Pursuing its accelerated innovation strategy to help customers take advantage of the newest technology and business process innovations, SAP will make these functional enhancements available to SAP customers as extensions to mySAP ERP 2005. The announcement was made on the eve of Sibos, the world’s premier financial services event, being held in Sydney, Australia, October 9 – 13.
Although European Union (EU) member states in the “euro-zone” have a single currency, each domestic market within the union is still marked by complex and costly local payment infrastructures that prevent the free movement of international payments. The European Union cites studies estimating that transaction costs under the current system are equivalent to up to 2.5 to 3 percent of Europe’s total gross domestic product (GDP). The SEPA initiative seeks to harmonize the conditions, rights and obligations for the more than 450 million citizens and all companies performing financial transactions in the 25 EU member states, the three European Economic Area countries (Iceland, Liechtenstein and Norway) and Switzerland. Effective January 1, 2008, standardized cross-border euro payments will become as quick, secure and cost-efficient as domestic payments within the 29 countries in SEPA.
The SEPA package from SAP will be designed to help companies meet the challenges of the SEPA framework as defined by the European Payment Council (EPC), improving straight-through processing and allowing increased transparency into payment flows. SAP plans to make the package available in mid-2007 for existing SAP customers that are current on SAP maintenance contracts and running SAP’s enterprise resource planning (ERP) application, releases SAP R/3 Enterprise or higher. The package is one of several planned enhancements tapping SAP’s ERP and banking software functionality to help customers worldwide cut costs and streamline corporate banking processes. See today’s related press release, titled “SAP and SWIFT to Drive Simplicity and Insight in Corporate Banking.”
Standardization increases business benefits
The SEPA package will enable more efficient and cost-effective cross-border payment processes by supporting the most important new ISO 20022 payment schemes as defined within the SEPA rule books of the EPC. SAP customers will be able to generate these messages directly from within their ERP system without having to implement additional middleware for data conversion. The software will be designed to support payment schemes including the newly created pan-European direct debit, the payment order and the bank statement message. In addition, SAP will deliver a bank mandate management component which can be used by both corporations and banks to manage the entire life cycle of the debtor authorisations to initiate collections.
In further support of customers impacted by the SEPA initiative, SAP will provide additional functionality to mySAP ERP 2005 that will include SAP Bank Relationship Management, an application to increase payment-flow transparency and compliance of corporate payment transactions. This component will also be able to accept and process the incoming ISO 20022 payment status report message and other message schemes. As SEPA foresees a new data transfer method for mass payments (SWIFT FileAct), SAP will also offer SAP Integration Package for SWIFT, which provides seamless integration between mySAP ERP and the SWIFT infrastructure.
“SEPA’s initiative to create a standardized payment infrastructure throughout Europe will have a similar impact as the introduction of the euro,” said Thomas Balgheim, senior vice president, Financial Services, SAP AG. “It will change the way corporations and banks do business significantly. As part of SAP’s release strategy to deliver innovation more quickly to customers, the enhancements to mySAP ERP will gear our customers to fully reap the business benefits created by SEPA, such as improved cash flow and cost reductions.”