At the recent infiniance client event “Streamlining of Financial Processes” on November 29th at Børsen in Copenhagen, Per Hjorth Poulsen, VP Group Treasury & IR, presented the voyage Vestas has just finalised in establishing a global in-house bank and payment factory.
As part of Vestas’ new overall vision, several strategic objectives were defined, which trickled through the organisation to Group Treasury, with an objective to establish “Efficient Treasury Solutions”. To carry out the vision, Vestas started on a project in 2015, with the purpose of establishing a global in-house bank. This solution required all their major cash management banks to support POBOs (“payments-on-behalf-of”) as well as PINOs (“payments-in-the-name-of”), where the latter is used in regions where POBO’s are not possible due to regulatory restrictions. At the same time, Vestas underwent a restructuring of their banking setup with the objective to use as few banks as possible – if possible one bank for each region – and reduce the number of external bank accounts.
As Vestas was already using the SAP ERP and Treasury Management Solution, it was decided to implement SAP In-house Cash (IHC) and SAP Bank Connectivity Manager (BCM) with the help of infiniance.
A project organisation was established across functions, covering business, IT and external resources, each lead by their own project manager, reporting to the central steering group. The steering group encompassed the main sponsor – Per – as well as representation from infiniance and Senior Management of impacted departments.
The envisioned benefits achieved by implementing the new solution included:
After a relatively short implementation period of just 18 months, the final parts of the global solution are expected to go-live in December 2016, after which the expected benefits will be validated.
Overall, the project went well, however, as always there were some key learning points, that Per shared with the audience:
- Involve Legal and Tax early on to ensure cash pooling and in-house banking is allowed in the regions you operate
- The Steering Committee should compromise all key members, including representation from the master data team, which is an integral part of any SAP project
- Get a strong project manager from each participating bank with previous in-house bank experience, who will take ownership and manage all moving parts
- Ensure your team of external consultants have experience with the concrete task
- The Bank Project Manager should have a clear responsibility for tasks such as account opening, documentation, coordination within the bank etc. allowing the PM from the Business to focus on the internal tasks – “Get the banks to do the work!”
- Education and information is key to get the key users and subsidiaries properly on-boarded – involve and engage to ensure buy-in on the solution
- and practically: Open any new bank accounts prior to the actual technical implementation
For more information on implementing an in-house bank and payment factory, please contact infiniance today:
Managing Partner, Principal Consultant
Telephone: +45 3086 0082