The document summarizes the implementation of an SAP treasury management system at OFID (OPEC Fund for International Development) to transform its treasury operations. Key points: - OFID previously relied on manual processes for treasury operations and sought to standardize/automate processes through an SAP implementation. - The SAP treasury system would centralize and digitize treasury processes like payments, cash management, financial risk management, and integrate them with OFID's existing SAP ERP system. - The goals were to increase efficiency, transparency, compliance and decision making for OFID's treasury operations through an integrated, automated treasury system.

1. The OPEC Fund for International De-
velopment (OFID) is the development
finance institution established by the
Member States of OPEC in 1976 as a
collective channel of aid to the devel-
oping countries. OFID works in coop-
eration with developing country part-
ners and the international donor com-
munity to stimulate economic growth
and alleviate poverty in all disadvan-
taged regions of the world. It does this
by providing financing to build essential
infrastructure, strengthen social ser-
vices delivery and promote productivi-
ty, competitiveness and trade. OFID’s
work is people-centred, focusing on
projects that meet basic needs - such
as food, energy, clean water and sanita-
tion, healthcare and education – with
the aim of encouraging self-reliance
and inspiring hope for the future.
From 2001 through 2011, OFID suc-
cessfully transformed her Information
Technology support operations from a
decentralized organization to an effi-
cient centralized unit through the stra-
tegic and visionary support of its pio-
neering leader Dr Deyaa Alkhateeb.
OFID IT has risen to the management
challenge of supporting continuous
business improvement by envisioning a
compatible IT strategy that supports
institutional reform. As the transfor-
mation effort continued in 2012, the
SAP Phase III system blueprint identi-
fied OFID treasury as the remaining
frontier in its Financial Operations
department, which had hitherto relied
on manual and non-integrated business
processes for its operations.
TREASURY TRANFORMA-
TIONAL OBJECTIVES
· Eliminate manual procedures
and optimize treasury business pro-
cesses, thereby fulfilling operational
and accounting compliance for financial
(Continued on page 2)
A decade of transformation: OFID ten years
on; published June 2013 as revised in March

2. transactions.
 Centralize and standardize treasury-
specific business processes in order
to achieve alignment and synergies
across the organization, thereby
eliminating multiple systems and ex-
cel sheets.
 Increase position and exposure fore-
cast transparency, providing insights
into available cash to optimize the
utilization of working capital.
 Utilize treasury employees more
effectively and efficiently, thereby
eliminating error-prone, time-
consuming and labour-intensive man-
ual activities.
 Enable more effective decision mak-
ing and reduce costs over the long
term through standardization and
automated approval workflows.
In order to meet - and surpass the
above expectations –the decision mak-
ers in treasury decision wanted greater
transparency and control over complex
business processes related to managing
and streamlining of payments, cash, li-
quidity and risk management. At all
times, physical cash had to be accounted
for: where and when it WAS needed,
and what and who needed it? It was
therefore necessary for the treasury
team to better understand and manage
potential challenges with liquidity, coun-
terparties and exotic currencies. As a
strategic and go-to sup-
The core guiding principles of the
transformation project were:
Simplification: - Analyse oppor-
tunities to simplify and re-engineer
core business processes under a
common architecture and use
common components wherever
possible to enable transparency,
visibility and auditability.
Reusability: - Leverage existing IT
investments where possible and
“buy against built” IT strategy,
since OFID is not a software
house.
Automation: - Automate repeti-
tive and complex activities with
due regards to workflows, govern-
ance, risk and compliance require-
ments.
Integration: - Integrate core busi-
ness within existing system, there-
by guaranteeing a single source of
business truth.
Information: - Provide a founda-
tion for OFID business intelligence
using an appropriate business
warehouse solution and centralize
SAP TRM Solution Overview
SAP software for treasury and risk man-
agement is natively integrated into SAP
ECC for increased transparency and
control. It provides a single source of
information and automates many critical
treasury based business processes, thus
eliminating extensive manual data gather-
ing and rekeying, duplication of efforts,
reconciliation and human errors. The
system promises to be more inclusive of
coordination and visibility by:
 Reducing treasury management
costs, transactional cycle times and
resource demands.
 Enhancing decision making and re-
ducing unnecessary bank charges,
overdrafts or borrowing
 Streamlining payment processes and
ensuring reporting/compliance
 Improving efficiency and automation
by using straight-through processing
 Optimizing operating capital to fund
operations with robust cash and li-
quidity.
SAP TRM offers comprehensive suites of
functions for the management of treas-
ury and financial risk to enhance insight,
control and compatibility with manage-
ment’s digital transformational drive;
hence its adoption.
“Treasury organizations
evolve from local to regional
centres and global depart-
ments using technology and
processes to enable in-
house banks, payment
factories and centralization
of activities as FX trading,
investment and funding.
The use of SAP treasury
applications facilitate these
challenging tasks to our
customers”
– ConVista Consulting,
Project Implementation
Partner

