This solution allows for payments to be made on behalf of (POBO) each of the operating companies, and settled internally using the in-house bank module. Heerema initially anticipated high costs for the implementation, but found that the costs were more reasonable than expected and that the return on investment was high thanks to the optimal levels of efficiency that were achieved with this solution provided by Hanse Orga and SAP.
Photo of Jan Willem van Helden, Heerema Marine Contractors Nederland and Richard Arts, Hanse Orga.
Heerema Marine Contractors (HMC) is a world-leading marine contractor in the international offshore oil and gas industry. HMC manages the entire supply chain of offshore construction, from design through to completion. Headquartered in Leiden, Netherlands, HMC also has offices in the UK, Singapore, Angola, Brazil, Mexico and the US plus several yards, thereby covering the regions of Europe, Asia Pacific, Africa and North America. The company has a turnover of more than €1bn per year.
in partnership with
In-house bank, payment factory and payments on-behalf-of deliver impressive results
As a globally leading company in its field, Heerema requires financial systems that are fit to handle international payments. To manage their accounts receivable, accounts payable and treasury processes worldwide, Heerema operates a shared service centre (SSC) in which all of these functions are centrally managed. The shared service centre also comprises a payment factory, enabling payments-on-behalf-of (POBO), and an in-house bank.
HMC’s objective was to automate AR/AP and treasury processes in its SSC, to eliminate manual payments in the daily processes and to achieve best practices both for their payments and treasury processes.
HMC enhanced its standard SAP applications with the help of the consulting services of SymQ – a company of Hanse Orga Group – and leveraged their existing SAP capacity by implementing Hanse Orga’s SAP-embedded payments solution FinanceSuite, of which the next generation is called FS².
FS² Payments offers an integrated payment optimisation feature that enables Heerema to retrieve payment files from their local systems (be it SAP or non-SAP), to split the payment files into individual payments, to route, cumulate, correct, format, and modify those single payments, to post them in the central ERP system (SAP) and in the end to convert the individual payments into new payment files of a dedicated payment format for approval and execution. Payments can be made on behalf of each of the operating companies, and settled internally using the in-house bank module.
Jan Willem van Helden, Corporate Treasurer explains, “For bank connection, we chose to implement SWIFT Alliance Lite and to connect this to SAP via Hanse Orga’s payment solution. The in-house working capital agreements are made on a standardised format at ‘arm’s length’, using an external benchmark interest rate. We implemented the payment factory by piloting three companies and then rolled out in additional countries as and when we required.”
Best practice and innovation
The payment factory of Heerema is now operational for some 95% of its flow, with Angola being the exception, leveraging secure and efficient payment processes across the company as a result of the standardisation of processes and executing POBO.
Optimising the standard SAP Treasury application with the support of SymQ helped Heerema achieve 100% straight through processing for their hedging process including intra-company hedging. As a result, Heerema has been able to eliminate operation risk of large hedge settlements and payment delays.
Heerema is a great example showing that not only supersize corporations can benefit from implementing state-of-the-art systems, but even some 50,000 payments a year generate a good business case for automating finance processes.
Heerema has implemented a unique approach, building on their existing SAP landscape and leveraging additional benefits as a result of Hanse Orga’s SAP-embedded payments solution enabling a powerful payment factory and in-house bank, connecting it globally to SWIFT.
Willem van Helden comments, “Considering the scale of the project, we initially anticipated high costs for the implementation, but found that the costs were more reasonable than expected and that the return on investment was high, thanks to the optimal levels of efficiency that we achieved.”
Good return on investment (ROI).
100% STP for hedging process.
POBO structure established.
Payment factory now handles 95% of payment flows.
Jan Willem van Helden
For the last nine years Jan Willem van Helden has worked with Heerema Marine Contractors (HMC), where he heads the corporate treasury department and works with the corporate strategy department. Besides upgrading the payment and intercompany loan environment to a SWIFT connected payment factory, he worked on diversification of HMC’s debt portfolio, under one LMA documentation, including the 2016 Green EUPP programme.