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2004 Citibank® Commercial Cards, Government Services
The Sixth Annual GSA SmartPay® ConferenceSHERATON CONFERENCE CENTER, NEW ORLEANS, LOUISIANA, AUGUST 24-26, 2004
Citibank Presents:Techniques toGrow Your ProgramPatti WallsAugust 26, 2004
Citigroup® Global Transaction ServicesCopyright © 2004 Citibank, N.A. CITIBANK, CITIDIRECT, CITIGROUP and the Umbrella Device are registered service marks of Citicorp or its affiliates.
3
Goal & Objectives
Discover new ways to grow your existing card program
Find out about new areas of use, interchange, merchant acceptance and large-ticket purchases
5
Evolution of the Purchase Card
Government that works better and costs less– Presidential Executive Order 12352, March 1982– Government chose Purchase Card, 1989– 1993 National Performance Review
Why Purchase Card?– Streamline the purchase order process for micro-purchases– Replace petty cash or impress funds– Provide a better audit tool– Reduce resources
Traditionally used to purchase high-volume, low dollar transactions
– Maintenance, repairs, office supplies (MROs)– Services (training / education, technical)– Operations (under $2,500)
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Program Growth – Then and Now
CardsTransactionsVolumeFiscal Year
320,38227.1 M$18.1 BProjected 2004
517,08220.6 M$10.2 B1999
670,37423.4 M$12.3 B2000
406,29024.4 M$13.8 B2001
392,57625.7 M$15.2 B2002
326,85026.4 M$16.3 B2003
7
Program Growth – Then and Now (continued)
Efficiencies and accomplishments
Employee empowerment– Faster ordering and receipt of goods / services– Elimination of pre-validation processes
Resource availability– Report generators– Common metrics
Transaction cost savings $1,830,576,000 / projected 2004– $69.34 x number of transactions / year
Rebates earned $70,613,385– Purchase card approximately $47M
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Program Growth – Then and Now (continued)
Independent conclusions
1997 Army Audit Agency survey found: – DOD on average would save $92 per transaction using the
credit card versus the purchase order
– They also found that they saved 4 hours in processing time per transaction when using a credit card
In addition, they cited this independent review:– Ten Federal civilian agencies cited reduced administrative expenses
of $53.77 per transaction when buyers used a credit card instead of the old purchase order system
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Program Growth – Then and Now (continued)
Independent conclusions
2003 Purchasing Card Benchmark Survey, Palmer & Gupta – The average administrative cost of procuring and paying for a good or
service via the purchase-order process is about $91, while the average cost with their purchasing card transaction is estimated to be about $21 - a net savings attributable to purchasing card use of $70 per transaction
– Estimated 8.3 days in time savings in card cycle versus procurement cycle
Importance is always relative– “Internal cost savings were 37 times greater than rebates received.”
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Purchase Card Goals
As old goals have been obtained and efficiencies have been realized, the government is searching for new efficiencies
Simple Consolidated
PaymentControls, Reporting,Interfaces
e-ProcurementInterfaces &Functionality
AdvancedMIS Reporting
& Enhanced Data
ClientNeed
PaymentFunctionality
Redesigned Process
VendorNegotiations
e-enabledstrategic
purchasing
Sophisticated, High-Dollar,
StrategicPurchases
Information
Simple,Non-Strategic
Purchases
Enhanced Tools
Purchase Card Functionality
11
Purchase Card Goals (continued)
Goals are changing as programs mature
Goals at inception– Reduce process cost / increase process efficiency– Increase convenience for employee– Reduce procurement cycle
Emerging goals– Obtain better Purchase Card data– Increase controls – Improve vendor management– New uses for the Purchase Card
• Convert more purchase order transactions to Purchase Card
12
Purchase Card Goals (continued)
Emerging goals
Obtain better Purchase Card data– Citibank® Custom Reporting System– Citibank® Electronic Reporting System– Electronic file output
• SBF
• DEF
13
Purchase Card Goals (continued)
Emerging goals
Increase controls– CitiDirect® Card Management System– Citibank® Custom Reporting System– Citibank® Electronic Reporting System
14
Purchase Card Goals (continued)
Emerging goals
Improve vendor management– Reports can paint a bigger picture
• Identify top ten vendors
• Number of transactions per year
• Dollars spent per year
• Negotiate better pricing with identified vendors– Report sources
