The METRO Group is one of the most important international retail companies: The company occupies leading market positions in various segments with its Metro Cash & Carry, Real hypermarkets, Media Markt/Saturn and Galeria Kaufhof brands. A total of around 300,000 employees from 150 countries work at more than 2,100 locations in more than 30 countries in Europe and Asia. At the top is METRO AG as the strategic management holding company. The operational business is divided into the business segments wholesale, food retail, non-food specialist markets and department stores. The sales divisions of the METRO Group operate independently on the market in these areas. So-called cross-divisional companies look after group-wide services such as logistics and advertising for these sales divisions.
The group's supply chain finance service provider is MIAG. As a 100% subsidiary of METRO AG, the company provides national and international payment transaction services for METRO sales divisions and cross-divisional service companies as well as delcredere and vendor discounting services for METRO GROUP suppliers. In this function as the METRO GROUP's "Payment Factory", the company is currently active in more than 17 countries, and processes payments to around 50,000 suppliers. MIAG processes more than 35 million items and issues more than 1.5 million payment orders per annum.
Within an internationally active group of companies of this size, the settlement of payments is a highly complex process. The different Group companies have their own country-specific requirements at local level which must be complied with. Communication with the sales divisions and the various banks ensures that numerous systems and the most diverse formats have to be brought together and operated during settlement. The resulting high complexity of the settlement process with the required high level of security was one of the reasons for launching the "MIAG Settlement Validation" (MSV) project in 2009. Essential objective: To monitor the entire settlement process (from the sales divisions and partner companies to the various executing banks) independently of the applications and platforms involved and used in the settlement process (e.g. MIAG Settlement System MSS, payment platform Multiversa, EDI converter TradeXpress, etc.) and therefore, in addition to increased security, also increase the efficiency and quality of the processes and cooperation in everyday business. A basic condition for monitoring the data flow and the associated processes was a comprehensive consideration of the existing system and process landscape within the Metro Group. "In a group like ours, you can't just change all the systems top-down just to make the structures and processing simpler," explains Herbert Uster, Head of Risk Management, Governance and Projects at MIAG. "It was clear to us from the outset that we would have to leave the existing processes, interfaces, applications such as banking and EDI systems largely unchanged if we want to succeed with this project."
Need for additional controls
A lack of automated control processes meant that the seamless functional link that was required between the receipt of payment orders from the sales divisions and third-party customers through to the outgoing payment instructions to the banks could not be sufficiently represented and ensured. "Particularly the necessary conversion of a significant proportion of payments after final approval in the ESB MULTIVERSA represented a compliance problem," recalls Herbert Uster. "This left a significant control gap that did not meet stringent security requirements of MIAG. There is also the risk that manual checks will lead to a certain routine in the long term, which can sometimes affect control quality." MIAG also wanted to use MSV to comprehensively expand the checks of payment flows down to attribute level.
The main objective of the MSV project was therefore to achieve the high standards of MIAG's internal control system (ICS) in an efficient and timely manner. Payment processes should be monitored in detail on the basis of 23 specific checks in future. At the same time, automatic alarms should be triggered in the event of faults and discrepancies. Compared to existing checking processes, errors affecting payment executions can be eliminated, and the response to disruptions in the regulatory process can take place much more efficiently. As part of MIAG's sender responsibility, the MSV tool must guarantee that all outgoing payments to the banks not only match the payment orders of the sales divisions and third-party customers in terms of the number of transfers and the total amount, but the details must also correspond with the respective attributes that are essential for the payments (beneficiary, bank code, bank account, amount, currency, execution date). If there are any discrepancies in this respect anywhere, the tool should detect them immediately and automatically prevent the payment file from being sent to the respective executing bank. "In addition to increasing the reliability and quality of the checks and a significant reduction in the amount of working time that had to be spent on the previous inspections and tests, we particularly wanted to achieve one thing: The absolute certainty that only thoroughly checked payment orders can reach the executing banks," summarises Herbert Uster.
In line with its ambitious goals, MIAG also made stringent demands of potential partners and the solutions to be used. Companies wishing to bid for the project were required to have more than ten years' experience in the IT financial services sector and have reference projects in the financial/banking industry. Interested providers also required experience in the field of international payment traffic and already have previous knowledge of important formats for the presentation and processing of a payment (e.g. DTAUS, DTAZV, PAYMUL or MT101). In a multi-stage, complex selection process, Swiss IT service provider PMC Informatik AG finally prevailed, and was allowed to tackle the implementation with the MR.KNOW – BPM (formerly BPM inspire) process management suite. "PMC had various interesting projects from this area in its portfolio which had already been successfully implemented," confirms Herbert Uster. "The proposed MR.KNOW – BPM suite has also been used for similar tasks at very well-known clients, and provides proven and adequate performance for the bulk data to be processed."
The challenges outlined in the planning were implemented in an excellent way using MR.KNOW – BPM. The solution makes it possible to have a process organization instead of a functional one: Unlike a hard-wired individual solution for process management, the BPM solution approach is oriented to an ever-increasing tendency towards process-oriented corporate organization. Customer-oriented processes are flexibly brought to the fore, and can also be adapted in the hectic everyday working environment with relatively little effort. The business departments always have control over their processes by means of smooth interaction between business and technical process modelling. Organizational changes or changes required by the market can therefore be incorporated into the BPM system at any time. At the same time, the process-oriented view provides increased transparency in the business processes: With MR.KNOW – BPM, the processing status of a process can be tracked at any time. The solution already logs all actions as standard, so that a continuous audit-proof process log is automatically created at the end of the process.
Efficient in use
A high degree of process automation and comprehensive escalation and substitution regulations which clearly regulate cases such as illness or holidays, for example, result in a significantly shorter throughput time. At the same time, the workload of the individual process participants is reduced, whereas the targeted distribution of information even improves adherence to response deadlines.
"A unique selling point of MR.KNOW – BPM in comparison to other BPM solutions is the fact that not only can processes be modelled and automated, but the application development of the user interfaces including the connection to existing systems is supported," says Louis Flach of PMC. "By involving a graphic designer, not only the browser-based user interfaces for individual process steps, but ultimately entire web applications can be created – even for areas which have nothing to do with processes at all, such as administrative or data maintenance dialogues. This made the solution ideal for use in the development of a complex tool like the MSV." MR.KNOW – BPM also makes it possible to integrate with existing or strategically set technologies – which flexible deployment in a large corporate group such as Metro much easier. The compatibility ranges from complete .NET integrations such as Microsoft Sharepoint or Office to ERP systems such as SAP, Wilken or Navision. Portal, CMS or web application servers can also be easily connected with the suite.
The new solution has allowed MIAG to significantly improve the efficiency of payment settlement: "In the past, it was a challenge to maintain an overview of settlement activity in view of the many complex data flows and therefore manage the processes that were needed efficiently," Herbert Uster recalls. "The MSV Cockpit with its various functions provides the required overview at any time. Thanks to the flexible process management suite within the MSV tool, deadlines are automatically monitored and on-time processing and automatic escalation are supported. We are completely satisfied with the wide range of adaptation and development options of MR.KNOW – BPM as well as the competent support provided by PMC Informatik AG."