Become enthused! EM Group benefits from SEPA already

‘Without enthusiasm, effort is wasted. Enthusiasm catches on, leading to results.’ In his day, this was the philosophy of Ensio Miettinen, founder of Ensto Oy, the origin of EM Group. The Group’s spirit still embodies a similar, watchful desire for progress, which is also evident in its financial administration. In this area, it provides the SEPA project with additional impetus.

“If we keep doing new things and moving forward instead of settling for the routines which financial administration always, out of necessity, includes, our work will continue to be meaningful,” explains Marjo Heino, Cash Management Specialist for EM Group. She is in charge of the Group’s payment transactions and liquidity management, as well as ensuring its timely SEPA-readiness.

SEPA planning in EM Group began as early as 2007. Despite the at times vague information on the SEPA-readiness of systems linked to financial administration, work has proceeded steadily. According to Heino, the issue of when background system suppliers will have their SEPA updates in order, for example, remains uncertain – or whether they are going to implement the related changes at all.

“We only have a clear go-ahead for our payroll system, which will be updated for SEPA in the autumn of 2010.”

According to Marjo Heino, EM Group aimed to be certain of obtaining correctly functioning SEPA payments well before the end of 2010, when the transition period in Finland ends.

“We could no longer afford to linger in a state of uncertainty and under no circumstances wanted to be caught in the potential logjam of projects towards the end of 2010. Solid and timely payment traffic constitutes one way in which a company can display the right attitude towards its suppliers and clients.”

“We also need to prepare for the fact that SEPA is by no means a done deal. More system changes are in prospect and our goal is to be on top of these as well.”

Implementing EM Group’s SEPA project together with OpusCapita began in the autumn of 2009. The SEPA migration plan drawn up by OpusCapita formed the basis for this work.

Since changes had to be made, a simultaneous decision was taken to renew the related equipment. EM Group invested in a new virtual server, on which OpusCapita's fully SEPA-compatible payments software, OpusCapita Payments Plus, is installed for use by the Group’s financial shared services.

The software is used to handle the Group’s payments in Finland and Estonia. Other international units handle their payment transactions independently. EM Group operates in 19 countries in Europe and Asia.

OpusCapita converts data into SEPA XML format from six different systems: the Group’s three ERP systems, two payroll systems, and the travel and expenditure management system.

“This is how we will operate until the very last of our ERP systems is updated to SEPA.”

Banks join in phases

Marjo Heino explains that EM Group’s SEPA project has demonstrated the validity of a time-honoured truth: system changes are successful only when both parties take care of their share, reserve the required resources and are prepared to do the work. Good results cannot be achieved if the required effort is not made.

For a couple of weeks, Heino personally tested the Payments Plus software and the throughput of SEPA XML materials to the bank, using real payments material. EM Group began sending SEPA payments to Nordea, even though its other preferred bank was not yet ready. Full readiness will not be achieved until the autumn of 2010, but this is not a problem for OpusCapita. Until then, OpusCapita will also send payments to the bank in the LMP and LUM2 formats, using the old PATU connection.

“The new materials have been fault-free at all times and the connection to the bank has functioned perfectly. We have had problems only with some payments going to Central Europe. These payments were returned to us because the local bank was unable to receive materials in XML format.”

EM Group’s financial shared services send out approximately 5,700 payments each month, most of which are now SEPA payments. Very few foreign payments denominated, or payments in a currency other than the euro, are transferred outside the SEPA area.

In EM Group, all SEPA payments are handled in the same way: they are transferred in the same format, for the same domestic payment price, through the same clearing centre, and at the same speed.

“There is an immediate benefit of several thousands of euros per year. With SEPA, we also have the opportunity to consider whether the monetary transactions of our subsidiaries operating in EU countries and using the euro can be directed centrally through financial shared services in Finland. We already receive the account information of our subsidiaries and monitor their liquidity,” says Marjo Heino, EM Group.

EM Group owns and develops industrial enterprises and real estate. Companies owned by the Group include Ensto Oy, which manufactures electrification systems and supplies, and Efla Oy, which specialises in lighting components for airfield runways. Turnover is EUR 200 million and the Group has approximately 1,400 employees. EM Group has operations in 19 countries with manufacturing facilities in Finland, Russia, Estonia, France and Spain.

This article and more information about OpusCapita’s SEPA services can be found at OpusCapita Journal 1/2010.