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Introduction to SIS

Introduction to SIS. RA43 James Shannon, IATA. Goal & Agenda. Project Overview The Need For IS Vision IS Solution & Features Benefits & Changes Next Steps. To familiarize you with Simplified Interline Settlement and prepare you for tomorrow’s breakout sessions. Project Overview.

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Introduction to SIS

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  1. Introduction to SIS RA43 James Shannon, IATA

  2. Goal & Agenda • Project Overview • The Need For IS • Vision • IS Solution & Features • Benefits & Changes • Next Steps To familiarize you with Simplified Interline Settlement and prepare you for tomorrow’s breakout sessions SIS P3 – Materials – RA43 Intro to SIS

  3. Project Overview SIS P3 – Materials – RA43 Intro to SIS

  4. Interline Settlement - Today Paper invoices, with coupon listing, coupons, rejects, supporting documents (monthly) Settlement sheets – (weekly) Recap sheets - weekly Billed Entity ACH Billing Entity F3– (weekly) F12 – (weekly) F1 – net amounts of inv F2 - summary ICH ATPCO Cargo IDEC File (monthly) Cargo IDEC File (monthly) Pax IDEC File (monthly) Pax IDEC File (monthly) (incl F&F pre IDEC Validation) prorate engine prorate engine ARC-Compass (NFP storage) Previously released sales record GDSs BSPs F&F: receives NFP value AIA F&F SIS P3 – Materials – RA43 Intro to SIS

  5. SIS Vision Fundamentally change, simplify and integrate the interline settlement process, delivering tangible financial benefits to the industry. • Invoices are electronic and not backed by paper • Prime passenger billings do not require paper invoices or coupon listings • IDEC formats are maintained with increased record types • Passenger rejects, including any attachments, are submitted electronically without paper • Cargo and Mail billings are electronic and paperless • Miscellaneous billings (including any supporting information) are electronic, whether as data or with attachments • Settlement action directly from ET systems is enabled SIS P3 – Materials – RA43 Intro to SIS

  6. SIS Phase 3 Phase 1 Feasibility Phase 2 Requirements Development Phase 3 Implementation • Phase 1 – Feasibility followed FC96 in May 2007 • Phase 2 – Requirements Development ran from December 2007-July 2008. Included the initial RFI • Phase 3 was too large to handle as a single operation, and was split: • Phase 3a became the RFP and selection process, from which the Kale/iPayables proposal was chosen • Phase 3b is the current System Design and requirements finalisation phase • Phase 3c is the System Development and Pilot testing SIS P3 – Materials – RA43 Intro to SIS

  7. Phase 3 - Steering & Working Groups Airline participation has been essential to the progress that SIS had made: • Steering Group • Passenger WG • Cargo WG • Miscellaneous WG • IT WG  Over 60 participants from over 30 carriers • ICH Operations WG SIS P3 – Materials – RA43 Intro to SIS

  8. ISSolution & Features SIS P3 – Materials – RA43 Intro to SIS

  9. Interline Settlement - Today Paper invoices, with coupon listing, coupons, rejects, supporting documents (monthly) Settlement sheets – (weekly) Recap sheets - weekly Billed Entity ACH Billing Entity F3– (weekly) F12 – (weekly) F1 – net amounts of inv F2 - summary ICH ATPCO Cargo IDEC File (monthly) Cargo IDEC File (monthly) Pax IDEC File (monthly) Pax IDEC File (monthly) (incl F&F pre IDEC Validation) prorate engine prorate engine ARC-Compass (NFP storage) Previously released sales record GDSs BSPs F&F: receives NFP value AIA F&F SIS P3 – Materials – RA43 Intro to SIS

  10. Integrated Settlement Settlement Processes ICH ACH Central Repository Processes at time of Sales NFP engine ARC COMPASS™ Integrated Settlement IS-WEB IS-WEB Billed Entity Billing Entity “Digital Signature” Company IS-XML IS-XML Overall Processes Overall Processes Billing & Invoicing Processes IS-IDEC IS-IDEC Prorate Engine Usage File SIS – Materials – RA42 Breakout Interfaces & Validation SIS P3 – Materials – RA43 Intro to SIS 11 September 2008

  11. No F12 files. No recap sheets, either. Nothing that you submit to the ICH or ACH today can be submitted after migration. SIS P3 – Materials – RA43 Intro to SIS

