tm5 and Payments at L’Occitane: A True Story
by Martin Bellin, Founder and Managing Director of BELLIN, Samuel Antunes, Group Treasurer at L'Occitane and Marion Barré, Treasurer & Treasury Systems Specialist at L'Occitane
The L’Occitane Group is a global natural and organic ingredient-based cosmetics and well-being products manufacturer and retailer with strong regional roots in Provence, France. The Group has five brands in its portfolio and is committed to developing and retailing high-quality products with traceable origins and respect for the environment. Today, the company employs more than 7,000 people in over 2,300 boutiques worldwide and generates sales of over €1bn.
A treasury challenge with several goals
To support the rapid growth of L’Occitane Group, the treasury department identified the needs and decided in 2010 to implement a new treasury management system. The goal was simple but challenging – to improve and simplify the day-to-day cash management process for both the central treasury team and all subsidiaries of the group.
As a multinational company, it was particularly important for L’Occitane to bring together the global financial information from all companies of the group on a single platform and to provide a unified payment solution to all the subsidiaries. To achieve this goal, the new system needed to be a fully integrated solution that could be used by all L’Occitane subsidiaries worldwide.
At the same time, the new treasury management system had to cover a full range of treasury functions, from daily cash management to international payments. It was an ambitious project, as L’Occitane has more than 40 subsidiaries in over 30 countries and the payment processes involve more than 40 banks worldwide and this in over 20 different payment formats. In a nutshell, they required a system that could handle transactions in four different dimensions, i.e. multi-country and multi-bank processing of both domestic and cross-border payments.
L’Occitane had a requirement – ‘keep it simple’ – and a wish: to spread the treasury team’s passion for their work to all the subsidiaries.
The decision for BELLIN’s SWIFT connection
Considering all these requirements for the new treasury management system, and after an extensive selection process, L’Occitane made two important decisions.
First, L’Occitane selected tm5 by BELLIN as the treasury management system. Samuel Antunes, the Treasurer at L’Occitane, explains: “What convinced us was the user-friendly interface of this fully web-based application. It enables us to localise it perfectly to all our teams around the world. It’s a system made by treasurers for treasurers. That’s what we really like.”
The second important decision was the one regarding bank connectivity. L’Occitane expected to have one reliable communication system for all banks which adheres to the highest security standards. Based on this, they chose SWIFT.
The implementation planned and organised
The headline of L’Occitane for this project was ‘Standardisation, Automation and Performance’.
The payment files are generated by SAP (for bulk payments) and sent to tm5 automatically. Since tm5 is hosted for L’Occitane in the data centres of BELLIN, the secure and immediate transfer of files is facilitated by one of the integrated tm5 services. In tm5, users verify, authorise and then send the payments to the bank via SWIFT. Banks transmit account statements to tm5 via SWIFT, and tm5 exports them to SAP in the appropriate format (MultiCash).
As the treasury headquarter team’s resources for this project were limited, the project leader had to coordinate the different stakeholders as efficiently as possible. Here is a highlight of the segregation of tasks between parties involved:
- The subsidiaries defined their needs and provide test files and test users.
- L’Occitane defined the format requirements and connectivity with the local banks.
- The L’Occitane SAP team set up the formats.
- The BELLIN team provided advice and feedback on general treasury topics and configured the system. They initialised banks and supported the formats as well.
The implementation timeline was very tight. In 2011, the system was implemented for L’Occitane International (the headquarters), France and Benelux, followed by Spain, Italy and Hong Kong in 2012. In 2013, they completed the UK, Germany, Poland, the US, Canada and Japan. Another important milestone was met in 2013: L’Occitane achieved their goal of being SEPA-ready by the end of the year!
The use of tm5 by the subsidiaries was of particular importance for L’Occitane. There is no policy in place which would force them to use the payment processing application provided by the central treasury. In each case, the treasury team took time to present the possibilities to local management and convinced them of the advantages of this approach over the processes in place.
There are still subsidiaries in different countries which have not been connected by end of 2013. Brazil, China and Switzerland will go live in 2014, and Australia and Korea will follow in 2015.