Danone is world leader in several food industry business lines and has internationally famous brands like Actimel, LU, Volvic, Evian and Danette. Present in 120 countries with a headcount of nearly 90.000. The group's turnover in 2003 was €13.131 billion.
However, Danone has a very centralized organization for the management of human resources and finance. Operational companies are not judged in terms of financial charges and income but on ROP and OFCF.

Financial charges are managed at central level. The Danone treasury department has the task of managing risks (interest rate, counterparty, liquidity risks, etc.) and leading the group's network of treasurers (strong functional links). Danone Finance is a financial company whose central treasury department, based in Paris, is dedicated to cash operations. The accounts of the Group's financial companies are attached to the Treasury Management.

When the project was launched in 1997, the main objective was to pool and secure so-called risky payments for all the Group's subsidiaries (around 80). These payments were manual paper payments and international transfers.
At the same time, the Group introduced an all-in-one messaging system, Lotus Notes, designed to enable all the entities to communicate electronically. This system was also chosen as the basis for cash exchanges.
Therefore, the solution chosen was not only intended to offer client payment functions (in the client/server direction since the Internet was still in its early days) but also signature and validation functions via Notes.

After consulting numerous French and international software publishers, it appeared that only CashPooler from DataLog Finance, a very young company at the time, met the Group's demands.
In addition to a wide range of client functions, CashPooler already integrated a messaging system which satisfied the Group's requirements: 1) the treasurer validates 2) the first signatory receives a notification e-mail and signs, 3) The second signatory receives a notification e-mail then signs. The batches are then sent to central level.
As a result, an agreement was signed with the software publisher at the end of 1997.

Various things led to the success of this project.
First of all, the product itself. "At the time, is was found to be a simple solution and easy to use since it was based on the Group's existing messaging system," pointed out Vania Ferrat, the Group's Treasury IS Manager at the time, who is now Cash Management Director.
The project organization was then set up. It was important to have people dedicated to the project.
Vania Ferrat took charge of the entire technical and organizational part while a functional project manager - the International Treasury Director - took care of the services to be introduced.

They had to find time and – a vital point – involve the subsidiaries. This was relatively easy at Danone due to the Group's organization.
So, in the end, involving the subsidiaries was rather simple.
The Danone Finance team visited all the subsidiaries and, each time, organized information and exchange meetings with the future users. This was followed by product training.

The first functions provided were payments and hedging which were launched at the same time. Head Office recovered information from the subsidiaries and sent it to the bank (single bank for international payments), indicating that it was paying "on their behalf".
As such, Danone Finance made payment on behalf of all the subsidiaries. In return for the payments, Danone Finance impacted the current accounts of the subsidiaries.

Following the success of this initial project, a netting factory was launched. A Euro pooling zone has been operational since 1999 (€ as money of account) along with multi-currency (19) pooling at world level since 2001.

Thirty countries and 74 subsidiaries are now involved in pooling.

The advantages of the project considerably exceeded the initial expectations.
The return on investment – not the main objective – was not only high but was achieved very quickly due to the reorientation of local treasury teams and the sharp drop in banking costs.
The fact that the entire Group used a single system instead of 20 or 30 different e-banking solutions simplified and, in particular, secured exchanges.
Interfacing between ERP (SAP for around 50% of the Group's turnover) and the e-banking system is now extremely simplified, thus bringing the Group close to its target for 2007: an ERP, an e-banking system and an interface with banks (SWIFTNet).

For Vania Ferrat, "With CashPooler, we can pool all the complexity (complexity of bank formats, ERP formats and bank exchanges) in order to offer secured systems that are easier to install and use.".
Danone has also made savings in terms of internal audit – which is very important due to current changes in regulations (IFRS, Sarbannes-Oxley, etc.) – and now has a better vision of the distribution of its subsidiaries' bank flows.
As such, it has the real ability to adjust flows with one bank or another at any time and to launch new invitations to tender, along with the real ability to switch from one bank to another.

Two projects are underway at present: migration of all functions to the "full Web" version of the solution while totally abandoning the client/server version and pooling domestic flows via SWIFTNet.

This will get rid of all the local bank communication functions. A SWIFTNet pilot is operational with a large French bank.
In time, several MA-CUGs will be opened.

