IBS Journal Supplement September 2015


OFID’s work on the ground After a round of recruitment to bring


in the necessary skills (Edo joined at this time), the main accounting part of the SAP platform went live in 2008, followed by human capital management in 2009, and then an extension of this with employee/ manager self-service in 2011. The imple- mentations were in OFID’s headquarters in Vienna. An RFP followed in 2012 for the third phase, which was treasury and loans, plus a project management capabil- ity. By this stage, SAP’s focus on OFID had improved, says Edo, as ‘we were no longer considered small fry’. OFID was moved to an enterprise support package with SAP and ‘we are now doing well together’. Approval for the later phases stemmed


from the benefits that OFID had been able to show from the original investments, says Edo. ‘Management was convinced that our spending brought value for money to the organisation.’ There have been parallel RFI and RFP


processes for partners for each phases of the project. Tata Consulting was used for the accounting core, a German company called KWP was used for the HR pieces, and another German company, Convista, is working on the treasury and lending phase. It was important to gain expert help as OFID is a relatively small institution, with 191 staff and only ten in IT. The planned introduction of the treas-


ury and risk management system meant we obviously needed a way to streamline our payment engine as well, says Edo. The SAP system provided ‘straight-through processing [STP] support for Swift mes-


sages straight out of the box but we’re not a full bank and we didn’t want to start recruiting Swift professionals in-house.’ This led OFID to evaluate a service bureau option as a viable alternative. Fundtech, now part of D+H Corpora-


tion, was selected because it was one of Swift’s premium partners, covered all of OFID’s functional and technical require- ments, was bank-agnostic ‘and gave us favourable pricing’, says Edo. The STP aspect was important because OFID want- ed a direct, seamless connection, without the need for additional proprietary mid- dleware, he adds. Providing all of the nec- essary checks are in place, it wanted direct processing of its messages by Swift. OFID signed with Fundtech in April


2015 and it took around three months to implement the bureau piece, with the relatively short timespan put down by Edo to the fact that most of the messag- es were out of the box from the SAP sys- tem, with the main tasks being to hook up the bureau and the SAP system back-end and implement the virtual private network (VPN) connection. The implementation of SAP’s Loans


Management system is taking longer. ‘It is one of the most critical parts and the challenge is basically that it is designed for commercial banks, so we have to perform some modifications,’ says Edo. Testing is currently underway, with all of OFID’s loan or product types now defined and with being cross-checked by the business. All historical data will be migrated to the new loans platform and, with planned cutover


© IBS Intelligence 2015


by the new year, along with some phas- es of the treasury system, all of the pieces should be in place, marking a significant OFID digital transformation from a few years ago. Although there are some parts still to


fall into place, OFID has already experi- enced a significant improvement in the speed and ease of its operations, transpar- ency and in its ability to support its benefi- ciaries, including being able to make pay- ments in seconds not days. On the payments side, previously


around 30 per cent were managed man- ually, and OFID used a mix of global, local, intermediary and correspondent banking arrangements so the remaining 60 per cent of payments went through various banks’ proprietary online bank- ing platforms. As well as the costs and inefficiencies associated with this, OFID did not have complete visibility of its cash position. It is predicting a 20-25 per cent return on investment from the Swift bureau in the first year. As well as the benefits stemming from STP, it has better financial risk management and govern- ance now. Ultimately, all of the operational


improvements mean OFID is better able to fulfill its mandate to play an important role in alleviating poverty through facilitating better infrastructure, strengthening social services, and promoting productivity, com- petitiveness and trade. It has gone from largely manual to highly automated, with resultant knock-on benefits to those that it seeks to help.


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case study: ofid


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