The challenge

AMS Sensors in Asia is growing and required a bank that could integrate its treasury processes. Several activities are heavily manual, requiring human intervention and the company had a limited view on its cash balances with various banks, and the cost of treasury operations was high.

Procurement and sales in Asia were exposed to cross-currency costs, and this needed to be reduced as much as possible to retain value. The solution needed to be scalable, as the company plan to expand in Asia, and have a new treasury and shared service centre (SSC) being set up in Singapore.

While AMS Sensors plan to grow, there will not be additional resources to boost the treasury functions. It is, therefore, critical that treasury needs to automate most of its processes and focus on value-added activities. In its digital transformation project, AMS Sensors was centralising its ERP into SAP R3, with plans to incorporate the regional set-up into the same ERP in future.

The company wanted to digitalise its treasury in a way that was both effective and cost efficient. The company envisioned the entire structure before engaging various banks. It had the foresight to determine how the group would grow and prepared the various scenarios for banks to manage and solve.

The solution

Deutsche Bank delivered the YDBN SAP Interface that helped the group to meet its key objectives. To achieve all these goals, including a single SAP integration solution, took less than two months to implement and came with a relatively low cost.

The bank provided the proprietary interface (ERP integration) and host-to-host solution to automate the account payable functions. This meant that AMS Sensors need only execute the payment run process once in the ERP system, without the need to duplicate efforts on internet banking or other applications. This means the process becomes straight through and is secure without the risk of compromising the integrity of the payment files.

To add value, even cross-currency payments are automated through this process, with AMS Sensors being assured the rates are not board rates but are in fact live market rates with pre-agreed margins, achieved through the bank’s FX4Cash product.

End-of-day reporting is automated by the bank’s proprietary multi-cash reports, which are enriched reporting that is easily consumed by SAP, since it is an SAP native format. Receivables are much more easily matched since there is additional data to aid the reconciliation.

The solution is scalable, allowing AMS Sensors to grow locally, as well as expand its coverage regionally in Asia. This is best demonstrated by the number of staff growing from 200 to 8,000 in less than three years, as well as expansions into Taiwan, Malaysia, China, Japan and South Korea.

Best practice and innovation

The company was meticulous in its approach and mindful of the various nuances in Asian markets. It also determined the various treasury policies ahead of time with a desire to grow into the region. AMS Senors worked with the bank very closely, to understand the various requirements in regulations, country practices, and even travelled in-country to perform due diligence.

To ensure that the set-up runs like clockwork, the company undertook the task to define clear policies and key operating procedures, re-establishing what is important. This takes a lot of dedication, time and effort, resulting in a very strong treasury and shared service centre that is equipped to handle scaling growth when required.

Key benefits

• Human resource savings.
• Created additional capacity without additional cost.
• Improved payment and collection cycles.
• More effective treasury and SSC set-up.

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