In its quest to be the top financial services company in South Africa, RMB Investment Services, part of the First Rand Group, has implemented the Oracle Financials system. Oracle Financials is a complete, integrated e-business solution for financial management.
Oracle`s partner, KPMG, undertook the implementation.
This has resulted in RMB Investment Services being able to offer better financial services to its customers, drive enterprise profitability, and build a smarter business.
RMB Investment Services (RMBIS) falls under the First Rand Asset Management umbrella and incorporates RMB Unit Trusts.
RMBIS sells and provides structured financial products, such as offshore investments, equity funds, endowment policies and equity unit trusts to the market.
The RMB Financial Services Fund was the top-performing fund in its sector, with a return of 26.3% outperforming the Financial Index by 5.5% for the year ended 30 September 2000.
The RMB Financial Services Fund offers strong growth potential, particularly when the financial sector is outperforming other sectors of the market. It is classified as a Domestic-Equity-Financial Services Fund.
The focus of the fund has been to concentrate the equity exposure towards the larger financial groups. Investment in the smaller financial groups has been limited. The domestic performance has been supplemented by exposure to foreign financial stocks, which comprise 11% of the fund.
RMBIS has grown considerably in its first four years of existence.
"When we started we had one unit trust fund and 7 000 investors. At the end of 2000, we had 19 unit trust funds and 50 000 investors and this number is continually growing, " says Gert Vorster, CEO at RMBIS.
"We rapidly outgrew our previous Accpac financial systems which couldn`t handle large volumes of transactions and growth such as additional structured financial products."
In addition, Vorster says, prior to the implementation of Oracle Financials, the company took 14 days to reconcile its accounts. RMBIS reconciles its cash and this is a complex process. RMBIS is one of the few companies in this industry to do daily reconciliation.
"Accpac was unable to handle complexity so we had to do cash reconciliations manually," he says.
"We searched for a financial system which could handle growth and increased volumes, and which was flexible. We required a new financial system that would improve internal efficiencies, enhance reporting capabilities and provide fully automated functionality."
RMBIS chose to implement the Oracle Financial product set, including the general ledger, accounts payable, accounts receivable and cash management modules.
"Oracle Financials offered the best solution on the market and was able to deliver on the above criteria and still handle large transaction volumes," maintains Vorster.
"In the Internet economy, organisations that hope to succeed must transform themselves into e-businesses," says Hans Ziemkendorf, account manager at Oracle SA. "Oracle Financials provides the tools needed to tap into new markets around the globe, drive costs out of a business, streamline business processes, and generate financial information quicker. "
Oracle Cash Management is an enterprise-wide solution for managing liquidity and controlling cash.
Accurate cash forecasting is a worldwide best practice, enabling effective use of funds and reduced risk of insolvency. Oracle Cash Management gives direct access to expected cash flows from operational systems.
This module supports forecasting in any currency, across different organisations, for multiple time periods. It bases a forecast on future transactions, such as orders and invoices, or historical transactions, such as payments and receipts.
"Timely bank reconciliation is crucial to protecting cash," continues Ziemkendorf. "Oracle Cash Management offers comprehensive bank reconciliation capabilities, enabling companies to maintain accurate cash balances, identify and resolve exceptions, manage bank errors and monitor fraud. Automating bank reconciliation dramatically reduces the administrative time and costs."
Oracle General Ledger enables global data management; it is a comprehensive financial management solution that dramatically enhances financial controls, data collection, information access, and financial reporting throughout your enterprise.
Oracle Payables, an expenditure management tool, streamlines the procure-to-pay process while providing strong financial controls and strategic financial information. .
Oracle Receivables, an invoicing and collections management application, streamlines order-to-cash process while providing strong financial controls and strategic financial information.
"We chose KPMG to do the implementation since KPMG consultants were able to do customisation without us losing Oracle`s technical support, and this was a major criterion," explains Vorster. "Normally with customisation one has to change the core financial system and if this is done, one loses support for the product."
KPMG is the global network of professional advisory firms, which aims to turn knowledge into value for the benefit of its clients, its people and communities. As a leading generation consulting firm, KPMG Consulting focuses on providing today`s business with practical, innovative business consultancy that addresses strategy, performance improvement and the implementation of supportive technological solutions
As part of the implementation for RMBIS, KPMG Consulting customised the standard functionality of the cash management module to be in line with the existing in house procedures.
This has enabled RMBIS to reconcile multiple transaction lines to multiple statement entries," says Carl Bothma, managing consultant at KPMG Consulting.
"Customisation had to be done outside of the core financial system, so that the core code would not be affected. The flexibility of Oracle Financials lends itself to creating the customisation in the background without the user noticing that any customisation is being done," maintains Bothma.
About 30 RMBIS staff members are using Oracle Financials. Daily transactions are created on an administration system that batches out into files in the evenings.
"The daily transactions created by our administration system are automatically imported into Oracle Financials during the night and ready to be reconciled first thing in the morning," continues Vorster. "The payments to investors are created out of Oracle Financials, which also updates the clients` or investors` bank accounts.
"In addition, the add-on programme that the KPMG Consulting team wrote, gave us the required flexibility to add additional unit trusts and structured investments when needed, which has further contributed to the success of the project.
"With the Oracle Financials product set, manual intervention is only needed in exceptional circumstances, thus cash management occurs daily. We are now able to close our bank accounts within one day after month-end and reporting is completed within a week after month-end," says Vorster.
Through the deployment of the product set, RMBIS has been able to reconcile its accounts on a daily basis.
The solution has not only increased the company`s ability to process monthly transaction three-fold (from 9 600 to 29 000), but also enabled the company to reconcile its books at month-end within 24 hours and completely automated its internal administration processes.
"As for cash management we are one of the few management companies where cash is balanced daily," comments Vorster.
Another benefit that RMBIS has seen through the product deployment, is that the reconciliation process is now automated, where as previously it had to be activated manually. "We no longer have to do things manually and we can now handle more transactions.
"In terms of flexibility we can add more financial products anytime we want with a very smart time-to-market factor," Vorster points out.
"One of the added benefits that the Oracle product suite provided during the implementation was that the system was sufficiently scalable to deal with a doubling of transaction volumes in the period from start to completion of the project," Bothma adds.
Vorster says that RMBIS is considering installing Oracle`s Discoverer and/or Financial Analyser to enable RMBIS to have better management information and gain more advanced management reporting abilities.
Oracle Financial Analyser is a complete application for financial reporting, analysis, budgeting and planning. Oracle Discoverer enables a system to be set up that lets users create and run their own custom reports.
"Working with Oracle and KPMG we can now look forward to being even more successful in the future," Vorster adds.
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