Photo of Graeme Middleton and Kevin Pinnegar, Honda Motor Europe.

This company most certainly harnesses the power of technology to drive the ‘Power of Dreams’. The solution includes SAP TRM, CM, BCM and SWIFT Alliance Lite2 – read how they delivered all this in less than six months.

The challenge

Honda Motor Europe’s (HME) treasury has, for a number of years, been underpinned by legacy payment platforms and an out-of-support SunGard Quantum TMS. With this legacy footprint, HME recognised the risk to its treasury environment and the need to take a significant stride towards modernising treasury, capitalising on modern treasury technology.

Kevin Pinnegar, Group Treasurer, HME, explains: “In order to achieve the vast transformation required, a scope-rich and functionality-diverse project portfolio, based on best of breed technology, was initiated.”

The key objectives were:

• To migrate to a new payments platform to reduce operational processing errors and achieve top-tier levels of straight through processing rates.
• To ensure necessary budgetary parameters were strictly adhered to.
• To achieve significant cost efficiencies by moving forward with a more integrated approach to treasury and Honda’s in-house banking business and technology processes.
• To solidify Honda’s investment in its Polish shared services centre and Belgian centre of excellence by delivering a technology platform that enabled further transposition of mission critical support and business functions to these centres.

“It is fantastic to receive industry recognition for the achievements the Treasury Team, including our chosen business partner Covarius, managed to realise. Raising the profile of Honda’s Treasury Team amongst our Peers is something I am very proud of, and hopefully we can inspire other Treasury Teams to follow a similar journey.”

The desired end-state included:

• High quality cash management information.
• A single cash forecasting solution for HME and branches.
• Reduced points of integration breakdown.
• Significant levels of process automation.
• A centralised master-data maintenance model.
• A better segregation of duties (SoD) model to support the shared services and centre of excellence models.
• Better payment service levels for treasury, finance, HR and supply chain functions.

The solution

HME chose:

• SAP Treasury Risk Management (TRM) as its treasury management system (TMS).
• SAP Cash Management (CM) as its group cash forecasting solution.
• SAP Bank Communication Management (BCM) for its payment gateway.
• SWIFT Alliance Lite2 for SEPA and non-SEPA payments channel infrastructure.

Consulting and technology solutions provider, Covarius, was selected as sole architectural design lead and project delivery partner for the SAP TRM, BCM and PI delivery components.

Best practice and innovation

Due to a tightly integrated architectural fit with Honda’s existing SAP in-house banking (IHB) implementation, the use of SAP TRM, CM, BCM and SAP Process Integration (PI) provided Honda with a world-leading treasury architectural platform for HME.

Successful delivery hinges on the ability of all parties to work closely together, with a single vision of success. Over the course of the TMS programme, Covarius operated in close collaboration with both Honda Business, ISD and IBM hardware experts. One of the hallmarks of the TMS programme has been the extent to which an integrated and balanced team approach between Honda and Covarius has been key to achieving success.

HME took the lead in managing the business change within branches, rollout of the SWIFT Alliance Lite2 platform to Honda managed infrastructure, and the transformation of shared services capabilities in Poland to the new SWIFT Alliance payments platform.

Covarius took overall responsibility for the design, implementation, interface development, bank testing, application testing, and data migration areas of all SAP Treasury applications. This also included transitioning HME branches to an enhanced SAP Cash Management Forecasting platform, as well as building high levels of competency within the shared services centre and the IBM team to be able to support these new SAP Treasury applications.

“The ‘Power of Dreams’ driving us to achieve operational excellence through ‘Harnessing the Power of Technology’ has a nice ring to it,” concludes Pinnegar.

Key benefits

• Cost-effective solution.
• Increased STP rates.
• Automation increased.
• Cost savings.
• Implementation of Covarius’ Cash Management Accuracy Engine which dramatically improves cash visibility in SAP CM and achieves a forecast vs actual cash flow accuracy of more than 90%.
• Minimal rejections for all SEPA and non-SEPA payment batches.

Key takeaways

• Invest more time than you think is needed to thoroughly define the requirements specific to your business.
• Choose your business partners well, Covarius provided an outstanding service often going the extra mile to help us achieve our objectives within the challenging timelines.
• Ensure realistic resources from the outset both in terms of people and costs.
• Make sure your ISD department and other key stakeholders fully understand and buy into the solution you are aiming for.