Merck’s effort to standardize its cash management and payments worldwide by implementing a single global banking interface has produced many benefits, says Mark McDonough, treasurer and vice president at the $48 billion pharmaceutical company. But he acknowledges that the process was not easy.
Before New Jersey-based Merck implemented the global banking strategy, the company’s “transactional banking activities [were] very much geared to local market needs and local market banking processes,” McDonough says. Advances in technology, as well as Merck’s move to a standard global ERP platform and shared-services environment, paved the way for deploying a single payments file format worldwide, an effort that Merck’s treasury began to roll out in 2008.
Asked what advice he would give companies that are considering a similar effort, McDonough says: “It is a fairly significant upfront commitment and investment to move to ISO 20022 and to a global standard interface. You have to be persistent in the beginning.”
But he adds that as Merck’s effort gains “critical mass, we’re beginning to see the benefits—they’re coming through in very large ways now.”