As the CTO of Xign Corp., Sunny McRae has built an online subscription-based service for processing transactions. Most recently, Pleasanton, Calif.-based Xign signed an alliance with SAP AG under which the Xign network is linked to SAP applications. In an interview with Michael Vizard, McRae explains why more than 300 suppliers have signed up to use his company's XML-based service.
Q: What is the core area that Xign focuses on?We're essentially in the financial supply-chain business, focusing on the settlement aspect of the supply chain. The settlement consists of the invoice and payment, so from the time the supplier issues the invoice to the time they get the payment, that's the business we're in.
Q: What's unique about Xign?We have a full end-to-end payment model. We've fully reconciled that process for you. There's a lot more than just payment reconciliation. There's a notion of invoice reconciliation and trading partner synchronization. All that stuff we've actually done. Underlying all the applications we have a collaborative multidimensional reconciliation engine that reconciles all aspects of interaction between the buyer and the supplier, down to the semantic information, the exchanging of documents and workflow.
Q: What's your take on how Web services affect your service?I think that Web service is the next generation of the object model being exposed to the Internet. We essentially have our own object model, and Web service is one component of that. We focus the application content and then build, leverage Web services. Right now we have our own Web services, using SOAP and XML.
Q: What do you make of the J2EE vs. Microsoft .Net wars?All our current software right now is based on J2EE. We believe that the .Net will be some component of the enterprise, and we will be able to work with the .Net content. But our whole product line is built on J2EE.
Q: How accepting are your customers of a service like this?We haven't seen any pushback from the customer. Accounts payable and [accounts] receivable are one of those things that's a mundane, manual operation. They're looking for people like us they would outsource it to. Our future will be working with banks so they can provide these services to their customer on their behalf. We don't stay in the middle between the buyer and the bank.
Q: How complex is this system compared to what people use today?The approach we take is based on a physical paper-based system. Our fundamental foundation is that we have a physical address, either postal or e-mail. We want to make sure that it's not intrusive on the ERP side. So to deploy our system is a plug-and-play rollout. If you write a paper check, you sign it. We have digital technology, you sign it, and then encrypt it with the public key on the supplier side. You put it in an envelope and you address it to the supplier side. We put that together and we send an e-mail to the supply side.
Q: How does XML factor into your service?Obviously, we're based on XML. We took all the XML definitions and we essentially consolidated them together to become a superset of XML. From there, we can actually convert to any format that's available to the market.
Q: So at the end of the day, in this type of economy, what's the real payoff for this type of service?The payback for a big company is basically saving a million dollars a year. From the buyer's point of view, it's cost reduction. The other aspect of it is working capital and the fact you have visibility into what your payment stream is. If you shorten the settlement cycle, you have more visibility.
Sunny McRae, Xign.
-- Title: Vice president of engineering and CTO-- Biggest success: Co-founder of VC-funded Edify in early 1990s, which completed an IPO in 1996. The company continues to provide valuable services for consumers and businesses today.
-- Key challenge: Getting people to think about -- and act on -- what could be, as opposed to what is-- Favorite escape: Racquetball and snorkeling