IBM Corporation is world leader in computing. With nearly 320,000 employees in more than 100 countries, it earned in 2003 a net profit of $7.6 billion on sales revenue of $89 billion. IBM is a major player in different sectors of the IT world: computers (both Unix servers and MVS mainframes), software (IBM Software) and services (IBM Global Services, the world's leading software services provider). IBM EMEA (Europe, Middle East and Africa) is the subsidiary of IBM Corporation in charge of the Group's activities in Europe, the Middle East and Africa.

When the project was launched in 2001 the treasury of IBM EMEA was decentralized at the level of the subsidiaries. Each local subsidiary (generally one per country) was responsible for payments and collections, the only type of relations it had with banks. Financing was provided by a subsidiary of IBM Corp., located in Ireland, which played the role of in-house bank. The consequence of this decentralization was great heterogeneity of the IT cash management and treasury systems since around 30 different solutions co-existed.

In 2001, IBM EMEA had a double objective: rationalizing its banking relations and centralizing its payments. Until the project was launched, IBM EMEA worked with more than 30 banks in the 16 countries targeted by the project with almost every bank imposing the protocol of its exchange format: Germany, Luxembourg, Netherlands, Spain, Austria, Belgium, Denmark, Finland, France, Greece, Ireland, Italy, Norway, Portugal, UK, Sweden and Switzerland.

The choice of a payment factory system would reduce the number of banks without going as far as a single bank approach. It would also enable the use of a single protocol and a single type of file format. X400 messaging system and EDIFACT file formats were chosen since they were the only ones really used internationally by a lot of banks.

Since IBM used a lot of different solutions for its accounts, payroll, purchases, etc., it was vital to choose a system that was really open in terms of interfaces. This system would also have to respect IBM's technical standards: Web architecture, solution running on AIX, compatibility with DB2 and Websphere. Therefore, the solution chosen would not only have to offer enhanced payment functions, but also be flexible enough in terms of the management of input / output interfaces while respecting very precise technical specifications. An initial study led to a choice between internal development and the use of a software package.

After a second survey of numerous international software providers, it appeared that only CashPooler from DataLog Finance coped with the IBM EMEA requirements and expectations. In addition to relatively enhanced client functions, CashPooler not only integrated the X400 protocol in its standard version but also a very comprehensive, user-friendly system for the creation of interfaces. "Without being an expert, I mapped a CFONB 160 format in 30 minutes on a pilot CashPooler server which we installed for demonstration during the selection phase," indicated Alain Rividi, Treasury Program Manager at IBM EMEA.

This project has been the largest managed to date by IBM EMEA Treasury. However, thanks to the organization set up by “Big Blue”, it was rapidly operational. From the outset, a project manager, based in Dublin, was put in charge of the different phases. With the assistance of two full-time employees, he cooperated with the internal contacts of IBM and the DataLog Finance teams.

Each subsidiary was involved in turn and local project teams were trained. Success of the project was also facilitated by the user-friendliness of CashPooler, its pure Web architecture which does not require any installation in computers in the subsidiaries and its openness in terms of format management.

The first operational subsidiary was the French one. At the start of 2003, the first functions were launched: supplier payments and some other flows. Due to the rapid success of the pilot installation, all the subsidiary's flows (in the IBM => banks and banks => IBM directions) started to go through CashPooler in October 2003. The Dutch subsidiary became operational the same month.
At the end of 2004, several other countries were using CashPooler for all their financial flows: Spain, Portugal, Belgium and Luxembourg. In addition, all the international flows of the 16 target countries of the project were centralized in the system. This represents a total of nearly one million payments in a full year. At the end of 2005, when all the target countries will be centralized in CashPooler for all their flows,

this will represent three million payments in a full year. Thanks to the interfaces between the different information systems of IBM EMEA and CashPooler, 90% of payments arrive directly signed and verified in the system. The remaining 10% are entered in the software manually then sent to the banks and information systems.

The benefits of the project were way beyond the initial expectations. No major incident has been noted in two years of operation, illustrating the reliability of CashPooler. The return on investment was high and fast due to the considerable reduction of banking costs. Use of the same system by 16 countries instead of 30 different e-banking solutions has led to the homogenization of payment procedures.

