ISA, now act as very competent and experienced + no-nonsense + top-notch + straight-talking + realist American Director of Tech CapEx Finance and Financial Planning and Analysis for Product & Engineering Pod at a top-tier tech-based Silicon Valley E-COMMERCE B2B2C MARKETPLACE to explain in professional + confident + eloquent + concise + casual conversational style all the steps involved in the 5 consecutive pages below. And then, for page 5, reverse engineer the financial model's results into its inputs and assumptions.


[Page 1]: 
Assume Walmart International's Cross Border  Trade (CBT) Business Unit was developing a B2B2C cross-border marketplace. 0nce sellers lists on Walmart International’s B2B2C Cross-Border Marketplace, they would seamless be able to select countries to sell into to cross-border shoppers in other countries around the world where Walmart International’s Local Marketplace (for example, Walmart.ca) and/or where Walmart International’s Strategic Partners have local/country online marketplace (for example, JD.com in China).


[Page 2]:
###The ERP Investment Project

***Cross Border Trade (CBT) team has amplified an existing need for automated intercompany reconciliation Global Cross Border Team
solution**

**Issue:**
There are $107M intercompany sales in FY18, all of which are manually tracked – this hinders company growth and presents multiple legal, tax and reporting complications

**Why We Need It:**
*Legal:* Proper legal entity accounting supports legal’s position that our separate entities are adequately capitalized and all formalities have been respected

*Accounting:* Correct legal entity accounting allows tax to increase planning opportunities, decrease additional tax costs, and have an overall reliability of processes and results

*"Reporting:*" Audit Analytics reported that out of 23 differing reasons for external reporting restatements, intercompany ranked #5 (restatements can lead to reputational damage)

*Growth:* If Walmart is to continue buying eCommerce entities, we will put our financials at risk without proper legal entity accounting

**Solution (e.g., 3rd-Party Vendors like Blackline):**
• Accurately record both sides of an intercompany transaction (correct trading partner and value) from point of entry to corporate consolidation
• Systematically clear intercompany Account Payables and Account Receivables transactions in a timely manner
• Appropriately reflect management and legal entity reporting without requiring manual reconciliation between financial reports
• Implement controls (process, tools, governance) for all manual intercompany journal entries and automate where possible
• Enable systematic drill-down of intercompany reporting and analytics
• Introduce end-to-end system testing and functional (Accounting, Tax, Treasury, etc.) oversight of technology changes
• Estimated 2-year investment is $9M ($5M for Blackline; $4M for rebuilding HFM to ensure controls on financial consolidation)
• Funding comes from GBS


[Page 3]:
###Background for the ERP Investment Project:

• CBT launched an RFI back in August 2017 to get transportation and warehousing rates for Walmart International, its acquired Marc Lore's Jet.com with its verticals/digital native consumer Brands (i.e., ModCloth.com, Shoes.com, Moosejaw.com, Bonobos.com) and 3rd party sellers for Walmart's Canada and Mexico marketplaces 
• FedEx Crossborder Entity (formerly known as Bongo) was selected based on its low cost, creative agile solution, and more importantly the existing ongoing business between its parent company FedEx, Inc., and Walmart International's parent company Walmart, Inc. which gave Walmart International leverage in negotiating against FedEx Crossborder Entity (potential transportation savings ~$14M assuming 50% adoption rate by Walmart International's Crossborder online listed 3rd-party sellers)

**What CBT LLC is and why it was set up:**
• We need an entity/cost center to handle Duties & Taxes as well as Shipping & Handling when the services are used for 3rd party sales; without it, we would not be able to extend the negotiated rates to 3rd party sellers
• Setting up CBT was a joint decision between CBT, Accounting, Finance, Controllership, Global Business Services, Tax, Transfer Pricing, Compliance, Marketplace, Tech and Logistics (workshop held in December 2017)
• A small management fee will be collected for the service provided, which should cover reserves for foreign exchange fluctuations, relevant taxes and CBT team.


[Page 4]:
###Financial Flow Narrative & Validation 

**Flow # a1 to b1:**
A Canada-based customer places an order for SHOES.COM merchandise via Walmart International's Canada Marketplace Walmart.Ca (Marketplace). Order intake will use walmart.ca existing systems to process customer purchase authorization including UPS & FedEx Crossborder Entity shipping costs specific to the CBT program as well as any applicable taxes, customs &duties at checkout.

**Flow # b1 to b2:**
Channel Advisor used to relay order from Walmart International's Canada Marketplace walmart.ca to SHOES.COM. Channel Advisor will allow walmart.ca to treat SHOES.COM as if it were any other 3rd party seller on its website. Channel Advisor will allow SHOES.COM to process orders through walmart.ca the same as any other vendor website. The orderintake, fulfillment & shipment will be processed by the existing systems of SHOES.COM.

