Nedbank has automated its activity-based costing and transfer pricing processes with the implementation of Cortell Business Solutions' Web-enabled 'Transparent' solution.
The company has successfully streamlined its transfer pricing model for greater transparency, having a significant impact on its profits, taxation and governance.
Cortell, a global provider of intelligent business solutions, has a proven track record in the financial services arena and has already successfully implemented a transfer pricing function and application at various large South African financial institutions.
Nedbank identified a requirement for the implementation of an automated transfer pricing solution throughout the group. Although it was already performing transfer pricing, it was experiencing many problems associated with manual processes. The company immediately compiled a comprehensive list of problems to address the existing manual transfer pricing issues.
"To address these issues immediately, Nedbank decided to implement Transparent as a fast cycle initiative (FCI) with a timeline of three months for the end-to-end implementation of the software package. Regardless of the strict deadlines and enormous pressure imposed on Cortell by Nedbank's technical and business resources, the team delivered on all agreed milestones within the proposed budget and timelines," says Neelan Pillay, Nedbank Group Finance Project Manager for the implementation of Transparent.
From the list of problems, the team prepared a high-level functional and process requirement document which would ensure that the application selected would address their current concerns. They required a uniform approach to transfer pricing in terms of naming standards, data integrity, data format and timing. Furthermore, users had to be empowered, enabling them to analyse and access transfer pricing data without being totally dependent on information from various sources or even worse, identifying changes in the general ledger afterwards.
Pillay says they required the necessary audit trails and controls over the transfer pricing data and processes. "We needed a centralised repository for transfer pricing data which would enable business units to produce MIS as and when required from the underlying data. The existing manual processes were a huge administration burden on the business units."
"Transfer pricing was handled in a somewhat ad hoc fashion, with different service providers handling it in different ways, using different formats for their invoices, and issuing invoices at different times. We needed a uniform, consistent approach, to develop a transfer pricing culture that would result in standardised procedures," he explains.
Transparent is fully Web-enabled, which means no software needed to be installed. The entire implementation spanned over five weeks and included infrastructure preparations where Nedbank had to source the necessary servers for the implementation of the application.
The application is highly scalable, ensuring access to a large number of users. Furthermore, the solution requires limited bandwidth which allows Nedbank to provide countrywide access to all branches. The architecture ensures that the presentation and business logic layers are separated from the data layer which meant the solution could run on the Microsoft SQL Server DBMS.
Pillay says Cortell's solid business and technical understanding was key to the success of the project. "Cortell's project team had a wealth of experience in terms of understanding Nedbank's business and its technical expertise ensured the necessary customisation could be done. Cortell has a proven track record; they have successfully implemented Transparent at various large South African financial institutions."
Nedbank selected an enterprise-wide license option which means it has an unlimited user licence with no additional licensing costs and constraints. Cortell also provided training to a large group of users throughout the group and all the documentation was customised. Documentation that was customised included user manuals, administrator manual, training materials, installation manual and Nedbank technical documents.
"Working with the Cortell team was an absolute pleasure due to their professional ethic and teamwork attitude," concludes Pillay.
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