From the October 2010 issue of Treasury & Risk magazine

Dell's SWIFT Global Connection

When it comes to joining SWIFT, most companies approach this complex project in carefully calibrated steps over an extended timeline. Defying conventional thinking, Dell Inc. is leaping ahead. "We're taking the big bang approach," says Peter Schmitz, Dell's global treasury product manager. The company started the groundwork a year ago, and while no live messages were being sent or received as of September, Schmitz expects that before the end of the year, Dell will be "live with all of our 600-plus accounts across the globe, using the full range of reporting and payment messages."

How did SWIFT, Dell's service bureau, and the peers with which the company benchmarks react to this ambitious plan? "They were surprised," Schmitz says. "They thought Dell's approach was quite aggressive for the complexity and scope of the project."

Dell's urgency is linked to its ambition. Joining SWIFT is just one part of the company's "larger mission, which is to create a whole end-to-end treasury operation that is globalized, standardized and automated," notes Treasurer Gary Bischoping Jr. And that, Schmitz explains, "dictated our choice of middleware that consumes information from bank statements, translates it into the right formats and feeds it to the workstation and the ERP system." That middleware is "like a SWIFT integrator bolted onto a bank statement data warehouse," he adds, and "SWIFT also seamlessly integrates with our treasury workstation and ERP system."

"When we got to SWIFT," Schmitz explains, "we saw it as a key component of our solution, a single connection point to replace most of the bank proprietary portals' functionality we were using for hundreds of accounts. We needed something to standardize and simplify our bank communication, and that is what SWIFT does best." Bischoping, Schmitz and the Dell team studied the terrain carefully before taking the plunge. Attending Sibos and AFP conferences provided opportunities to hear presentations, meet SWIFT staff and talk with peers. Dell does a lot of benchmarking with peers, and SWIFT experiences became a part of that benchmarking.

To facilitate receiving SWIFT messages from its sprawling bank network, in addition to directly connected banks, Dell will use "consolidator banks" to collect SWIFT messages from other banks and forward them to Dell. "We'll get the raw 940s and 942s from our consolidators, not consolidated reporting," Schmitz explains. "We'll get all the direct messages. We'll just use other banks to help get the messages to us. That makes it more feasible to pull off our big bang implementation."

One key aid to Dell's plan to bring on all its banks at once was a readiness survey with 20 questions that it sent out early on to all its banks. "The banks were very helpful and provided candid, detailed explanations of what systems and technical capabilities we would need to communicate with them," Schmitz says. "They were very upfront about what they could do and what they could not do."

MetLife's SWIFT plan included its securities division and AP, as well as treasury. It helped that MetLife has on staff experts in treasury operations, IT and project management who formed the SWIFT implementation team. The company also had a treasury system that could process basic SWIFT message formats and resources to build its own middleware for message transformation. The MetLife project team included three staffers from treasury, five from IT, including the master project manager, staff from SWIFT, a project manager and implementation manager from BankServ, and project managers and product specialists from each of MetLife's 11 primary banks.

Treasurers still take the lead in corporate SWIFT projects, but increasingly, corporate interest is spreading to risk. "More often we see risk officers involved in the planning," says Eileen Dignen, managing director for banking accounts and initiatives for the Americas at SWIFT, "and more conversations around managing risk."

Standardization remains a challenge, but that problem is being addressed by the Common Global Implementation group, a SWIFT-sponsored forum of major players that is wrestling with the nitty-gritty details of getting all banks to implement the new ISO 20022 format standards in the same way, Feinberg says. "If they can come up with a blueprint for consistent implementation for true automation, that will be big news," she says.

The full payments XML conversion is in the hands of the trailblazers, the few large corporations that were among the first to join SWIFT, generally using their own direct connections, Cowart says. These players are using their influence and determination to bring about the introduction of XML so they can receive more robust data about their transactions, such as remittance details that will allow them to automatically apply incoming payments. To get that payoff, the rich data has to be in XML ISO when coming from banks, Cowart says. If you just convert 940s or 942s to XML, all you obtain is 940 and 942 information in an XML format without the additional data, he points out.

Page 1 of 5

Advertisement. Closing in 15 seconds.