**Flow # b2 to c1:**
Upon receiving the order, SHOES.COM picks and packages the merchandise for shipping. Order fulfillment will use SHOES.COM existing systems. The package(s) are provided to UPS so customer payment can be processed. 

**Flow # c1 to b2 + Flow # b2 to d1 + Flow #  e2 to e3:**
After taking possession of the packaged customer order, UPS generates a tracking number and provides it to SHOES.COM Communicationof the tracking number from UPS to SHOES.COM uses existing automated system processes. Communication of the tracking # from SHOES.COM to walmart.ca will be automated. Walmart.ca will provide the tracking number to the customer using its existing systems. UPS will invoice SHOES.COM directly and SHOES.COM will pay the invoice using existing systems and processes.

**Flow # b2 to d1:**
When UPS takes possession of the order, Channel Advisor provides shipping notification to walmart.ca. Channel Advisor will provide automated notification to walmart.ca that SHOES.COM has fulfilled order. At this time walmart.ca will process the customer payment & flag the transactionas intercompany for accounting and payment processing purposes.

**Flow # c1 to c3 + Flow # c3 to c4:**
UPS delivers the package to FedEx Crossborder Entity. UPS has the ability to generate a tracking number compatible with FedEx’s systems, allowing the customer a single tracking # to monitor shipment progress across multiple shippers. FedEx delivers the package to the customer using same UPS generated tracking number and pays duties & customs in the process.

**Flow # d1 to e1:**
Upon receiving the shipping notification, walmart.ca processes customer payment & kickoffs internal accounting processes. Customer
payment will be processed through walmart.ca existing systems. For facilitating the transaction, walmart.ca will recognize a set commission & reserve for any domestic taxes from the customer payment received. Commission & taxes will be collected through walmart.ca existingsystems. The commission amount has been validatedby Walmart Tax/transferpricing teams.

**Flow # e1 to e2:**
Assuming Delivery Option A: Remaining payment remitted by walmart.ca to CBT. Payment ACH denominated CAD & delivered to CBT using walmart.ca existing systems/processes that support marketplace vendors. To manage exchange rate fluctuations CBT will partner with Citibank (or other such provider) to contractually guarantee a fixed rate from customer purchase to conversion of payment to USD. The fee for this service will be incurred through the FX rate. CBT will provide CAD amounts to Citibank (for USD translation) via ACH on a two week cadence.

**Flow # e2 to e3:**
*Before remitting USD net proceeds to SHOES.COM, CBT will:*
• Recognize a set “cost to serve fee” for bearing FX risk & managing relationships w/ FedEx & possibly Citibank (to minimize FX risk). WMT Tax/transfer pricing teams to determinefee amount.
• Reserve payment for FedEx for services rendered. FedEx Crossborder Entity to invoice CBT directly.
• CBT remits net USD proceeds to SHOES.COM viaACH. Remittal to occur on a two week cadence. 

**Flow # d2 to d3 + Flow # e3 to d3:**
FedEx Crossborder Entity will invoice CBT directly & CBT will pay the invoice. UPS will invoice SHOES.COM directly & SHOES.COM will pay the invoice using its existing systems and processes.

[Page 5]:

###Business & Technology Value
***Summary***
Executive Sponsor: Nate K
Business Owner: Robert P
Tech Owner: Arnie K
Product Owner: Ben J
**Owner of Finanial Modeling, Budgeting, Forecasting, Reporting and FP&A**: Ted B
Type of Program: Invest
Initiative Type: ERP

***Rationale***
• Customers are increasingly negotiating a global ecommerce environment, demanding broad assortments, and authentic, and high quality products. They are willing to make purchases on foreign sites to get what they want. By 2021, 
cross border eCommerce will represent a $1.4 trillion opportunity and is the fastest growing segment in global eCommerce

• Cross-border is already a proven opportunity with Walmart. On Walmart.com, there’s a growing share of users coming from non-US IP addresses and shipping to freight forwarders, but we don’t have the systems to support the demand

• If we don’t invest in bringing our global assortment to worldwide customers, we will continue losing customers to competitors with this capability (e.g., Amazon)

• Our competitors are already generating 10-20% of their total GMV from Cross Border Trade, and we estimate this to be a $6B opportunity for Walmart in year 5 by cross-listing assortment to Walmart platforms & strategic partners

**Dependencies:**
• *Internal risks:* A significant amount of internal stakeholders and processes will need updating and enhancement, particularly intercompany accounting, which is in dire need of automation and systems (e.g., Blackline) to support our scale.