  12. Main Features of IS • File Formats & Validation • Passenger • Time of Sales – NFP final, NFP non-final, and Own Prorate Storage • Value Determination & Autobilling • Sampling • Correspondence • Audit Trail • Differences for Cargo • Differences for Miscellaneous • Bringing It All Together • Member Administration • Processing Dashboard • Document Storage SIS P3 – Materials – RA43 Intro to SIS

  13. File Formats & Validation SIS P3 – Materials – RA43 Intro to SIS

  14. Settlement Processes ICH ACH Central Repository Processes at time of Sales NFP engine ARC COMPASS™ File Formats Integrated Settlement Format Conversion: • Billed Entity’s choice of format does not depend on the billing carrier’s IS-WEB IS-WEB Billed Entity Billing Entity “Digital Signature” Company IS-XML IS-XML Enabling Processes Enabling Processes Billing & Invoicing Processes IS-IDEC IS-IDEC Prorate Engine Usage File Send files (or enter online) Receive (or download) invoices Validation Format Conversion SIS P3 – Materials – RA43 Intro to SIS

  15. File Formats – IS-IDEC No longer data exchange file, but rather used to create an invoice and settlement file Similar to IDEC, with enhancements: Existing fields made mandatory (source codes, etc) New records added (Rejection Memos, tax breakdowns, etc) New fields added (for e-billing, additional info, etc) Unnecessary records / fields removed (batch total records, etc) 500 byte records (instead of 160 byte) Every carrier will need system enhancements to support IS-IDEC SIS P3 – Materials – RA43 Intro to SIS 17 September 2008

  16. File Formats – IS-XML New XML format for Integrated Settlement Based on IATA Aviation Invoice Standard, used by IATA InvoiceWorks Identical fields and validation requirements to IS-IDEC Every carrier will need to make system enhancements to support IS-XML IS-IDEC vs. IS-XML is an IT decision – it is immaterial to the RA department Potential Benefits of IS-XML IS-XML format is more flexible and thus better than IS-IDEC for variable record structure (like Miscellaneous billings) Potential Benefits of IS-IDEC Relatively little system development for carriers with a sophisticated IDEC solution in place already IS-IDEC format is more efficient (processing, storage, and internet bandwidth) than IS-XML for a fixed record structure SIS P3 – Materials – RA43 Intro to SIS 18 September 2008

  17. IS-WEB Record Structure Web-based user interface to create and receive invoices and records Identical fields and validation requirements to IS-IDEC and IS-XML Validation in real-time minimizes possibility of later validation errors Potential Benefits The web interface is hosted by IATA, so no system development is required by carriers Potential Negatives More internet bandwidth will be required than file formats, and the connection will have to be stable Won’t be as user-friendly as a dedicated, local system  Not an alternative to a Revenue Accounting system SIS P3 – Materials – RA43 Intro to SIS 19 September 2008

  18. IS-WEB For Everybody IS-WEB is also used for other web-based services Audit Trail Pax & Cargo Correspondence Online Corrections after validation failure Processing Dashboard Airline profile updates Web Analysis Reports View and print invoices in a standard format Extensive user access controls (your company’s administrator can grant detailed permissions) SIS P3 – Materials – RA43 Intro to SIS 20 September 2008

  19. Breakdown Records Breakdown Records have been added where necessary to provide for detailed, possibly repeating, data and to provide for large amounts of text E.g., a coupon can have 0 or more tax breakdown records, each detailing a tax type and amount Examples Coupon Prime Billing breakdown records: Tax, VAT breakdown Breakdown records for Rejection, Billing, Credit Memos: Reason Breakdown, Coupon Breakdown (with Tax & VAT) SIS P3 – Materials – RA43 Intro to SIS 21 September 2008

  20. Example Breakdowns (Pax Rejection Memo) Rejection Memo (SFI = 21) Reason Breakdown (SFI = 31) Coupon Breakdown (SFI = 32) VAT Breakdown (SFI = xx) Reason Breakdown (SFI = 31) Coupon Breakdown (SFI = 32) VAT Breakdown (SFI = xx) Coupon Breakdown (SFI = 32) VAT Breakdown (SFI = 34) Tax Breakdown (SFI = 33) Tax Breakdown (SFI = 33) Tax Breakdown (SFI = 41) SIS P3 – Materials – RA43 Intro to SIS 22 September 2008

