Published: May 01, 2008
GasTerra and Deutsche Bank: Finding New Cash
GasTerra’s cash management needs are focused around high value domestic and foreign payments. A Deutsche Bank solution sought efficiencies through automating processes while increasing system stability and security.
A Deutsche Bank solution sought efficiencies through automating processes while increasing system stability and security.
GasTerra, the Dutch energy trading company, was formed when Gasunie, the Dutch natural gas provider, spun off its trading business in 2005. Originally known as Gasunie Trade & Supply, the shortened name was adopted from September 1 2006 as the final stage in the separation of the two companies. GasTerra has a significant share of the Dutch gas market and also operates on the European energy markets. It is 10% owned by the Dutch state, 40% by Energie Beheer Nederland, 25% by Esso Nederland and 25% by Shell.
“After the split from Gasunie in 2005 we recognized that there was a need to upgrade our cash management and general treasury capabilities, but felt that we should wait for the optimal moment to do this,” says Jan Bruintjes, Treasury Manager at GasTerra. “Early in 2006, our former banking partner was implementing a new release of their cash management systems. Given the potential disruption that this would have caused, we saw that this represented a good opportunity to re-evaluate our treasury systems and banking relationships.”
The company put out a Request for Proposals (RFP) detailing its cash management and treasury needs. Five separate banks presented, before GasTerra settled on a shortlist of three.
“Each bank was assessed on the basis of 24 separate criteria,” says Bruintjes, “with the most important being system security and stability, the ability to provide same-day value for all domestic payments and the scope for an intra-day financing facility as well as year-end financing. Other considerations included deposit facilities and interest conditions.”
The whole RFP process took around six months, and Deutsche Bank began implementing the new system in early 2007. “Deutsche Bank’s offering impressed us greatly - not just in terms of their solutions matching our criteria, but in terms of the depth of expertise and the quality of their advisors,” says Bruintjes. “We also had the opportunity to speak to several long-standing Deutsche Bank cash management clients who all reported favourably on the service. However, their ability to interface seamlessly with our SAP EDI [Electronic Data Interface] system was also a key selling point.”
The company’s previous system involved a great deal of manual entry for authorizing payment files, at an additional expense. Meanwhile, the new platform offered a high degree of automation and Straight Through Processing (STP).
“Although our previous provider had offered to construct an automated system for us,” says Bruintjes, “we felt that using Deutsche Bank’s tried and tested db-direct internet platform would afford us greater stability and security.” [[[PAGE]]]
The automated file transfer process on DB’s db-direct connect platform follows several stages that can be integrated into one batch run for full automation. In the first step (see fig. 1-1), a payments file is created by GasTerra - in this case in SAP using IDoc . Then (fig. 1-2) the file is transferred to db-direct connect (via Biz Talk server) using one of the supported SSL-based protocols. Authentication and authorization checks are then performed (fig. 1-3) and the payment file is passed to db-direct internet. Within GasTerra a ‘4 eyes principle’ is required, meaning two authorized persons sign the payment file within db direct internet. db-direct internet performs the necessary processing and passes the file (fig. 1-4) for further authorization and authentication checks.
GasTerra's cash management and treasury needs are dominated by high value domestic and foreign payments.
The results of the processing are written to a PDF file, which is passed back to GasTerra using email or a host-to-host (H2H) system, while the transaction is forwarded for back office processing (fig. 1-5) and ultimately onto the appropriate clearing system for settlement (fig. 1-6).
Another important feature is the MD5 hash calculation in both systems. GasTerra was used to comparing hash values of, for example, a Dutch clieop file with the hash value generated in the payment system in order to ensure file integrity. It should be clear that db connect itself offers various features to ensure data security, integrity and authentication.
However, GasTerra required a similar feature with Deutsche Bank. With offering a more complex hash calculation based on MD5 algorithm, Deutsche were able to implement on the one hand a similar process but also at the same time a much more secure and complex hash calculation based on MD5.
This means that after file creation within SAP a MD5 hash is calculated on SAP side. By uploading the IDOC file into db direct internet another MD5 hash is calculated in db direct internet. By displaying the MD5 hash in db direct internet, it is very easy for GasTerra to check if the file generated in SAP is still the same displayed in db direct internet. [[[PAGE]]]
“The new system is incredibly efficient,” continues Bruintjes. “After the payment files have been uploaded, the process is fully automated and previous concerns about stability and security under our old arrangements have now been largely mitigated.”
GasTerra’s cash management and treasury needs are dominated by high value domestic and foreign payments. In this respect, Deutsche Bank’s SAP IDoc integration and file transfer solutions are ideal:
The system offers integration with a number of proprietary and non-proprietary standards, in GasTerra’s case with SAP’s IDoc. And though the solution put in place for GasTerra offers fully automated file transfer, semi-automatic and manual options are also available as a failsafe (see fig. 3).
“The ease of use and functionality of the Deutsche Bank platform also compares favorably to our previous IT environment,” says Bruintjes. “The web-based platform - compared to our previous payments server - allows for a customizable front end and several steps that were previously very time consuming can now be skipped.”
The new solution has also afforded a degree of future-proofing. “We are now ready for the changes that will come with full SEPA [Single Euro Payments Area] implementation and confident that the system’s functionality can be easily expanded to incorporate any future challenges,” adds Bruintjes.
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