3. Transforming Treasury Operations
It is the core task of the OFID treasury
department to ensure liquidity and to
manage portfolios and exposure to fi-
nancial risk. To do this effectively and
efficiently, the Treasurer uses analyses
of the current liquidity and risk situation
to make decisions about future invest-
ments and undertakings, taking into ac-
count the conditions of the financial
markets. After deal capture and settle-
ment, the transfer of all relevant infor-
mation into financial accounting has to
be ensured. Managing positions in terms
of controlling interest or cash payments,
execution of corporate actions etc. had
to be covered by the new system.
Key Business Benefits
 Automation of all treasury-based
business processes for managing
financial transactions.
 Integration and ease of operational
and accounting compliance moni-
toring and reporting.
 Real-time reporting and manage-
ment of foreign exchange, interest
rate and counterparty risks.
 Online, real-time and 360 degree
view on cash position and facilitat-
ing better investment and financial
decisions.
 Reduction of operating cost
through better financial and debt
management.
 Optimization of working capital
with the help of improved liquidity
forecasts and reporting.
Payment and Bank Communica-
tion Services
The system provides an integrated pay-
ment and bank communication platform
that centralizes and optimizes all pay-
ment processes, thus reducing cycle
times and costs, while helping to ensure
compliance. For a global institution such
as OFID, international payments and
transactions amongst its numerous gov-
ernments, companies and beneficiaries
(as well as the gathering and reconciling
of data from multiple financial institu-
tions) should not be “business as usual”
Also, a payment approval workflow that
is automated and rules-based stream-
lines routing and provides -as additional
benefit - intuitive status monitoring,
which supports visibility in the payment
lifecycle. Bank communication is provi-
sioned with more seamless integration
with spreadsheet standards including
support for multibank gateway codes
from the SWIFT to help minimize exotic
currency risk. Streamlined payment pro-
cesses reduce cycle times and costs,
while helping to ensure compliance.
However, multiple point-to-point elec-
tronic interfaces, payment standards,
and data formats can increase support
costs and resource demands, as was the
case before Phase III. Treasury depart-
ments within multinational organizations
face the additional challenge of complex
business operations on a global scale.
Cross-border payments and transac-
tions among companies, as well as the
gathering and reconciling of data from
multiple financial institutions, are
“business as usual.” SAP software for
payments and bank communications can
help you meet these challenges head on.
Cash and Liquidity Management
Services
Cash and liquidity management is one of
the most critical treasury functions. Yet,
forecasting liquidity is complicated by the
amount of data that must be gathered.
SAP software for cash and liquidity man-
agement addresses this challenge with
features such as comprehensive and,
timely insight into global sources and
uses of cash – as well as the reporting of
internal cash positions. This system max-
imizes and automates cash flow visibility,
imports cash balances from all house
banks, and combines them with real-time
financial data from accounts receivable
and payable online from all operational
areas. Added to this are comprehensive
reporting and analytics capabilities for
even more effective cash management
decisions in “Business Warehouse”.
Cash Management Deliverables
 Restructuring of all planning levels and
bank clearing accounts determination in
line with account receivables and ac-
count payables
 Update of payment methods regarding
SWIFT integration
 Integrated memo records to improve
the quality of the cash position reports
 Integration of the new movements’
types from treasury and other product
types into the cash & liquidity position
forecasting.

4. Financial Risk Management Ser-
vices
The financial risk management compo-
nent of SAP TRM provides financial risk
analytics which assist treasury officers
manage market-based risks with greater
accuracy; -they can conduct real-time
reviews of cash positions, risks, com-
modity price changes, and currency con-
version rates with the incorporation of
dashboards and other visualizations, de-
cision makers can quickly calculate expo-
sures and identify risks.
Financial risk analytics can help deter-
mine in real-time the effects of market
risks – including interest rate, foreign
exchange, and commodity price fluctua-
tions on revenue streams, input costs,
and cash flows. Also, decision makers
can pinpoint counterparty risk exposure
to cash balances across global bank ac-
counts.
Risk mitigation strategies can therefore
be strategized to improve the quality of
hedge transactions and structure deals.
This approach enables the acceleration
of transactions and notifications to the
business. In addition, the creation of an
audit trail helps ensure that every hedg-
ing transaction is recorded and accu-
rately reported.
Key features of our digitized Treas-
ury
 Automation of Foreign Exchange
(FX), Listed and Over-The-Counter
(OTC) derivatives management ser-
vices
 Up to the minute money and market
risk analysis results
 Business partner and credit risk anal-
ysis reporting
 Investment portfolio analysis in line
with institutional policies and proce-
dures
 Centralized exposure and limit man-
agement services
 Hedge management and hedge ac-
counting services
 Integration into SAP Funds Manage-
ment for budgeting and availability
control tools
“The OPEC Fund is an institution that has
been evolving continuously since its incep-
tion 39 years ago. The OPEC Fund you see
today bears little resemblance to the insti-
tution of 20 years ago or even of 10 years
ago. This has been partly by necessity - the
development arena is constantly shifting -
and partly by design”
Suleiman J. Al-Herbish
Director General, OFID
Mr Jacobs Edo
Email: j.edo@ofid.org
www.ofid.org
SAP Systems Coordinator at OFID and also
doubles as the Phase III Project Manager. He is
also certified by SAP and the University of Ap-
plied Sciences and Arts North-western, Switzer-
land’s Business Transformation Academy as a
Transformation—Lessons Learnt
 Identify key internal change champi-
on
 Secure senior management buy-in
and support
 Understanding key business pro-
cesses and process re-engineering
 Stakeholder management is skill is a
MUST!
 Deep technological and innovation
knowledge
 Excellent communication skills
Conclusion
When completed, the SAP Phase III
treasury project will further leverage the
OFID digital transformation exercise. It
will also complete the provisioning of the
requisite integrated technological infra-
structure and services required to sup-
port the OFID stakeholders’ community
– Member Countries, Beneficiar-
ies/Borrowers, Employees, and Suppliers
- and significantly improve execution of