  21. Settlement Processes ICH ACH Central Repository Processes at time of Sales NFP engine ARC COMPASS™ Validation Integrated Settlement Validation: • Guarantees links between records (e.g. 2nd and 1st RMs) • Enforces timeframes and “order” (1st RM -> 2nd RM -> 3rd RM) • Ensures file is properly formed • Other validations IS-WEB IS-WEB Billed Entity Billing Entity “Digital Signature” Company IS-XML IS-XML Enabling Processes Enabling Processes Billing & Invoicing Processes IS-IDEC IS-IDEC Prorate Engine Usage File Send files (or enter online) Receive (or download) invoices Validation Format Conversion SIS P3 – Materials – RA43 Intro to SIS

  22. Examples of Validation Format Rules Ensures data types (e.g. numeric/alphanumeric), length, etc as defined Correct Values e.g. Settlement method cannot be “ACH” if both airlines are only ICH members Mandatory Fields Source Code, Ticket Issuing Airline, Coupon Number, etc Rejection & Correspondence Timeframes and Order Enforced 1st RM  2nd RM  3rd RM  Correspondence Mandatory Breakdown Records Are Present Tax breakdown records are present if coupon tax is populated and the breakdown record sums match the tax field Billing entity will be notified of validation results Invoices (and possibly files) failing validation will not go any further SIS P3 – Materials – RA43 Intro to SIS 25 September 2008

  23. Passenger SIS P3 – Materials – RA43 Intro to SIS

  24. Time of Sales – Now (Optional) Billed Airline Settlement sheets – (weekly) Recap sheets - weekly Billing Airline ACH F3– (weekly) F12 – (weekly) F1 – net amounts of inv F2 - summary ICH ATPCO Pax IDEC File (monthly) Pax IDEC File (monthly) (incl F&F pre IDEC Validation) prorate engine prorate engine ARC-Compass (NFP storage) Previously released sales record Sales Records, NFPs GDSs BSPs F&F: receives NFP value All: May receive sales records AIA F&F Sales Records Optional Proration, Storage, Switching SIS P3 – Materials – RA43 Intro to SIS 27 September 2008

  25. Time of Sales – With IS Settlement Processes ICH ACH Central Repository Integrated Settlement IS-WEB IS-WEB Billed Airline Billing Airline “Digital Signature” Company IS-XML IS-XML Enabling Processes Enabling Processes Billing & Invoicing Processes IS-IDEC IS-IDEC Prorate Engine Usage File Processes at time of Sales ARC COMPASS™ NFP engine Sales Records or Own Prorates Sales Records, NFPs, & Sales Carrier’s Own Prorates Optional Proration (final & non-final), Storage, Switching SIS P3 – Materials – RA43 Intro to SIS 28 September 2008

  26. Neutral Fare Prorates – With IS NFP engine will be available to carriers for FIRST & FINAL™ (NFP Final) and non-F&F (NFP non-final) purposes NFP non-final could minimize rejections without any obligation by the carriers Own prorate storage and switching will allow the sales carrier to upload prorates, which are then forwarded or made available to the billing carrier SIS P3 – Materials – RA43 Intro to SIS 29 September 2008

  27. Time of Billing – Now Billed Airline Billing Airline Pre-IDEC Validation for F&F NFP values (updates the PMI) ATPCO Pax IDEC File (monthly) Pax IDEC File (monthly) (incl F&F pre IDEC Validation) prorate engine prorate engine ARC-Compass (NFP storage) GDSs BSPs Previously released sales record F&F: receives NFP value All: May receive sales records AIA F&F SIS P3 – Materials – RA43 Intro to SIS 30 September 2008

  28. Submitting Billing Information – With IS Settlement Processes ICH ACH ARC COMPASS™ Integrated Settlement Billing File / Data (similar to today) Billing File / Data (similar to today) IS-WEB IS-WEB Billed Airline Billing Airline “Digital Signature” Company IS-XML IS-XML Enabling Processes Enabling Processes Billing & Invoicing Processes IS-IDEC IS-IDEC Central Repository Prorate Engine Usage File Processes at time of Sales NFP engine Billing Value Confirmation (Leaves “Original PMI”, updates “Value Confirmation PMI”) SIS P3 – Materials – RA43 Intro to SIS 31 September 2008

