Leading AC Co. improves operational efficiency with IBSFINtech's Solution

How India’s leading Air conditioning and Commercial Refrigeration company automated their Treasury & Trade Finance function

How India’s leading Air conditioning and Commercial Refrigeration company automated their Treasury & Trade Finance function

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ERP, FX management, SAP, solution, Trade Finance

Company Background

India’s leading air conditioning and commercial refrigeration company, with an annual revenue of over ₹6000 crores (over US$ 770 million),a network of 32 offices, 5 modern manufacturing facilities, 2800 employees, and 3600 channel partners with over 5500 stores for room ACs, packaged air conditioners, chillers, cold rooms as well as refrigeration products and systems; along with 1060 service associates reaches out to customers in over 900 towns.

Many organizations still struggle with using ERP as the solution for Treasury management. It may not be feasible to use ERP, as treasury function requires a dedicated solution designed for the purpose of automating the Treasury operations. We selected IBSFINtech as their comprehensive offerings helped us automate our trade finance operations with holistic approach. It is a standardized product, having most of the business scenarios pre-existing in the product and if required solution configuration as per the corporate workflows is very easy. The solution played a pivotal role in improving process efficiencies, ensuring data accuracy and 360-degree visibility. The embedded risk policy is the added advantage for us to ensure compliance and transparency of the entire operations.

Kundip Thakker
Head – Treasury, Blue Star Ltd.

Challenges

The Company has deployed SAP S/4 HANA, an Enterprise Resource Planning (ERP) product, to take care of their manufacturing, Material Management and Accounting requirements. The trade finance operations were primarily managed manually which led to following challenges:

All the Banking activities related to trade finance were maintained in Excel spread sheets.
Underlying exposures were maintained in SAP.
Accounting entries by respective team were entered manually in SAP.
Pre-automation 80% of LC requests were entered manually into SAP.
A third-party application (Star Vault application) was used for managing the documents.

Objectives of Automation

Before automation, the company managed all activities solely in excel, which was convenient and easy to use, but have limited robustness. But, more importantly, precluded sound control over process flow. Hence, the goal of automation were identified as:

Automating the entire process which frees up time to add genuine value to the business. It will also help in optimized, accurate and easier reporting to the management.
Automated processes are controlled by defined workflows which consistently operate accurately and within your defined timeline. Automation provides the client of requirements for successful measurement.
Improving operational efficiency of processes like LC, BG by reducing the time taken to complete the same task.
End-to-End visibility of various business processes including documentation for both trade and forex operations
Visibility of open exposures like LC, audit trail and traceability
Automation allows to define and streamline business processes. Eliminate unnecessary tasks and realign process steps to optimize the flow of information throughout various units/divisions.
Automation allows to accomplish more by utilizing fewer resources.

Solution

We were engaged to understand these challenges and provide the solution for end-to-end automation of Treasury and Trade Finance operations. We suggested IBSFINtech’s Comprehensive and Integrated solution for addressing the challenges faced by the corporate in efficient management of Currency risk and trade finance operations. In addition the product also includes a Doc Prep module which is robust document management system for storing of critical documents and document preparation as per the guidelines. The Trade Finance operation consists of tracking the workflow of Imports & Exports from Sale (only exposure) / Purchase Contracts and banking activities till settlement of respective transactions. The Treasury operations are targeted to balance and hedge the currency exposure arising out of the above operations through Forward Contracts and options.

Solution Benefits

Process automation leading to improved operational efficiency of 40% saving in person-hours on an average across Front, Middle and Back office
Reduction in manual intervention leading to error free accounting entries by back office and in turn reducing operational risk
Well-defined workflows leading to streamlined business processes
Real time access to business data, open exposures, audit trails and documentation

Strong governance backed with efficient and felicitous management reporting in the form of intuitive dashboards and analytics
Single point of truth for the decision makers and stakeholders.

Awards

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