding across the wholesale banking industry relative to how the term is used.
Supply chain finance as it is discussed today covers multiple solutions, processes, and technologies with little apparent consistency and frequent confusion with similar sounding, but different concepts. TowerGroup notes that this has caused confusion among bank representatives and technology providers, many of whom seem to use the term interchangeably with what might be better described as the "financial supply chain."
TowerGroup defines SCF as a category of solutions designed to provide working capital financing and accelerated cash inflow to suppliers, on the basis of the value of commercial transactions occurring along the supply chain. Although numerous variations exist in the market place today, a typical SCF process flow may be downloaded and viewed at: http://www.towergroup.com/research/content/page.jsp?pageId=1522.</p>
To provide true benefit to all parties involved in the supply chain, TowerGroup believes SCF models must include the following foundational components:
-- Electronic Invoice Presentment and Payment (EIPP)
-- Shared visibility of supply chain events through a portal
-- Availability of multiple funding and payment options
-- Integration with ERP systems
The recent growth in both the availability and adoption of SCF solutions has been driven by such factors as globalization, technology, the evolution of supply chain management as a discipline, and the banking industry's search for new sources of revenue. TowerGroup expects that the combination of these drivers will result in further penetration of supply chain finance among buyers and sellers, as well as among the financial institutions that provide working capital to support them.
The TowerGroup report titled, "So You Think You Understand Supply Chain Finance: A Primer on Innovative Working Capital Financing" by Susan Feinberg, research director in the Wholesale Banking research service at TowerGroup, describes the predecessor to the new set of SCF solutions, and identifies the benefits of SCF to each party involved. The report also examines the barriers to adoption of SCF solutions as well as the implications of supply chain finance for financial services institutions and technology providers.
The report is available to qualified members of the press for review. To request a copy or to arrange an interview with Ms. Feinberg, please contact Jorge Lavina at +1.212.455.8041 or jlavina@cooperkatz.com. At TowerGroup, Feinberg examines the strategic role and influence of technology in the global delivery of banking services to corporate, small business, and institutional customers.
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About TowerGroup: TowerGroup is the leading research and advisory services firm focused exclusively on the financial services industry. A respected source for trusted information and advice, TowerGroup brings many of the world's leading financial institutions, technology companies, and professional services firms a deeper understanding of the business and technology issues impacting their organizations. Headquartered near Boston in Needham, Massachusetts, and with offices in North America and Europe, TowerGroup serves a global client base. Visit http://www.towergroup.com/ for more information.
TowerGroup
CONTACT: Jorge Lavina of TowerGroup, +1-212-455-8041,
jlavina@cooperkatz.com
Web site: http://www.towergroup.com/