  29. Time of Billing – IS Value Determination Settlement Processes ICH ACH Processes at time of Sales NFP engine ARC COMPASS™ Integrated Settlement Billing File / Data (similar to today) Billing File / Data (similar to today) IS-WEB IS-WEB Billed Airline Billing Airline “Digital Signature” Company IS-XML IS-XML Enabling Processes Enabling Processes Billing & Invoicing Processes IS-IDEC IS-IDEC Central Repository Prorate Engine Usage File Usage File Prorate Values SIS P3 – Materials – RA43 Intro to SIS 32 September 2008

  30. Time of Billing – IS Auto-Billing Settlement Processes ICH ACH Central Repository Processes at time of Sales NFP engine ARC COMPASS™ Integrated Settlement Billing File / Data (similar to today) No Billing File From Carrier IS-WEB IS-WEB Billed Airline Billing Airline “Digital Signature” Company IS-XML IS-XML Enabling Processes Enabling Processes Billing & Invoicing Processes IS-IDEC IS-IDEC Prorate Engine Usage File Usage File Billing and Invoice Files Created Within IS Daily Revenue Recognition File Weekly Invoice Posting File SIS P3 – Materials – RA43 Intro to SIS 33 September 2008

  31. Sampling Provisional Invoice (as today with prime coupon billing, but with elements from Forms A and B) Universe Adjustment (Form C) Digit Evaluation (Forms D and E) Form G (ACH) Rejection Memos & Correspondence (as today with non-sample but with elements from Forms F and XF)  All via IS-IDEC, IS-XML, and IS-WEB SIS P3 – Materials – RA43 Intro to SIS 34 September 2008

  32. Pax & Cargo Correspondence Settlement Processes ICH ACH Processes at time of Sales NFP engine ARC COMPASS™ Integrated Settlement IS-WEB IS-WEB Billed Airline Billing Airline “Digital Signature” Company IS-XML IS-XML Enabling Processes Enabling Processes Billing & Invoicing Processes IS-IDEC IS-IDEC Central Repository Prorate Engine Usage File Enter Correspondence (including attachments) Receive Correspondence (including attachments) Validation SIS P3 – Materials – RA43 Intro to SIS 35 September 2008

  33. Pax & Cargo Correspondence Correspondence can include an “authority to bill” flag which identifies when the authority to bill has been issued Not tied to settlement periods like transactions in Integrated Settlement – real-time and similar to e-mail but via IS-WEB interface Validation ensures no “cross-over” – correspondence can only be in reply to another correspondence (or 3rd-stage RM) and cannot be out-of-order SIS P3 – Materials – RA43 Intro to SIS 36 September 2008

  34. Audit Trail & Rejection History With operational data being stored: Future records (e.g. rejections) don’t need supporting documents re-attached IS-WEB can be used to search and take action on previous billings: Search & browse through all records for which your carrier billed or was billed Drill down through tickets, coupons, tax breakdowns, correspondences, etc View audit trail of linked correspondences, rejections, and prime billings Find outgoing correspondences that haven’t been responded to Go directly to appropriate action (create RM, create correspondence, create billing memo) SIS P3 – Materials – RA43 Intro to SIS 37 September 2008

  35. Audit Trail (example view) Create Correspondence SIS P3 – Materials – RA43 Intro to SIS 38 September 2008

  36. Key Differences forCargo & Misc SIS P3 – Materials – RA43 Intro to SIS

  37. Key Differences for Cargo • All cargo record types also represented in IS-IDEC, IS-XML, and IS-WEB • The IATA e-freight project will introduce e-electronic formats (structured data) for these supporting documents over time • Before then, carriers can bilaterally decide to use e-electronic formats, or to not transfer supporting documents at all SIS P3 – Materials – RA43 Intro to SIS

  38. Key Differences for Miscellaneous • IS-IDEC cannot be used for Miscellaneous billings (only IS-XML and IS-WEB) • All Miscellaneous billings are uniquely defined by a charge category and charge code, allowing for routing to the correct person/department, automatic posting, or even automatic reconciliation • Examples: SIS P3 – Materials – RA43 Intro to SIS

