Photo of Malcolm Grant, IOM.

IOM transforms cash management, POBOs and receipt data in sweeping automation process

The challenge

International Organization for Migration (IOM) sought to overhaul its cash management, payments-on-behalf-of (POBO) and processes around sharing donor receipt data. The challenge lay in its operations spanning 170 countries and the requirement to expend funds locally via accounts with approximately 200 banks. The IOM’s funding is received centrally into bank accounts in the US and Europe from which it funds local bank accounts, not just in major currencies but in most worldwide exotic currencies too.

The solution

In a first solution, IOM introduced 360T to obtain competing bids for exotic currencies to reduce excess spread from local banks. The bot, or technology, uses the Freshservice Ticketing platform to begin the process from the local office who state their monthly needs in hard currency and local currency amounts. The bot validates authorisation controls by senior local officials, performs reasonableness checks against historical transactional data from the SAP ERP platform and current cash flow forecasts to validate the request before execution.

The technology then prepares the payable for hard currency requests in the Coupa TMS platform, where standard settlement instructions (SSIs) matching the destination bank account are prestored. Where local currency is requested, the bot sends a trade request to 360T which is pre-configured with trading hours and limits to intelligently select relevant counterparties for each currency pair. After final cover checks from treasury staff, the payments are released and accounting entries to the ERP are automatically generated.

In a second solution, the central hub now provides POBO services for its country missions for cross-border payments on an as needed basis. Automation allows a human step to verify vendor bank details. During the process, automation involves using Accuity’s international bank account number (IBAN) checker tool to verify IBANs to provide an early filter. The technological overhaul also allows timely updates to worldwide project managers across the IOM of receipt of specific earmarked projects funds from donor states, critical to enable rapid implementation of projects. Using data from electronic bank statements collected in Coupa TMS, the technology runs a predefined report on incoming transactions which it intelligently extracts data on incoming donor funds, including donor name and project ID. A second report is run and extracted by the technology in SAP for outstanding incoming payments linked to donor projects. The process prepares emails to the assigned IOM managers, who require this information, and includes the relevant reports from Coupa and SAP as attachments, which also facilities accounts receivable reconciliation in the ERP system.

Best practice and innovation

The solutions are truly innovative in connecting several very different platforms in an integrated manner. It eliminates substantial rekeying of data, reduces human generated error, and reduces lead times on these processes from three to five days to one to two days. The automation also provides a high degree of capacity for upscaling to cope for predicted future increases in demand for services. It takes account of different time zones to ensure trading for exotic currencies during live trading and includes additional controls and validates to reduce risk.

IOM’s IT team were fully engaged to validate security and network issues around the bot user environment and access credentials. The time saved in human interventions, has allowed IOM to retrain staff to do more value-added work in risk mitigation and technical assistance across the organisation.

Key benefits

• Cost savings.
• Headcount savings.
• Process efficiencies.
• Increased automation.
• Risk mitigated.
• Errors reduced.
• Manual intervention reduced.
• Increased system connectivity.
• Exceptional implementation (budget/time).
• Quality accreditation achieved.