This has also secured payments, an advantage that is important in view of current developments in matters of standards (IFRS, Sarbanes-Oxley, etc.).
Finally, interfacing between the different information systems (around 170 different formats) and the electronic banking system is now very simple.

Ammann has been in business for more than 130 years. In 1869, Jakob Ammann, a Swiss mill builder, opened his first workshop. Led by their pioneering spirit, the company owners extended the clients and markets they canvassed as well as their range of products. This pioneering spirit, which is still the driving force of this family business today, makes Ammann one of the world leaders in machines, installations and services for the public works industry with core business skills in road surfacing and construction. Based in Langenthal, Switzerland, the company has 2,500 employees in 15 countries through subsidiaries (Europe, China and the USA) and partnerships in several dozens of countries.

The objective of the treasury department, set up in 2004, is to manage the financing of the Group and its subsidiaries, the banking relations and the financial flows, the foreign exchange and interests rate risks as well as the internal reporting.
For this reason, the company recruited Stéphane Fort as Corporate Treasurer.

In order to optimize the group’s financial resources and its financial risks as good as possible, a centralized cash management system was introduced. As such, financing of the subsidiaries, which was previously managed locally, is now done by an in-house bank. A Euro cash pool has also been introduced in cooperation with a leading European bank.
At the same time, banking relations have been gradually rationalized. This led to a reduction of the number of banking partners and an improvement in services and conditions.

Due to the Group’s organization, there is a large number of internal transactions since each entity can be both client and supplier of other entities of the Group. This represents several thousand invoices per month in several currencies and financial volumes corresponding to several tens of millions of Euros.

In 2004, when it began to consider netting its intra-group flows, Ammann had four objectives: to improve its cash management and forecasts, to control its foreign exchange risk, to reduce its banking costs and to improve communication and respect of deadlines between the different subsidiaries.
Cash forecasting problems were mainly linked to intra-group movements. Payment conditions varied in terms of the counterparties and payment deadlines were not systematically respected.

The foreign exchange risk linked to intra- group transactions was also considerable due to the international character of the Group and the location of the different subsidiaries.
Finally, banking costs represented large amounts and the matching of invoices was little automated and time consuming.

The Group wanted to achieve a considerable reduction of these costs. Therefore, at the start of 2005, it started to net intra-group payments through the installation of netting which cleared the different positions and limited bank movements thanks to the use of an in- house bank.
The solution chosen was supposed to offer not only enhanced netting functions but to be easy and quick to install since Ammann has a very restricted treasury team.
After a study of several Swiss and international software providers, as well as banks offering netting solutions, it appeared that CashNetting from DataLog Finance best suited the requirements of Ammann. In addition to a wide range of functions, CashNetting offers various advantages compared to other products:
its pure Web architecture which does not need any installation on the computers of subsidiaries and its user friendliness for non-specialists. “Since we are a very small team in treasury, its easy installation and use was the first criterion. In addition, CashNetting was by far the best product on this point,” says Stéphane Fort.

The banking solution was ruled out for various reasons: lack of flexibility, dependence of the company on a bank and Ammann’s desire to have full control of the process.

The project was very rapidly operational since the first netting took place less than three months after its launch. The only problem encountered was linked to the diversity of Web connections between the head office and the subsidiaries and the lack of a real Intranet. A solution was found for each case while guaranteeing the security and quality of services.

The project’s success was also facilitated by the easy installation and use of CashNetting, as well as the functions it offers in terms of managing formats and interfacing with SAP.

Since September 2005, 18 entities have been operational for netting in both € and other currencies.

Nowadays, the organization of netting respects the principles planned at the start of the project:

• Netting of intra-group payments.
• Harmonization of payment conditions and strict management of schedules.
• Management of foreign currencies and the foreign exchange risk.
• Management of payments through intra- group financial current accounts.

The benefits of the project have gone way beyond the initial expectations. The return on investment has been very high and very fast (less than a year) due to the sharp drop in banking costs and improved cash management. The use of the same system by the 18 entities homogenized the payment procedures and led to a 90% reduction in the workload necessary for treasury and intra-group invoice management.

Communication and management of conflicts relative to invoices have considerably improved between subsidiaries.
They are very satisfied with the project and the CashNetting system. Finally, cash forecasts are now much more reliable.