Cash & Liquidity Management

Page 1 of 3

Building a Global Payments Factory at Pirelli While many companies treated SEPA primarily as a compliance project, Pirelli took the opportunity to centralise and optimise payments processing, not only at a European level but globally too.

Building a Global Payments Factory at Pirelli

by Luca Nava, Head of Cash Management and Treasury Back Office, Pirelli

Pirelli

Like many companies, SEPA migration was a priority for Pirelli between 2012 and 2014. However, while many companies treated SEPA primarily as a compliance project, Pirelli took the opportunity to centralise and optimise payments processing, not only at a European level but globally. In this article, Luca Nava, Head of Cash Management and Treasury Back Office, discusses the rationale, solutions and outcomes of the project so far.

Pirelli

Treasury organisation

Although Pirelli is headquartered in Milan, treasury and finance activities are located in three centres: London, UK, Milan, Italy and Sao Paolo, Brazil. In the London-based treasury centre, Pirelli International plc, a team is responsible for financial planning, dealing, funding, liquidity and centralised payments (payments factory), while in Milan, there is a team focused on global back- and middle-office activities for Pirelli International plc and some other European subsidiaries. Finally the Latam treasury and finance centre based in Sao Paolo, Pirelli Pneus Ltda, is fully dedicated to South American subsidiaries

Concept and reality of a global payments factory

Our idea of building a global payments factory at Pirelli was conceived some years before SEPA became a reality, but by the time the implementation came about, the timing was such that SEPA instruments and formats could be incorporated from the start. Before embarking on the project, we identified a number of key criteria for a successful payments factory.

Global reach - Given the regulatory complexity in some markets, such as China, Russia and Latin America, not every entity could be included in the payments factory. However, the aim was for the global payments factory to incorporate as many countries and companies as possible across the Pirelli group. So far, we have been able to incorporate 52 companies across 40 countries.

SAP-based infrastructure - As Pirelli was one of the first Italian companies to implement SAP, and as SAP plays an integral role in our business, the payments factory needed to be SAP-based. So an early task during the project was to implement SAP’s treasury and payments factory modules.

Standardisation - The use of standardised formats both within the Eurozone and more widely was essential in order to achieve the efficiencies we were seeking. We therefore became early adopters of XML formats. While XML ISO 20022 is not yet fully established as a global standard, there has been considerable progress made so far, not least because it underpins SEPA payment instruments, and we anticipate future development in the way that we can use these formats.

Bank connectivity and formats - We have a specific BIC code for Pirelli, and we wanted to connect our global payments factory with SWIFT in order to achieve multi-bank connectivity through a single channel. Treasury made the strategic decision to manage the SWIFT architecture in-house rather than outsourcing to a service bureau in order to keep control of all the infrastructure elements involved in the efficient operation of the payments factory.

Next Page   2 3 

Save PDFs of your favorite articles, authors and companies. Bookmark this article, or add to a list of your favorites within mytmi.

Discover the benefits of myTMI

 Download this article for free