Photo of Tay Jingmin, Serene Tan Yung Wee and Robert Kelly, Zoetis and Mark Foo, J.P. Morgan.

Following its separation from Pfizer and IPO in February 2013, Zoetis undertook an initiative to improve its treasury and cash management systems significantly, including consolidation of its banking partners globally. It worked on this solution with a single partner bank, and, as a participating member of SCORE, leveraged SWIFTNet and ISO 20022 XML version 3 standards now using pain.001/002 and camt.053/054 formats.

The challenge

Following its separation from Pfizer and its Initial Public Offering in February 2013, Zoetis undertook an initiative to improve its treasury and cash management systems, significantly increasing consolidation of its banking partners globally.

The implementation of this initiative overlapped with the roll-out of SAP as its global enterprise resource planning (ERP) platform, and a new treasury management system (TMS) which Zoetis used to manage its global cash position to effect high-value low-volume treasury-related payments.

To optimise the results of its treasury transformation, Zoetis needed to:

• Standardise its cash management processes globally by leveraging its SAP system, which would bring about control, automation and elimination of manual work.
• Utilise SWIFT connectivity (FIN/FileAct) and industry standard file formats to ensure best-in-class practices.

With these objectives in mind, Zoetis needed the banking partners it selected to be SWIFT-enabled and to be able to support ISO payment and reporting file standards. In addition, the selected banking partners needed to have significant experience in the implementation of a SWIFT connectivity and ISO file formats due to the aggressive project timelines.

The solution

As part of its Asia Pacific (APAC) cash management mandate, Zoetis partnered closely with J.P. Morgan to implement and enhance its cash management practices. The solution that it implemented across 14 APAC countries enabled Zoetis, as a participating member of SCORE, to leverage SWIFTNet and ISO 20022 XML version three standards to:

• Initiate electronic payments using the pain.001 format.
• Receive confirmation and acknowledgement reports in the pain.002 format.
• Receive bank statements in the camt.053/054 format.
• Send MT101s and receive MT940 bank statement via its TMS.

As Tay Jingmin, Manager Regional Treasury & Front Office explains, “Our primary objectives for the treasury transformation project were to improve payment processing, enhance cash management, rationalise bank accounts and optimise utilisation of our new SAP ERP platform.”

Best practice and innovation

By utilising SWIFT connectivity, Zoetis has been able to:

• Standardise and fully automate their cash and treasury management functions.
• Reduce infrastructure, maintenance and costs by using a single connectivity that leverages SWIFT.
• Gain control and enhance security on payment initiation.
• Fully utilise its investments in SAP by directly submitting vendor and expense payments electronically.
• Eliminate manual payments and non-standard work flows.
• Centralise account information.
• Improve cash visibility and efficiency as a result of automated bank reconciliation.
• Manage treasury payments and information more efficiently.
• Reduce IT costs by using industry standard file formats across the region.

Jingmin concludes: “The leading-edge technology we have implemented has become integral to our daily cash and treasury management operations, and ensures that we have a robust, dynamic solution.

“We feel honoured to have won the Adam Smith Award Asia We see this as a recognition of our Treasury department’s achievements. The Adam Smith Awards Asia also serves as confirmation that we are on the right track in the transformation of our cash management process.

There are three key elements to our success: Teamwork, Planning and Implementation. We had the valuable support of our Senior Management, Finance teams, Treasury and Information Technology Services for this project. We planned for a best in class solution that leveraged leading technology to centralise and automate our processes, bearing in mind that such initiatives should also be reliable and scalable. Implementation of the project was highly successful because we were privileged to have committed, technically capable colleagues at Zoetis who saw the project through with excellence from start to finish.”

Tay Jingmin, Manager Regional Treasury & Front Office, Zoetis

The connectivity to SWIFT allows us to automate and standardise financial transactions, which lowered our costs, reduced operational risk and eliminated inefficiencies. By adhering to ISO standards as much as possible, rather than making modifications to suit a bank’s environment and systems, we have been able to operate with a truly bank-neutral ISO 20022 standards solution and have installed the redundancy that is critical in today’s financial environment. The SWIFT set-up supports over 40,000 payments annually across all payment types, with straight through processing (STP) rates at above industry averages. We have significantly increased efficiency, substantially reduced risk, and in so doing, optimally positioned the company for future growth.”

Key benefits

• Increased security in vendor and expense payments by utilising its automated SWIFT connectivity and state-of-the-art security protocols, as well as the system’s full integration with operations.
• Increased efficiency and greater control of its payments, by converting manual submission of applications to electronic channels.