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Microsoft Corporation: SWIFT Progress 2005-2009 Since 2006, we have been pleased to present an evolving case study of Microsoft Corporation illustrating how the implementation of SWIFT has developed. In this feature, we take a snapshot of progress at three points: 2006, 2008 and 2009, and we are delighted to talk once again with Ed Barrie, Group Manager for Treasury, Microsoft Corporation. Microsoft Treasury, based in Redmond, Washington is a centralised operation responsible for all elements of cash management, FX, corporate finance, risk management and credit and collections. The company has around 100 banking partners and 1,000 accounts of which 400 are managed by treasury. Seven staff manage the Treasury Operations and four manage the subsidiary Cash Planning function. Microsoft started a project in 2005 to consolidate and streamline its back-office cash management operations using SAP, which is used throughout Microsoft. This included bank communication, payments, bank account reconciliation, FX transactions and creating an in-house cash centre to manage intercompany transactions and subsidiary funding.

Microsoft Corporation: SWIFT Progress 2005-2009

by Helen Sanders, Editor

Since 2006, we have been pleased to present an evolving case study of Microsoft Corporation illustrating how the implementation of SWIFT has developed. In this feature, we take a snapshot of progress at three points: 2006, 2008 and 2009, and we are delighted to talk once again with Ed Barrie, Group Manager for Treasury, Microsoft Corporation.

Microsoft Treasury, based in Redmond, Washington is a centralised operation responsible for all elements of cash management, FX, corporate finance, risk management and credit and collections. The company has around 100 banking partners and 1,000 accounts of which 400 are managed by treasury. Seven staff manage the Treasury Operations and four manage the subsidiary Cash Planning function. Microsoft started a project in 2005 to consolidate and streamline its back-office cash management operations using SAP, which is used throughout Microsoft. This included bank communication, payments, bank account reconciliation, FX transactions and creating an in-house cash centre to manage intercompany transactions and subsidiary funding.

2006

The global SAP cash management implementation was the starting point for a project to implement direct SWIFT connectivity through MA-CUGs, which is achieved using Microsoft’s own BizTalk Server and Microsoft BizTalk Accelerator for SWIFT. Six pilot MA-CUGs covering 100 bank accounts went live initially in October 2006, with the aim of connecting with nearly 30 banking partners covering close to 90% of its bank accounts via SWIFTNet by June 2007. Prior to this, Microsoft Treasury did not have daily electronic visibility over these accounts and had hundreds of users across the company accessing numerous third-party banking applications with their associated direct and indirect costs. There were also problems with consistency of security across the various banking systems in a widely disbursed organisation.

Six pilot MA-CUGs covering 100 bank accounts went live initially in October 2006, with the aim of connecting with nearly 30 banking partners covering close to 90% of its bank accounts via SWIFTNet by June 2007.

The key project objective was to retrieve bank statement information (MT940) from their partner banks, which will ultimately be extended to include intra-day statements (MT942) for the relevant bank accounts and also payment messages (MT101). Microsoft also recognised at an early stage the significant value in the emerging XML messaging for bank statement retrieval, not necessarily from a cash position and balance perspective, but for detailed bank reconciliation purposes as data can be more effectively mapped to the business application.

As Ed Barrie, Group Manager for Treasury, Microsoft Corporation explains,

“We implemented a connection to SWIFT because we wanted to spend less time managing transactions and more time managing our assets. This is a paradigm you can extend across the business. You can’t view SWIFT in a vacuum, nor is the SWIFT project restricted to treasury. It has to involve all the stakeholders who interact with the banks and the banking data. For us, as well as the benefit of replacing some of our banking workstations, the value of SWIFT has been in the context of a wider re-engineering project and the added value we can gain from the network in the future.”

2008

Two years on, we asked Ed Barrie about the progress which Microsoft Treasury has made:

We have made significant progress in our use of SWIFTNet over the past two years, and it is now our primary communication channel with our banks. Only two of our primary banking partners have not yet migrated to SWIFT services, but we are now connected to 20 banking partners for prior day statement reporting and four banking partners for intraday statement reporting via SWIFTNet. We are in the process of on-boarding five more partners and expect to on-board an additional 15+ partners through the remainder of this year.

Two years ago, XML messages via SWIFT were barely a twinkle in the eye, but today, we are piloting XML ISO 20022 messages with two of our primary banks (Bank of America and Citi) which will involve receiving statement information via FileAct using the new CAMT XML format. As part of this process, we are comparing the data we are receiving via SWIFT with MT940 and 942 messages, and the data presented through the banks’ proprietary channels, to ensure that we are capturing all the information which is available on a transaction. We are also looking at the mapping of the statement data into SAP using Microsoft BizTalk Server and the BizTalk Accelerator for SWIFT. We are also reaching out to our other primary banking partners to determine their readiness for ISO 20022 messaging support.

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