20 TMI | Issue 181

When Yara was demerged from Norsk Hydro, weoriginally took on Norsk Hydro’s treasury andpayment systems so the new treasury function could

get up and running quickly. As part of this infrastructure, weinherited a highly functional payment factory and in-housebanking system, which had been built in-house at Norsk Hydro.Although the system met our functional needs, however, werecognised that a system developed in-house is very expensiveto maintain and it is difficult to reflect industry developments.Furthermore, our lease for the system was only for five years,so the system had to be replaced.In addition, while we recognised the value of a centralised

treasury and payments infrastructure at Norsk Hydro, we had

Implementing Payments andCollections Technologyby Siri-Anne dos Santos, Cash Manager, Yara International ASA

not determined whether this was the right business andtechnical model for Yara. We therefore conducted a study todetermine whether Yara should maintain a centralised treasury,payments and collections factory. The outcome of this was verypositively in favour of a centralised infrastructure, so we madethe decision to select a new payments factory and in-housebanking system.

Functional requirementsAs our existing system was built in-house and enhanced over anumber of years, it was functionally-rich and was closelyintegrated both with our in-house systems and externalbanking partners. We had a number of systems from which

CO2-productionplant, Sluiskil

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22 TMI | Issue 181

payments originated around the group,and we work with a number of banksglobally, using EDIFACT and SCORE (Yarahas joined SWIFT as a corporatemember) in our communication withbanks. We were also using the system toprocess collections on behalf of businessunits around the world, which weneeded to replicate in a new system. Inaddition, we wanted a liquiditymanagement tool.

System decisionOne issue we discovered when wereviewed the potential solutions thatwere available on the market was that inmost cases, in-house bankingcapabilities were integrated as part of atreasury management system, asopposed to being a standalone functionwhich could be used independently. Wewere already using SAP for core treasurymanagement and did not intend toreplace this unless the business caseproved otherwise. Furthermore, mostpayment factory solutions did notsupport collections, which was also partof our project scope.We ended up reviewing five different

systems, and having conducted a verythorough review process, we made thedecision to implement DataLog Finance’sCashPooler solution. This was anunexpected choice from our perspective,and having initially discovered thecompany nearly by chance, it had reallybeen the ‘wild card’ in our selectionprocess. There were a variety of reasonsfor our decision, however. Firstly, it wasoffered as a standalone payment factorysolution, as opposed to having atreasury management system at its core.Secondly, the system supported both ourpayment and collection requirements,including our integration needs, andDataLog was willing to develop andintegrate the required liquiditymanagement tool in the system.

ImplementationOne of our initial challenges was thatalthough we could use DataLog’sCashPooler to manage the paymentsfactory, it did not provide in-housebanking capabilities. To address this, we

set up SAP to manage basic in-housebanking using the BCA (bank customeraccount) module. We run an end-of-day process in CashPooler which thenupdates the SAP intercompanybalances. Data is then passed back toCashPooler and transaction and intereststatements can then be accessed bybusiness units.As with any complex project, the

implementation was very challenging.We could not implement the systemgradually, due to the nature of apayments factory operation, whichmeant a major ‘go live’ includingintegration with a number of bankingand internal systems, and a largenumber of payments in progress. Dataconversion between the existing andnew system was the most difficultaspect of the project which would nothave been the case had it been anentirely new set-up.To ensure the success of the project,

we appointed Accenture to provideproject management services, inaddition to the team from Yara. DataLogalso provided considerable assistance toimplement CashPooler.

Project outcomesWe went live on CashPooler on October1 2008, so we have now been live forjust over a year. Although inevitablythere were some teething issues, thesewere quickly resolved through a numberof fixes and system updates. Since wewent live, the system has proved verysuccessful, we need far fewer systemfixes, and we have been very satisfiedwith the project outcomes. It wasnotable that although the previoussystem had met our needs verysuccessfully, the new system wasreceived very positively by the users.CashPooler can now be accessed bysubsidiaries globally through a webinterface, which has been far easier toroll out than implementing software ineach location across more than 50countries. The system has proved veryattractive to users in our subsidiarieswho now have online access to theirpayments and statements (bothintercompany and bank statements).

Future plansWe are now using CashPooler to makeintercompany, cross-border anddomestic payments across Europe,United States and Canada. We also havea presence in Africa, Asia and LatinAmerica and we want to extend our useof the system to domestic payments inthese regions. Consequently, we havecommenced a project in Singapore asthe first step to achieve this. Also,having two different systems aspayment factory and in-house bank ischallenging integration wise. DataLog isabout to introduce in-house bankingcapabilities into the system, and wewill follow this development withinterest. �

Siri-Anne dos SantosCash Manager, Yara International ASA

Siri-Anne dos Santos is Cash Manager for YaraInternational ASA and works in the Yara FinanceDepartment. She holds a Bachelor’s degree in banking andhas 20 years of cash management experience with NorskHydro ASA and Yara International ASA.

Yara International ASA

Yara International ASA was demerged from Norsk Hydro in2004, and is now established as the world’s largest supplier ofcrop nutrients, headquartered in Oslo, Norway and listed on theOslo Stock Exchange. Yara is established in every major regionof the world, with sales in over 120 countries and operations inmore than 50 countries. In 2008, the company earned revenuesof NOK 88.8bn, an increase of over NOK 30bn from the previ-ous year, with pre-tax earnings of NOK 19.9bn. The companyemploys around 8,000 people worldwide.

Key Points

� After its demerger from Norsk Hydro, Yara decided to choosea new payments factory and in-house banking system

� After examining five different systems, DataLog Finance’sCashPooler system was chosen, plus SAP to manage this,using the BCA model

� In its first year of operation the new system has proved verysuccessful; it was greeted enthusiastically by users and can beaccessed by subsidiaries globally through a web interface

� Plans are under way to extend the system to domesticpayments in Africa, Asia and Latin America

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