***Capabilities Delivered***
• Cross-border logistics & fulfillment programs that ease the direct cross-border shipments of customer orders
• Ability to cross-list assortment across all platforms (like Walmart's Strategic Partners JD.com & Rakuten, and Walmart.com USA itself)
• Ability to list Specialty Stores (e.g., Walmart.ca, Walmart.com.mx)
• Value-add services for sellers (e.g., translation, currency conversion)
• Fulfilled / Ship with Walmart (impacted markets: Canada CA, Mexico MX, China CN, Japan JP; worldwide to follow)

*FY19 Q1 - Launch cross-listed assortment (Shoes in Canada)*
Spent: $XXM 
Committed: $XXM 
Planned: $XXM 

*FY19 Q1 and Q2 - Roll-out new functionality (Export hub, fulfillment, direct shipment model)*
Spent: $XXM 
Committed: $XXM 
Planned: $XXM 

"FY19 Q3 - Launch unified seller experience*
Spent: $XXM 
Committed: $XXM 
Planned: $XXM 

**TOTAL SPENT**: $XXM
**TOTAL COMMITTED**: $XXM
**TOTAL PLANNED**: $XXM


***Business Value:***
• Increased sales due to cross-listed assortment on all Walmart platforms and strategic partners
• Increased global exposure for Walmart specialty stores
• Increased leverage of physical assets 
• Lower cost to serve for fulfilling orders and leveraging our purchasing power

***Technology Value:***
• Fully integrated global marketplace, allowing sellers to integrate once, but list everywhere
• Seamless seller experience, from a single order view to a unified payment
• Further incentive for markets to leverage & standardize, reducing operational costs and capex
• New tech layer (e.g., enabling cross border shipping programs, automated item classification, duties)

Expected Financial Investment & Value
Program Total: $51.1M (FY19: $5.8M, FY20+: $45,2M)


***Workforce Planning/Resourcing:***
Business FTEs: 15
Tech FTEs 40 = Internal FTEs 20 + External 20 (i.e., External Contractors)
% External Resources: 50%


##Financial Model & Assumptions

***Financial Excel Model***
**Financial Excel Model Sheet 1 (Summary)**
Ask ($M)
Cap. ($M):$16.4
Expense: ($M):$36.4
IRR: 1728.3%

*Total Project Metrics:*
Payback (Yrs): - 
Useful Life (Yrs): 5.0 

*Tech Inputs:*
System Savings: $ -
Dev. Labor Cap Rate: 32%

*Highlights:*
Hardware Costs ($M): $ - 
Software Costs ($M): $ - 
Write-Off ($M): $ -
Business Costs ($M): $ -
Total Cost ($M): $ -

*Market General Manager's Inputs:*
Sales Lift/Store ($K): $ 269
Sales Lift %: 1.40%
Incremental GP Rate: 26.0%
Incremental GP Rate: 26.0%
Labor Efficiency: $ -
Inventory Reduction: $

**Financial Excel Model Sheet 2 (Calculations)**

Column 1 Title: ($M) Incremental; Column 2 Title: Initial Outlay: Column 3 Title: FY19; Column 4 Title: FY20; Column 5 Title: FY21; Column 6 Title: FY22; Column 7 Title: FY23
Total Cap Ex Invest.; -; $ 1.9; $ 3.5; $ 3.6; $ 3.7; $ 3.8
Total Op Ex Gross Invest.; -; $ 4.2; $ 7.8; $ 7.9; $ 8.1; $ 8.3
Total Gross Profit Increase; -; $ 194.2; $ 437.5; $ 481.3; $ 529.4; $ 582.4
Int'l Tech Cap Ex Inv.; -; $ 1.9; $ 3.5; $ 3.6; $ 3.7; $ 3.8
Int'l Tech Op Ex Gross Inv.; -; $ 4.2; $ 7.8; $ 7.9; $8.1; $ 8.3
Int'l Tech Op Ex Savings; -; $ -; $ -; $ -; $ -; $ -;
Segment Cap Ex Invest. ; -; $ -; $ -; $ -; $ -; $ -;
Segment Op Ex Gross Invest. ; -; $ -; $ -; $ -; $ -; $ -;
Segment Op Ex Savings; -; $ -; $ -; $ -; $ -; $ -;
Total Mkt Cap Ex Invest.; -; $ -; $ -; $ -; $ -; $ -;
Total Mkt Op Ex Gross Invest.; -; $ -; $ -; $ -; $ -; $ -;
 Total Mkt Gross Profit Increase; -; $ 194.2; $ 437.5; $ 481.3; $ 529.4; $ 582.4

***Assumptions***
• **Budget:**
- Secure funding for the additional resources 
meet business needs/asks
• Walmart Canada Marketplace's Order Management System (OMS):
- Deliver some dependencies on Walmart Canada OMS
• *Acquired Verticals/Digital Native Brands (Shoes.com et al.)
- Commitment to support, engage and onboard 
to our platform