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ROUNDTABLE: PAYMENT FACTORY
Participants
Hervé LAMY, , Head of Treasury Operations
Francesco CUCINELLI, Treasury Operations Group Manager
Markus Seemater, Senior Treasury and Cash Management Consultant, UBS
Nicole SIBILLE, President & Chief Executive Officer Hubert GOGNIAT, , Project Manager
Moderator: Sebastian DI PAOLA,
Partner, in charge of Corporate Treasury Solutions
Givaudan Payment Factory ACTSR Roundtable – January 2013
4
440’000 payments per year exceeding
CHF 70 Bln.
< 1,5%
failure
> 2’000
payment
runs
KEY FIGURES
2 global banks covering
95%
of the Group’s cash-flow through
9
cash poolings and
350 accounts for an automatic cash
concentration close to
80%
98%STP
18 people serving
30 entities from
4 Centres
54% automatically
settled on a daily
basis
46% to 3rd of
which 58% on
behalf
5
The Treasury Journey
When Givaudan decided to change it’s ERP in 2007, the treasury function was governed centrally but was
operating locally with multiple banks, systems, formats and processes. Decision was then taken to centralize
/ regionalise treasury operations through an In-House Bank concept.
2008
2010
2009
2011 / 2012
4 cash pools live in Europe. The legal and fiscal structure to host the In-House Bank is established. A new
treasury team joined Givaudan. The SAP Treasury Risk module is live
The SAP IHC module has been implemented. The payment factory is live covering Switzerland / France / UK
/ Germany / Netherlands / Financial holdings
The Regional Treasury Centers NOAM and Latam are established. USA / Canada / Mexico have joined the
payment factory. 2 additional cash pools have been implemented and one has been transferred from
Deutsche Bank to Citi. These 2 banks now covers more than 75% of our cash flow.
The solution is rolled out in Asia.
1- Improve security, continuity, accuracy 2 - Increase automation
3 - Increase transparency 4 – Implement new formats 2013 ….
2000 - 2007
6
Banking Structure
• 2 global banking partners managing a region and specific currencies
• 3 Global cash pools (USD / EUR / CHF)
• 6 Local cash pools (CAD / MXN / GBP / HUF / JPY / SGD)
7
Treasury Organisation – The Global View
A Central Team.
9 people managing the Group’s
liquidity and currency risk, the
payment factory for Europe and
NOAM, the In House Bank, the
banking domains, the technical
solution
Regional Treasury Center APAC
2 people managing the payment factory in
the region, providing payment services to
local affiliates in restricted countries and
supervising the local treasury hubs in
China and India
Regional Treasury Center
NOAM.
3 people supporting the
Central Team in the region
_____________
Regional Treasury Center
LATAM.
4 people acting as a treasury
shared service center for
Latam
8
Data Providers
Givaudan Affilates
The Technical Overview
Givaudan IHB Banking World
FULLY AUTOMATED SOLUTION BASED ON
• ONE SINGLE INSTANCE (SAP)
• PROPRIETARY BANKING PLATFORMS
• INTERFACES WITH SERVICE AND DATA PROVIDERS
9
Payment Factory Driving Principles
Order Management
Operational performance
indicators
Business Continuity
Plan
Service level agreements
Centralisation and
Automation
Liquidity
Security Yield
Move from the classic treasury approach….. …..To a Shared Center approach
Givaudan Payment Factory ACTSR Roundtable – January 2013
11
440’000 payments per year exceeding
CHF 70 Bln.
< 1,5%
failure
> 2’000
payment
runs
KEY FIGURES
2 global banks covering
95%
of the Group’s cash-flow through
9
cash poolings and
350 accounts for an automatic cash
concentration close to
80%
98%STP
18 people serving
30 entities from
4 Centres
54% automatically
settled on a daily
basis
46% to 3rd of
which 58% on
behalf
12
The Treasury Journey
When Givaudan decided to change it’s ERP in 2007, the treasury function was governed centrally but was
operating locally with multiple banks, systems, formats and processes. Decision was then taken to centralize
/ regionalise treasury operations through an In-House Bank concept.
2008
2010
2009
2011 / 2012
4 cash pools live in Europe. The legal and fiscal structure to host the In-House Bank is established. A new
treasury team joined Givaudan. The SAP Treasury Risk module is live
The SAP IHC module has been implemented. The payment factory is live covering Switzerland / France / UK
/ Germany / Netherlands / Financial holdings
The Regional Treasury Centers NOAM and Latam are established. USA / Canada / Mexico have joined the
payment factory. 2 additional cash pools have been implemented and one has been transferred from
Deutsche Bank to Citi. These 2 banks now covers more than 75% of our cash flow.
The solution is rolled out in Asia.
1- Improve security, continuity, accuracy 2 - Increase automation
3 - Increase transparency 4 – Implement new formats 2013 ….
2000 - 2007
13
Banking Structure
• 2 global banking partners managing a region and specific currencies
• 3 Global cash pools (USD / EUR / CHF)
• 6 Local cash pools (CAD / MXN / GBP / HUF / JPY / SGD)
14
Treasury Organisation – The Global View
A Central Team.
