Published: September 19, 2011
Coca-Cola Hellenic (’CCH’) was formed in 2000 as a result of the merger of the Athens-based Hellenic Bottling Company and the London-based Coca-Cola Beverages. Since then, we have become one of the largest Coca Cola bottling companies globally with annual revenues of €7bn and a territory extending across 28 countries from Ireland to eastern Russia, serving the needs of over half a billion people. As the company expanded its geographic footprint, our banking partners multiplied, leading to fragmentation of cash flows, account information and connectivity, and a lack of standardisation. Consequently, in addition to enhancing our liquidity management through increased use of cash pooling techniques, we made the decision to standardise and rationalise our bank connectivity, in order to enhance security and compliance, improve ease of maintenance and reduce costs.
We are currently undertaking a major multi-year project to roll out a single SAP platform across the group, which will be completed by 2014. We recognised that this was an ideal opportunity to enhance centralisation, standardisation and efficiency in treasury. Until two years ago, treasury was not part of this initiative; however, it made business sense to align our objectives with those of the overall SAP rollout. We therefore decided to upgrade our SAP Treasury installation and connect to SWIFTNet in order to create a single, global gateway for all of our subsidiaries to connect to their banks. In addition, we wanted to set up an in-house bank to enable treasury to provide centralised FX and liquidity services to the group. We presented the business case for all three elements of our project in November 2009: the SAP installation; SWIFT connectivity, and an in-house bank. This was accepted, so we proceeded with defining detailed objectives and project tasks.
At the start of the project, firstly, it was important to align our project steps with those of the overall SAP project. Secondly, we did not have the appetite for direct SWIFT connectivity, so we needed to appoint a service bureau. We had only a limited time to make a selection, but we went through a careful process and ultimately selected BBP in Switzerland on the basis of their quality of service, technical resilience and experience connecting to SAP. The latter point was particularly important as we could leverage BBP’s expertise derived from working with corporates with comparable business and technical needs, therefore reducing our project risk.
We decided to connect SWIFTNet in order to create a single, global gateway for all of our subsidiaries to connect to their banks.
We opted for a phased approach for implementing SWIFT connectivity. We first set up treasury payments at headquarters level with one bank, Citi. Once we had proved the concept, we could then roll the solution out more widely with lower risk and greater credibility. Adopting this approach has meant that any project challenges were minimised and more manageable. A key consideration was to co-ordinate the major players in the project, each of whom had a major role to play. For example, it was crucial to bring IT into the project early, not least to ensure that our security and compliance objectives would be achieved. The same applied to the relevant bank personnel. We found that it was not always easy to identify the right resources within the bank who had the necessary experience with SAP, but to do so was essential. So too, we needed to engage service bureau personnel, who then worked closely with our consultants and internal and bank colleagues to progress the project. Timing was very precise throughout, not only due to our internal project constraints, but also as it is only possible to go live on SWIFTNet on one day each month; therefore, had we missed our initial timescales, we would have had to wait a further month. [[[PAGE]]]
We have now rolled out SWIFTNet to seven countries and we are in the process of implementing a second bank. Ultimately we will extend use across all of our countries of operation in conjunction with the SAP rollout, and all of our banks. In addition, we are establishing a Financial Shared Services Centre that will, amongst other activities, centralise our accounts payable function, which will further enhance our efficiencies in the payment area. We are using SWIFTNet to make payments, using both SWIFT message types and XML ISO 20022, and for retrieving bank statements. Most recently, we have extended our use of SWIFTNet to exchange MT300 messages for treasury deal confirmations interfacing directly with SAP, which in time will enable us to replace our proprietary confirmation matching system.
Finding the right people, and aligning their objectives and availability is essential.
The outcomes of the project so far have been very positive. Firstly, by implementing a standardised SAP and SWIFTNet infrastructure, we are achieving the standardised approach across the group that we were seeking. Secondly, we have transferred our payment approval process which now takes place entirely within the SAP environment, which provides greater control and transparency over the approvals process, as well as enhancing straight-through processing as users no longer have to log onto a separate banking system to approve payments. In this way, the project is very successfully achieving our security and compliance, operational and cost objectives. Based on the success so far, we will extend our use of SWIFTNet to commercial payments as well as exchanging our in-house banking flows through the network. Consequently, SWIFTNet will ultimately be the financial messaging hub for CCH for both external and internal flows.
Based on our experiences to date, we would emphasise the importance of a clear timeline for the project, and the need to co-ordinate resources appropriately. Implementing SWIFT connectivity, particularly when combined with other project objectives, is complex, so finding the right people, and aligning their objectives and availability, is essential. For us, starting small and then rolling out a proven concept, as opposed to trying to implement all at once, has been a very successful approach. We have been able to demonstrate the credibility of SWIFTNet in achieving our bank connectivity objectives, and illustrated to subsidiaries the benefits of full end-to-end SAP integration.
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