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ArvinMeritor’s Financial Shared Services Division Centralizes
Accounts Payable Processing For Subsidiaries and Divisions
with ACOM’s EZPayManager Laser Check and ACH Solution
THE BACKGROUND
Inside, outside, under the hood, under the car or truck – no
matter were you look – you can probably find an ArvinMeritor
presence. The Troy, Michigan company is a Tier One supplier
of a broad range of integrated systems, modules and
components to the worldwide automotive industry. They operate
more than 150 manufacturing facilities in 27 countries, employ
approximately 32,000 people, and recorded fiscal year 2002
sales of nearly $7,000,000,000.
ArvinMeritor was formed in mid-2000 with the merger of two
leading automotive industry suppliers: Arvin Industries, Inc.,
known for products such as exhaust systems, springs, shock
absorbers and fluid filters; and Meritor Automotive, Inc., a leader
in trucks and trailers, as well as components and systems for
the light vehicle market.
In the late 90s, the company mounted a campaign to address its
growing corporate complexity and increasing cost pressures by
focusing intently on ways to streamline operations. The goal
was to eliminate waste by achieving economies of scale through
the new companies selected best practices for its processes.
One phase of that effort was the formation of the Financial
Shared Services (FSS) department, located in Columbus,
Indiana, to identify areas within the financial operations of
ArvinMeritor that could be centralized and then, develop the
processes with which to accomplish that mission.
According to Janet Cooper, a senior business analyst in
Corporate IT assigned to FSS, an immediately obvious problem
existed in the accounts payable operations of several
geographically separated divisions. Together, those divisions
generated approximately 3,000 payments per month.
Checks were being generated from data in four disparate
financial management systems:
- CA CAS application on a IBM mainframe
- A legacy system called Vision on OS/390
- QAD MFG/PRO on Unix
- Oracle ERP running on Unix
Each back office software system generated a different file
format, and each facility produced its payments in a different
manner.
ArvinMeritor’s Commercial Vehicle Systems (CVS) Business
Group had used a stand alone check processing application
with a sheet-fed check printer that required multiple steps for
processing, assigning check numbers, printing checks and
signing the checks. The systems also required the use of a
folder-sealer machine. The CA CAS application they
used passed all AP check information to the standalone
system for check processing. CVS’s move to implement
a new Oracle ERP presented an excellent opportunity to
reengineer the AP check writing process with a common
business solution that could be shared with all the
Business Groups in North America.
The Light Vehicle Systems (LVS) Business Group, who
used the Vision legacy system, had to load the check data
on a disk, input it to a laser printer, and output on
preprinted, numbered check forms. If a failure or a jam
occurred, the entire process had to be restarted. Postprocessing
involved monitoring the printer, signing, folding
and stuffing – all manual.
LVS also had locations that used the QAD solution and
would pull a report for the invoices to be run for the week,
check it against the actual invoices, and make any
necessary corrections. Then they would pull another
report to create the file to be sent to a dot matrix printer,
where the checks were run using a two-part tractor-feed
form. If the printer got offline or malfunctioned in any way,
all of the checks had to be voided and rerun. After the
run, the checks had to be decollated, burst and signed.
“We needed one check process that everyone would
use,” Cooper said.
THE SOLUTION
In early 2002, the QAD representative suggested
exploring the EZPayManager solution from ACOM, a
QAD business partner. EZPayManager appeared to offer
the power, flexibility and expandability that the FSS vision
required. After extensive evaluations of the competing
solutions, FSS selected the ACOM solution.
EZPayManager enables users to replace their expensive
preprinted check forms, with electronic check templates
(which are securely stored on their computer).
When a check run is needed, the back office software
spools the check data out to EZPayManager.
EZPayManager then merges the financial/ERP data with
a stored electronic check template and sends the merged
file to a MICR-enhanced laser printer for check
production. The software can also format the data in the
form needed to transfer funds electronically, using the
banking industry’s ACH electronic payment system. Both
capabilities - plus a variety of ways in which remittance
advice information can be transmitted - fell within the company’s
range of requirements. Initially, the software was required to
serve three different back office applications, with the fourth
added to the project during the implementation process.