• Citibank® Custom Reporting System
• MasterCard’s Enhanced Merchant Reporting
• Visa’s Information Management
15
Purchase Card Goals (continued)
Emerging goals
New uses– Uniform cleaning– Security expenses
(fingerprinting, drug tests, etc.)– Spare parts– Software– Subscriptions – Rental equipment– Safety supplies– Premiums items– Utilities– Telecommunications– Courier services
– Licenses– Health services– Short-term leasing– Snow removal– Landscaping– Training– Furniture– Plumbing– HVAC– Travel agency fees
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Purchase Card Goals (continued)
Future program audit tool
Data reporting and mining
Data available 48 hours after statement cycle
Mining criteria is configurable at the hierarchy level
One screen overview of the review status
Predefined report generation and distribution
Exception modeling capability
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Purchase Card Goals (continued)
Future program audit tool
Product roll-out
– July 2004 – Single Client pilot– September 2004 – Full Client pilot– Late 2004 / early 2005 – general client base
23
Purchase Card Goals (continued)
Support for the program
Senior management support– “…increased likelihood of receiving endorsements and resources for
existing initiatives, encouraging compliance to policies, and increasing visibility and buy-in.” Deloitte & Touche 2003 Procure-to-Pay study
Strong A/OPC leadership– Influence current and potential procedures– Strongest knowledge of day-to-day operations
24
Summary
Benefits of expanded purchase card use
Facilitates vendor negotiations
Reduces volume of purchase orders
Streamlines accounting processes
Enables monitoring of policy compliance
Improves spending controls
Enables regulatory reporting
Improves supplier / buyer relations
Cost savings and rebates
26
Reminders
Thank you for attending this session!
Visit the Citibank Welcome Center– The Maurepas Suite, on the third floor at the Sheraton– Pick up and complete a Citibank survey during your visit– National Industries for the Blind will have a display of products
Visit the Citibank Technical Demonstration Center– Napoleon Ballroom D1, on the third floor at the Sheraton
Citibank hands-on training– Grand Ballroom C, on the fifth floor at the Sheraton
Please take a moment to complete your GSA survey for this session
27
Citigroup's Global Corporate and Investment Bank ("GCIB") maintains a policy of strict compliance to the anti-tying provisions of the Bank Holding Company Act of 1956, as amended, and the regulations issued by the Federal Reserve Board implementing the anti-tying rules (collectively, the "Anti-tying Rules"). Moreover, our credit policies provide that credit must be underwritten in a safe and sound manner and be consistent with Section 23B of the Federal Reserve Act and the requirements of federal law. Consistent with these requirements, and the GCIB's Anti-tying Policy:
� You will not be required to accept any particular product or service offered by Citibank or any Citigroup affiliate as a condition to the extension of commercial loans or other products or services to you by Citibank or any of its subsidiaries, unless such a condition is permitted under an exception to the Anti-tying Rules.
� GCIB will not vary the price or other terms of any Citibank product or service based on the condition that you purchase any particular product or service from Citibank or any Citigroup affiliate, unless we are authorized to do so under an exception to the Anti-tying Rules.
GCIB will not require you to provide property or services to Citibank or any affiliate of Citibank as a condition to the extension of a commercial loan to you by Citibank or any Citibank subsidiary, unless such a requirement is reasonably required to protect the safety and soundness of the loan.
GCIB will not require you to refrain from doing business with a competitor of Citigroup or any of its affiliates as a condition to receiving a commercial loan from Citibank or any of its subsidiaries, unless the requirement is reasonably designed to ensure the soundness of the loan.
This presentation is for informational purposes only. Citibank USA, N.A. and its affiliates does not warrant the accuracy or completeness of any
information or materials set forth herein. This material does not constitute a recommendation to take any action, and Citibank USA, N.A and its affiliates are not providing investment, tax or legal advice. Citibank USA, N.A. and its affiliates accept no liability whatsoever for any use of this presentation or any action taken based on or arising from the material contained herein.