9 people managing the Group’s
liquidity and currency risk, the
payment factory for Europe and
NOAM, the In House Bank, the
banking domains, the technical
solution
Regional Treasury Center APAC
2 people managing the payment factory in
the region, providing payment services to
local affiliates in restricted countries and
supervising the local treasury hubs in
China and India
Regional Treasury Center
NOAM.
3 people supporting the
Central Team in the region
_____________
Regional Treasury Center
LATAM.
4 people acting as a treasury
shared service center for
Latam
15
Data Providers
Givaudan Affilates
The Technical Overview
Givaudan IHB Banking World
FULLY AUTOMATED SOLUTION BASED ON
• ONE SINGLE INSTANCE (SAP)
• PROPRIETARY BANKING PLATFORMS
• INTERFACES WITH SERVICE AND DATA PROVIDERS
16
Payment Factory Driving Principles
Order Management
Operational performance
indicators
Business Continuity
Plan
Service level agreements
Centralisation and
Automation
Liquidity
Security Yield
Move from the classic treasury approach….. …..To a Shared Center approach
Richemont Payment
Factories
ACT Roundtable 24th January 2013 Location : Geneva
Agenda
Definitions : Share Service Center/In-House Bank/
Payment factories
European Payment Factory Background
Advantages/Disadvantages
Architecture
ASIA Payment Factory Treasury Focus
Architecture
Next Steps Common Architecture
Definitions:
Backgroung of the European payment factory project
• Situation as of April 2004 - More than 30 payment centres, 14 different electronic
banking systems, more than 15 different payment formats used and maintained by
European entities.
• Single European Payment Area (SEPA) objective – a customer should be able to
execute any payment within the Euro area as easily and at the same cost as he
would in his existing domestic payment system
• SWIFTNET Network– improved level of controls and security
• SAP roll-out – payment factory will be part of the standard Gemini roll-out
• Cost reductions
Payment Factory Advantages / Disadvantages
Advantages
• Enhanced level of controls
and improved security (SWIFTNETWORK)
• Greater efficiency (STP
process)
• One interface with Gemini
• No more manual payments
and bank reconciliation
• Improved cash flow
management
• Is part of the standard
Gemini roll-out
Disadvantages
• Rigidity of payment
procedures (2 mass payments,
cut-off time for urgent payments
– 3 times/week)
• Difficulty to apply to entities
not on Gemini
European Payment Factory
Swiss entities
Italian entities
French entities
Holding Cos
RIS
A C
entr
al T
reas
ury
Benelux
ALS
Bank A/C
statement
Payment
files
Pa
ym
en
t S
ys
tem
- T
RA
X
Sw
ift
Se
rvic
e B
ure
au
Payments in CHF,
USD, Other ccy
Payments in EUR, GBP
Bank A/C
statement
Payment
files
Payment
files
- AP & IHC
RNE
Payment from one central location – RISA, Villars-sur-Glâne
For all European companies on Gemini / Easy
Following up harmonised policies & procedures
Using a unique channel of communication with all banks
100% of wire transfers, no more cheques
Payment “on behalf” from one central account per currency
Automated bank account reconciliations
SEPA compliance
Internal BA
statement
Internal BA
statement
Internal BA
statement
Internal BA
statement
Internal BA
statement
Internal BA
statement
Agenda
Definitions : Share Service Center/In-House Bank/
Payment factories
European Payment Factory Background
Advantages/Disadvantages
Architecture
ASIA Payment Factory Treasury Focus
Architecture
Next Steps Common Architecture
Version: 1.0 Creation Date: 04.07.2005 Last Change : 24/01/2013 15:36:13 Page: 24
Payment Factory – Treasury focus
• Bank accounts rationalisation – 1 bank account per legal entity per currency (for all types of payments and collections)
• Automate bank accounts reconciliation (FEBAN)
• Eliminate paper-based payments (checks)
• Rationalise frequency of payment runs (twice per month for mass payments) and reduce number of urgent payments
• Implement STP payment process =>
– minimise number of repairs
– maximise completeness & correctness of master data
– outsource file mapping and routing to HSBC
• Improve internal controls
• Minimise usage of local electronic banking systems and leverage Group systems and SWIFT network standards / tools
• Reduce payments fees (increase usage of Bulk payments)
Payment Factory – Asian Model
Richemont HK R
AP
L C
entr
al T
reas
ury
Bank A/C
statement
Payment
files
Pa
ym
en
t S
ys
tem
–
HS
BC
C2
SA
P
HSBC local bank accounts in the
name of each local legal entity
Bank A/C
statement
Payment
files
Payment
files
Richemont
Singapore
Richemont
Taiwan
Richemont
Malaysia
Richemont
Korea
Richemont
Thailand
Richemont
Macau
Richemont
China
Richemont
Australia
HSBC local bank accounts in the
name of each local legal entity
Agenda
Definitions : Share Service Center/In-House Bank/
Payment factories
European Payment Factory Background
Advantages/Disadvantages
Architecture
ASIA Payment Factory Treasury Focus
Architecture
Next Steps Common Architecture
27
Next steps: a common architecture BCM / SIPS with SSB
SAP ERP
F110 payment
program
↓
Payment medium
Workbench
↓
SAP PI
With
SIPS
SWIFT
Gateway
ATOS Worldline
XML XML XML
Richemont
SWIFT
Bank
XML
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