In addition to the payment processing software, the
EZPayManager Total Solution can include:
- Xerox laser printers MICR-enhanced by ACOM
- Folder-sealer equipment
- Security check stock
- Check Fraud Alert (positive pay)
- Secure-A-Card PCMCIA cards and readers for secure
storage of company data, MICR lines and signatures
- MICR toner engineered specifically for the printers to be
used
- Professional check form implementation services
- Maintenance agreements
ACOM also provides two exclusive guarantees: a 30-day total
satisfaction money-back guarantee, as well as a MICR
guarantee (stating that the MICR quality of checks generated
will meet or exceed all American Bankers Association
performance standards and specifications when used as
specified).
THE IMPLEMENTATION
ArvinMeritor’s EZPayManager’s server software resides on a
dedicated Windows 2000 Server in Columbus, and the
EZPayManager client software is now in place at each of the
participating unit locations. Two Xerox DocuPrint 4525 MICRenhanced
Network Laser Printer Solutions from ACOM are
installed at Columbus, as well as one at each of the participating
unit locations. Formax folder-sealer equipment is used at four of
these sites. The company also purchases security check stock
and MICR laser printer consumables from ACOM.
The server software includes check printing, electronic ACH
payments and e-mail remittance notifications. ACH functionality
was a major requirement according to Cooper and it presented
ACOM with a special challenge. Signatures and individual
account data are hard-coded into the server software. ArvinMeritor performs all of its ACH activity though a single
bank. So, ACOM was asked to do special coding to separate
the various vendors and checkbooks for the ACH run. (The
company did not acquire ACOM’s CheckFraud Alert module,
since each of its back office applications had its own positive
pay program.)
“One of the key considerations in choosing ACOM was
that we have a single point of contact for any problems we
might encounter,” Cooper said. “If we have a problem with
a printer, with the software, with the folder-sealer, with
any part of this complete solution, we call ACOM.”
The biggest issue standing in the way of a universally
applicable payment solution within ArvinMeritor was that
each management software system generated a different
data format. To centralize the process, FSS determined
that a common data format would have to be used. They
enlisted ACOM’s Professional Services group to create
conversion software for the respective back office
systems.
Essentially, ACOM manipulated the data format of each of
the back office systems to fit into a new, universal format
that would be compatible with EZPayManager’s Load
program. Building a new format flexible enough to
accommodate the various data sources was extremely
complex, but it avoided having to make multiple data
formats compatible with EZPayManager.
“If I were doing it again, I might approach it differently,”
Cooper said. “We’re requiring ACOM to use our data
format. In the future, I think I would work closely with
ACOM to create the best format for EZPayManager. I
would look for an easier layout.”
In addition to the conversion programs, ACOM
implemented check forms for each participating unit that
are virtually identical except for their different unit
information, account names and numbers, and
signatures. “It is hard to tell them apart,” Cooper said.
Installation and training was a comprehensive, two-day
process, performed on site in Columbus, according to
Cooper. In the installation process, the ACOM
professional services expert reviewed and documented
the step-by-step process, devoting the second day to
training. Since the initial implementation, Cooper has
performed all of the client installs.
For new sites, the implementation process is very simple,
as long as they are using the Oracle, CAS or MFG/PRO
systems, said Cooper.
Where the accounts payable process was previously
totally isolated within each unit, the current process finds
each generating its own payment data, then transmitting
the data by FTP over the company’s WAN to the
EZPayManager server in Columbus. The payment data is
processed and formatted on to the respective stored check form
there.
For those units opting to maintain disbursements locally, the
payment files are returned by FTP directly to the MICR-laser
printers situated on their networks. For others, the checks are
printed in Columbus and mailed directly to their recipients.
Corporate tax department checks are routed directly to a printer
located at the corporate headquarters in Troy, Mich., by the FSS
staff.
ACH payments and e-mail remittance can also be transmitted
centrally, since they follow banking industry formats and require
no paper stage. To certain large vendors, such as steel
companies, ArvinMeritor does FTP wire transfers, often with
thousands of lines of remittance information.
SUCCESS
According to Cooper, the future is a busy one for both the Financial
Shared Services department and, correspondingly, for ACOM.
Since going live last year, FSS has won corporate approval to make
ACOM and EZPayManager ArvinMeritor’s Partner-of-Choice for
payment solutions. The company’s mid-term objective is to bring
approximately 121 locations into the system – all using the same
software, check stock and ACH process. Collectively, they
generate some 11,000 accounts payable disbursements per month.
“It is a good system,” Cooper said. “It does what ACOM says it
does. In addition, ACOM has the professional services support to
pick up the slack where we need it. We intend to keep them busy.”
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