By using IHC within South32, the number of external bank accounts are reduced, as well as the volume of foreign payments that need to be made. IHC at South32 supports Payment On Behalf Of (POBO), Receipt On Behalf Of (ROBO), Inter-company Netting and Cash Pooling.
The next step was to find a service provider for the implementation. South32 issued an RFP to a number of different service providers but ultimately adopted a specialist approach, appointing IHC specialists from Covarius to deliver IHC as an independent project.
"We came to Covarius because we knew the consultants and we knew that they had a strong, specialist reputation," Ian Walford explains. "Another consideration was that whilst our treasury is based in Perth, our key IT functions are based in Johannesburg. Covarius’s South African operation meant that we could leverage this specialist resourcing on the ground in South Africa without the need for work permits. This crucially meant that the IHC project could be well-supported in Johannesburg and get up and running quickly and efficiently."
Initially, South32 had planned on using internal resourcing for critical elements of the project such as SAP enhancements and custom ABAP developments for SAP In-House Cash. However, it was quickly realized that specialized expertise would be required with respect to these enhancements and Covarius were asked to provide expert resourcing in this regard.
In order to deliver expected benefits on-time and against anticipated value, South32 was looking for an aggressive time-line focused scope and robust design. "This was purely an IHC pay-on-behalf and receive-on-behalf implementation," explains Ian Walford. "Many businesses use IHC as an opportunity to revamp their cash management processes. We didn't do this as we already had an optimised cash management structure in place."
With the scope and end-benefits of the project clearly defined, all delivery teams, both internal and external, were able to follow a tight timetable.
Prior to the initiation of the project, it became clear that certain obstacles would need to be overcome during the course of the implementation. The first of these obstacles included additional infrastructure work that would need to be delivered by South32’s internal IT team in order to put in place a suitable test environment. The second of these obstacles emanated from the ERP environment itself, which was more complex than originally first anticipated due to the high levels of enhancements and customisations in place.
Nevertheless, South32 were able to adopt the project within a very tight timescale. One of the key pillars that permitted progress to fair as smoothly as possible on the project, was the regular engagement with key stakeholders driven by the treasury team in Perth throughout the project. This consisted of regular meetings, specialized working groups and conference calls.
"The key stakeholders from our perspective were not just treasury and finance, but also our shared service centre in Johannesburg," says Ian Walford. "Having Covarius based in Johannesburg helped a great deal in this respect, particularly when it came to functional testing, data load testing and cutover rehearsal."
The net success of the South32 IHC project, is not only a project that was delivered on time and under budget for a large scope, but also in the top tier of successful rapid implementations of SAP IHC globally. Put into perspective, similar projects of this scope and scale, take upwards of 12 months to deliver at nearly double the resourcing cost incurred by South32.
"The key was that the consultants knew the product – and our business – extremely well," comments Ian Walford. "Also critical to the project’s success was continuous engagement by treasury Perth with key stakeholders to bring them along the journey." Instead of making assumptions, the treasury team made sure the business was engaged throughout the project, from design all the way through to deployment.
As a result, the business sign off was straightforward and considerable benefits are already being realized within South32, notably:
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