Best Risk Management Solution Highly Commended: Huawei Technologies
Published: Jan 2015
Photo of Lawrence Chenpeng, Huawei Technologies.
Founded in 1987, Huawei is an entirely employee-owned private company and a leading global information and communications technology (ICT) solutions provider with a vision to enrich life through communication. Through the company’s 150,000 employees and dedication to customer-centric innovation and strong partnerships, Huawei has established end-to-end capabilities across the carrier networks, enterprise and consumer markets by providing competitive solutions and services, which have been deployed in over 170 countries and regions, serving more than one-third of the world’s population. In 2013, Huawei recorded revenue of CNY 239,025m, an increase of 8.5% over the previous year (*in USD the revenue is 39,463m, up 11.6%), and net profit amounted to CNY 21,003m (*in USD 3,468m).
An end-to-end solution to improve efficiency, enhance system controls and minimise risks
Huawei’s treasury technology transformation project is a great example to showcase the benefits of using a single standardised global platform for multibank connectivity which provides the security, scalability and flexibility that multinational corporations require. It also demonstrates industry best practices in banking and connectivity. Huawei’s new technology infrastructure, supported with an efficient organisational structure and business processes, has paved the way for further adoption of the technology by corporates and banks across Asia.
The challenge:
Huawei’s global expansion has resulted in greater complexity in its internal treasury technology and bank connectivity requirements. As such, the company decided to embark on a treasury technology transformation project. In particular, the Huawei team defined the following objectives for this:
Centralise payments through a global payments hub.
Achieve visibility and control over all accounts globally.
Enhance efficiency of internal cash and treasury management processes.
Improve quality and timeliness of reporting.
Automate payment and reconciliation processes.
Streamline bank communication through a single, robust channel.
Standardise payment formats and documentation across partner banks.
The solution:
With such a wide remit, the team at Huawei deployed a number of solutions in order to reach all of the project’s objectives. These solutions included:
Using a single channel for multi-bank connectivity. Payments are transmitted using SWIFT’s file transfer mechanism, FileAct (for batch payments) and the majority of payments (including supplier payments) are conducted through FileAct. Global bank account balance and transaction reporting is also obtained daily through FileAct.
Standardised message formats for payments and account statements based on ISO 20022 XML formats (XML) are used.
Integrating a treasury management system (TMS) for treasury and cash management with the group ERP.
Best practice and innovation:
Huawei’s treasury technology transformation project is a great example to showcase the benefits of using a single standardised global platform for multibank connectivity which provides the security, scalability and flexibility that multinational corporations require. It also demonstrates industry best practice in banking and connectivity. Huawei’s new technology infrastructure, supported with an efficient organisational structure and business processes, has paved the way for further adoption of both XML by corporates and banks across Asia.
“With a growing number of banking connections, different channels and various proprietary formats, Huawei was looking for an end-toend solution to improve work efficiency, enhance system controls and minimise operational risks,” concludes Huawei’s, Treasury Manager.
Key benefits:
Using SWIFT as the single standardised global platform brought the following benefits to Huawei:
A cost-effective solution to lower ongoing maintenance, connectivity and integration costs.
Greater work productivity to manage increased volumes and complexity without adding further resources.
Enhanced system controls to meet compliance requirements.
Increased scalability and flexibility to support Huawei’s global expansion.
Bank independence to enable banking partners to be selected based on the quality of solutions and service in each location.
Greater visibility and control over global cash positions to manage liquidity at a group level.
Enhanced ability to centralise and streamline processes, eg management reporting, financial decision-making, working capital optimisation.
The Adam Smith Awards Asia is the industry benchmark for best practice and innovation in corporate treasury. To find out more please visit treasurytoday.com/adam-smith-awards-asia
