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Why Oxbow’s Treasury is Sticking with a SWIFT Service Bureau

  • By Andrew Deichler
  • Published: 9/1/2015
pipesAs evidenced throughout the AFP SWIFT Buyer’s Guide, choosing between a SWIFT service bureau and Alliance Lite2 is a major decision for corporate treasury departments today. When Oxbow Carbon LLC, one of the world's largest recyclers of refinery and natural gas byproducts, selected its service bureau, Alliance Lite2 didn’t exist. But given the numerous services offered by Oxbow’s service bureau, Axletree Solutions Inc., the company is unlikely to ever jump ship.

AFP spoke with Wayne Whitaker, vice president, treasury for Oxbow, and Mohan Murali, president and CEO of Axletree, about SWIFT implementation.

AFP: What advantages do you find in using a SWIFT Service Bureau?

Wayne Whitaker: When we implemented SWIFT, Alliance Lite2 was not in existence; it wasn’t around. We were one of the first private companies to join SWIFT. We went with a service bureau for a couple of reasons. First, we had a very short implementation runway that we had to get through. Second, we had concerns about hosting our own middleware for SWIFT. We were not interested in doing that; we were not interested in having the in-house expertise to run middleware on a day-to-day basis, because experience has shown that, after an implementation, resources tend to get pulled away for other things. When tweaks have to be made or emergencies pop up, resources tend to disappear, and treasury is stuck with a problem that it can’t solve by itself. A SWIFT Service Bureau grants that capability.

AFP: What should a treasury department look for when they vet a SWIFT Service Bureau?

Whitaker:
When we were first looking for a SWIFT Service Bureau, we wanted somebody that was big, and had staying power. We selected a large company, but unfortunately their sales team was much better than their implementation team. We wound up floundering for a while, before we decided to cut the cord and go with a different service bureau. That’s when we changed to Axletree Solutions, because they not only could sell their solutions, they could implement and manage them. They far exceeded our expectations in terms of what they said they could do, whereas the larger service bureau we selected originally turned out to be a terribly wrong decision.

Mohan Murali: What we are seeing, from the technology being used today, is that currently there are not enough software service vendors and the bigger players are looking to rehash their existing software to be promoted as a software-as-a-service (SaaS). SaaS is a different kind of technology, and using existing software is not going to cut it.

In addition to making their products truly SaaS-enabled, vendors also need to implement mobility. With the advent of tablets and much bigger smartphones, treasury departments are looking for data as they are on the move. So having the SaaS application display data and having basic functionality on a mobile device is something people are looking for.

The other thing we are seeing is a shift toward bank connectivity optimization. More and more corporates are looking to do away with proprietary connections and are leveraging SWIFT as their bank channel for receiving data as they are sending out payments. One of our corporate customers initially estimated $600,000 annual savings from doing away with one-on-one bank portal connections. They ended up saving close to $1.2 million.

Whitaker: Is that connectivity directly from the enterprise resource planning (ERP) system, or is the connectivity where the treasury department is accessing the SWIFT software to do their transactions?

Murali: From the ERP to the SWIFT software. What we are seeing is similar to what was implemented for Oxbow—taking data from ERP and other in-house systems, and integrating it through a SWIFT connection. Understanding this need for integration, Axletree used Symmetree, a SMART integration tool to ensure seamless straight through processing between Oxbow’s ERP to SWIFT to their banks.   

AFP: How long did it take Oxbow to implement Axletree? Obviously after the experience you had with the first service bureau, you wanted to make sure you got the second one right.

Whitaker:
It took us longer to select our SWIFT Service Bureau than it did to implement it. Unbelievably, it was about six weeks. Now, keep in mind that we were already members of SWIFT with the original service bureau. We pulled the plug on the first one and reconnected with Axletree Solutions. But the SWIFT connections were already in place.

A longer version of this article appears in the AFP SWIFT Buyer’s Guide.

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