Fuelling Global Growth with SWIFT
Huawei’s Treasury Technology Transformation
Huawei is a flagship Chinese corporation that continues to demonstrate impressive growth across its extensive international footprint, resulting in increasingly complex and diverse cash and treasury requirements. To manage these evolving needs, Huawei has been a forerunner amongst Chinese multinationals in introducing industry-leading cash and treasury management technology and processes, including multibank connectivity through SWIFT.
Treasury organisation & objectives
Huawei has established an efficient treasury and finance organisation with a centralised group treasury function in Shenzhen and regional treasury centres in Singapore and the Netherlands. However, the company’s ambitious and highly successful growth strategy has resulted in greater complexity in its internal treasury technology and bank connectivity requirements. The number of banks and accounts had proliferated, with an increase in the number of banking connections and proprietary formats, which were costly and resource-intensive to maintain.
Consequently, Huawei recognised the need to implement a technology model that was more closely aligned with its business strategy and minimised operational risks. Treasury co-ordinated a project team comprising key personnel from account management, global payments, treasury and IT to set objectives and formulate and deliver on a strategy. This team identified the following objectives:
- Centralise payments through a global payment centre
- Achieve visibility and control over all accounts globally
- Enhance efficiency of internal cash and treasury management processes
- Improve quality and timeliness of reporting
- Automate payment and reconciliation processes
- Streamline bank communication through a single, robust channel
- Standardise payment formats and documentation across partner banks
To achieve its treasury objectives, Huawei made the decision to implement a new technology infrastructure (figure 1), supported with an efficient organisational structure and business processes:
- SWIFT for global bank connectivity;
- Payments are transmitted using MT101 messages (for urgent/ad-hoc payments) and SWIFT’s file transfer mechanism, FileAct (for batch payments). Most payments (including supplier payments) are conducted through FileAct;
- Global bank account balance and transaction reporting is obtained daily through FileAct;
- Standardised message ormats for payments and account statements based on ISO 20022 XML-based formats (XML). XML provides flexibility, versatility and future validity, with widespread stakeholder and regulatory support and increasing adoption globally. XML supported local language requirements and allowed enriched data to be exchanged, enabling Huawei to define detailed reconciliation rules and automate processes;
- SunGard treasury management system (TMS) for treasury and cash management, integrated with the group ERP, Oracle, and SWIFT, in order to automate the exchange of internal and external data.