Photo of Jan Obermeier, Standard Chartered, Ulf Kålbäck, Nordea, Mo Hamdan, Benedikt Zimmerman-Kuehne, Kuehne + Nagel, John Murray, Citi and Tamas Csomo, Kuehne + Nagel.
This is not just about SWIFT as the company was also implementing a new ERP platform. They now cover the whole world (and they are present in 100+ countries) with just eight banks. The SWIFT solution is now live in more than 50 countries and they expect to complete the project in the summer 2017.
As part of the company’s global strategy to keep improving their offerings, Kuehne + Nagel launched a project in late 2014 to replace its existing ERP with a new in-house developed ERP.
Before the implementation of the new ERP, all banking connectivity was handled locally and every country was in charge of its own connections. Operating in around 1,200 locations in over 100 countries means that the business in each country is always a local business with local customers and local suppliers. Every country needs to have local bank accounts; local teams book, prepare and approve the incoming and outgoing payments locally.
A new ERP offered the opportunity to standardise and centralise all bank connectivity globally – the alternative to which would have been to rebuild all of the company’s bank connections at a local level.
Treasury decided that going for global standardisation on incoming and outgoing payments via a SWIFT connection was by far the best option.
In the ‘kick-off’ meeting, Benedikt Zimmermann-Kuehne, Cash Manager, Kuehne + Nagel Management AG, says the team agreed on the following vision: “It must be possible for Kuehne + Nagel to be able to connect with all of the company’s banks worldwide through one channel, in one format and with one security module following one security policy.”
Kuehne + Nagel has a corporate banking strategy which allows treasury to cover the whole world with just eight banks. All of these banks are large multinationals which are quite experienced with SWIFT. From the beginning it was clear that Kuehne + Nagel will have all in- and outgoing payments only in XML format.
All banks worldwide send bank statements via SWIFT to the service bureau which converts them into the internal format and forwards them via an AS2 connection. All payments are sent from the ERP via the same AS2 connection to the service bureau, which converts them into the bank specific format and sends them via SWIFT to the banks. There is no other connection to the bank. All in- and outgoing payments are sent via SWIFT.
The definition of a format which is valid for nearly 100 countries, eight different banks and more than 70 different currencies was a big challenge. Kuehne + Nagel agreed on an internal standardised XML format for both incoming and outgoing payments.
One security module.
The payment approval is done locally via a centralised platform. The estimation is that more than 2m payments from more than 70 countries a year will be sent via this platform once all countries are live.
One security policy.
The administration and user management is done centrally and the roles and user rights worldwide are standardised. The payment approval process is the same worldwide, and follows the same security policy. There are no exceptions.
D+H Switzerland is Kuehne + Nagel’s service bureau and partner in this project. They attend the weekly calls with the banks and discuss format issues directly with them, as well as maintaining the SWIFT infrastructure.
Best practice and innovation
Currently, the ERP platform and the new SWIFT solution has gone live in more than 50 countries – about 50% of Kuehne + Nagel’s total markets globally. It is intended that the project will be finished summer 2017.
Zimmermann-Kuehne says: “We are very happy and proud to say that our vision came true. There is no difference in channel, format, security module and security policy if an incoming or outgoing payment is made in New Zealand, South Korea, Bangladesh, Pakistan, Romania, Estonia, Switzerland, Belgium, Norway, Ireland, Canada, Chile or all the other countries worldwide which are already implemented.”
A global solution which will be implemented across all of the company’s markets.
Single channel, format, security module and policy.
Defined format which is valid for nearly 100 countries, eight different banks and more than 70 different currencies.
High levels of standardisation achieved.