  39. Bringing it Together SIS P3 – Materials – RA43 Intro to SIS

  40. Bringing it All Together • Member Administration will contain centralized preferences for your company: • User Administration with the ability to create users and roles, customize user permissions • Member Profile to set your own preferences, such as: • Who to contact for ICH alerts, file validation failures, etc • Rules as to how IS will operate for your company (apply digital signatures, allow corrections, etc) • Processing Dashboard will provide a centralized overview of all submitted files and their statuses throughout the Integrated Settlement SIS P3 – Materials – RA43 Intro to SIS

  41. Supporting Documents Supporting documents can be attached to most record types (including Pax Prime Billings, Cargo, Miscellaneous) Two types of supporting documents: Electronic Presentation - Supporting document that is digital but not in a defined and structured format. The document might be a PDF file or an image that a computer can read but not extract data from. E-Electronic Document – Supporting document that is in a defined and structured format which can be parsed by a computer. Example formats are IDEC, XML, or CSV. SIS P3 – Materials – RA43 Intro to SIS 44 September 2008

  42. Supporting Documents – With IS Settlement Processes ICH ACH Central Repository Processes at time of Sales NFP engine ARC COMPASS™ Integrated Settlement IS-WEB IS-WEB Billed Airline Billing Airline “Digital Signature” Company IS-XML IS-XML Enabling Processes Enabling Processes Billing & Invoicing Processes IS-IDEC IS-IDEC Prorate Engine Usage File Batch Transfer e.g. FTP Batch Transfer e.g. FTP SIS P3 – Materials – RA43 Intro to SIS 45 September 2008

  43. Central Repository & Supporting Docs What? Any type of accepted supporting document (image, PDF, etc) How long? As long as the data is operationally required When? Before or after the associated record is uploaded (with “pending attachments” flag, which allows for notifications if not uploaded) How? Discussed in more detail during the Breakout Sessions SIS P3 – Materials – RA43 Intro to SIS 46 September 2008

  44. Benefits & Changes SIS P3 – Materials – RA43 Intro to SIS

  45. Key Benefits of IS – Billing Carrier • Substantial savings due to: • Reduction in paper, postage and courier fees • Reduction in internal paper handling and supply chain efforts • No more loss of supporting documents and re-creation of invoices • Automation of billing directly from uplifts (e.g. Auto-Billing) • Optional à la carte service of “Integrated Settlement” SIS P3 – Materials – RA43 Intro to SIS

  46. Key Benefits of IS – Billed Carrier Substantial savings due to: • Reduction in internal paper handling and supply chain efforts(e.g. registration, and reconciliation of invoices to payment) • Automated data • Less manual intervention • Data quality improvements on IS-IDEC • Pax Rejection Memos, Billing and Credit Memo electronically • Cargo Original AWB, Rejection and Charge Memo electronically • Supporting Documents immediately available in electronic presentation SIS P3 – Materials – RA43 Intro to SIS

  47. Key Benefits of IS • Rejection Memo & Correspondence process improvements due to: • Enforcement of RAM rules (RM stage and correspondence) • Opportunity to detect duplicate rejections of the same original billing • All rejections and correspondence link to previous billings; information and supporting documents do not have to be re-uploaded • Time-limit reduction possibilities for Rejection Memos and Correspondence • Risk management and process improvements due to: • Fewer items outstanding for a shorter period of time • Future potential time-limit reduction for prime / original billings • Benefits to the environment due to reduction of paper and shipping • Alliance objectives complemented by SIS SIS P3 – Materials – RA43 Intro to SIS

  48. Airline Changes (where applicable) • Change from IDEC to IS-IDEC • 500 bytes instead of 160 bytes • Follow rules in RAM • Some detail records mandatory (e.g. taxes) • Other elements mandatory (e.g. Source Code) • Choose and implement other submission formats (IS-XML, IS-WEB) • Prepare to scan and upload supporting documents • Implement e-billing (possible legal implications) SIS P3 – Materials – RA43 Intro to SIS

  49. Next Steps SIS P3 – Materials – RA43 Intro to SIS

  50. Next Steps This Week • Breakout Sessions Back at Your Office • Airline Business Case (on the SIS website) • IS Participation Guide (see the breakout session) • Internal Planning and Budgeting (based on the IS Participation Guide and the Migration breakout session) SIS P3 – Materials – RA43 Intro to SIS

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