Published: October 25, 2010
Neopost has a centralised approach to cash management through its holding company, although payments and collections are conducted locally. Balances are swept daily using zero balancing cash pools in five countries. Although the company has a small number of core banks, it has ten cash management banks to deal with local collections such as cheques.
In 2008, we made the decision to review our treasury technology and connectivity, which was not harmonised across the Group at that stage. We recognised that with the approaching migration to SEPA (Single Euro Payments Area) and the termination of ETEBAC, which was our communication protocol with our banks, we needed to find a way of harmonising, integrating and optimising our technology infrastructure. We decided that a new TMS (treasury management system) integrated with SWIFTNet would meet both our central and local cash management needs and reduce our IT overheads. There were a variety of reasons for selecting SWIFTNet:
Firstly, we would be able to connect with our various banking partners through a single channel;
Secondly, it provided the level of security that we were seeking;
Thirdly, and very importantly, as any file format can be transmitted through FileAct (file transfer mechanism through SWIFTNet), we would not need to make changes to our ERP or amend file formats initially.
We first approached Societe Generale and our other key banking partners about the feasibility of implementing SWIFTNet, to ascertain their SWIFT capabilities, and the likely costs and implementation effort. We also explored the alternatives for connecting to SWIFTNet, in particular the decision as to whether to connect directly or indirectly through a service bureau. We soon decided to connect through a service bureau, as we did not have the human or financial resources to support a direct connection.
In parallel, we issued an RFP (request for proposal) to key TMS suppliers. Based on an extensive evaluation process, we chose Kyriba. As the solution is delivered using a software as a service (SaaS) model, we did not have to involve our IT team a great deal. Furthermore, thanks to the Kyriba offer which is directly an all in one offer with a third bank service bureau, we could work with a single supplier.
In June 2009, we finalised our agreement with Kyriba and started on the implementation. At the same time, we embarked on the SCORE (Standardised Corporate Environment1) documentation process with our banks, which we completed in October 2009. We also engaged in a test phase of the project and were able to exchange live files for two entities with seven banks in France in November 2009. Since then, we have extended SWIFTNet connectivity to a further five entities in France.
Between the first agreement signed with Kyriba, in June 2009, and the final ‘go live’ with seven banks in November 2009, only five months passed: it’s a fantastic achievement. [[[PAGE]]]
Societe Generale is a key banking partner for Neopost, and the bank has been a key participant in the project from the start. We have had a close relationship with Societe Generale since 1992, in both Europe and the United States, and we recognised early on that the bank had particular expertise and experience in supporting SWIFT Corporate Access. We were also impressed by Societe Generale’s contribution to enhancing corporate services through SWIFTNet, such as electronic signatures, financial messaging standards and piloting new solutions. Societe Generale was able to provide considerable expertise and resources throughout the project, and was highly responsive to our needs.
As we implemented a little earlier than other companies seeking to replace ETEBAC, we were fortunate in being able to rely significantly on the resources and expertise provided by both Kyriba and our banks to ensure project success. We appointed a dedicated project team, and adopted a disciplined approach to implementation, including regular status meetings and project updates.
The most considerable challenge was completing the SCORE documentation process with our banks, which required a great deal of information to be recorded, including all accounts, banking services and details of mandates between each of our subsidiaries and the holding company. Based on our experiences so far, we would particularly highlight this issue to other companies contemplating a similar project, and the time taken to complete this process should not be underestimated. On the technical side, however, we found that our TMS/service bureau provider and our banks were able to offer plenty of advice and support. The solution has now been live for ten months. I can say that banks are now fully equipped to deal with SWIFTNet in France, and the service is working perfectly. [[[PAGE]]]
We have been very satisfied with the project and we have achieved our objectives. In particular, the TMS, SWIFTNet connectivity and support we have received from our banks for SWIFTNet access have all been proved very successful. Our bank relationships have been enhanced, and communicating through SWIFTNet as opposed to using banks’ proprietary tools is working very well. We are currently retrieving bank statements through SWIFTNet and transmitting payments, including direct debits, wire transfers etc.
Having implemented Kyriba and SWIFTNet in France, the next step will be to roll out our project in the United States, followed by other European countries. In addition, as we decided to implement the new treasury technology infrastructure before migrating to SEPA, to avoid too much project complexity, SEPA migration will be an important future project phase. As part of this project, we will need to change our file formats produced from our ERP to the XML-based ISO 20022 financial messaging standards, and update our supplier and customer database with BIC and IBAN information. We will also need to resolve some issues with respect to SEPA Direct Debit mandates. However, based on our experiences with the project so far, and the strong relationship with Societe Generale and other partner banks, we are confident that our SEPA migration will be similarly successful.
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