Founded in 1995 in San Jose, California, eBay is a global commerce platform and payments leader. It achieves this through:
- eBay, the world’s largest online marketplace, which allows users to buy and sell in nearly every country on earth.
- PayPal, which enables individuals and businesses to securely, easily and quickly send and receive online payments.
- GSI, which facilitates e-commerce, multi-channel retailing and digital marketing for global enterprises.
eBay’s extraordinary growth from its early roots to a world-leading enterprise in less than 17 years has created a unique set of challenges. The company has a strong domestic presence in every country in which it operates, resulting in a large number of bank relationships and accounts. At the same time, with a high volume of low-value transactions in every country, it is essential to achieve visibility and control over group cash, and maintain an efficient infrastructure.
Previous Project Phases
An important means of achieving this objective was to rationalise bank connectivity using the SWIFT network. This project began in 2009, initially with one bank, but by end 2010, it had expanded to 15 banks. Working with multiple banks enabled eBay to develop a track record and expertise in the most effective connectivity methods by rigorous testing of different file exchanges, and connectivity proof of concept.
Project Challenges in the Early Phases
There were numerous technical challenges in meeting stakeholder expectations during these early bank implementations. They ranged from non-standard interface messages to a lack of support for store and forward message transmission via the service bureau, or a general lack of bank expertise or experience in working with corporates using the Standardised Corporate Environment (SCORE) model.
During these initial implementations, eBay built up considerable expertise in SWIFT connectivity. This made the company confident that it could add its larger banks across multiple geographies quickly and successfully. In 2011, eBay began the migration of its activities with the Bank of America Merrill Lynch (BofA Merrill) team. This involved putting in place an appropriate technical architecture based on SWIFTNet, a centralised bank identifier code (BIC) solution and FileAct store and forward capabilities, which had to integrate seamlessly with eBay’s back office enterprise resource planning (ERP) system.
The aims were two-fold:
- To create a flexible and versatile infrastructure that would meet eBay’s current and future cash management needs, and enable ‘plug and play’ addition of new banks in the future.
- To leverage the centralised BIC capability offered by the bank to establish efficient support processes, reduce costs and simplify future expansion at eBay.
Project Planning and Execution
The implementation with BofA Merrill was very well executed, particular bearing in mind the project scope, with more than 250 bank accounts across 37 countries. eBay had developed internal SWIFT capabilities and implementation experience in SWIFTNet, which when combined with bank’s project management capabilities and SWIFTNet expertise made for a very successful implementation. There was a dedicated project team involving both eBay and bank resources, with regular project meetings to discuss action items, issues and escalation. These meetings were well documented with regular updates provided.
The project went live in December 2011, with considerable success. A major factor in this was the quality of communication with BofA Merrill, and the efficiency with which the project was executed. The bank dedicated a project facilitator with considerable experience in managing complex projects throughout the process to maintain proactive communication and project discipline.
For example, at the beginning of the project eBay and the bank worked together to construct a full inventory of all accounts in detail. This included information about supported SWIFT message formats and legacy platform identifications for all eBay accounts to ensure that the future FileAct configurations used the correct source of data from the bank’s data servers. Completing this process in advance was an important investment as it ensured a realistic and cohesive approach to project planning and execution.
The project team then laid out a detailed plan to migrate every account from the legacy platform to SWIFTNet, in close co-ordination with the centralised BIC rollout plan at BofA Merrill, a first in its history. With multiple regions involved and the added complexity of testing across 37 countries, the project managers implemented effective risk mitigation strategies and an open communication channel for all parties involved.
One challenge was a delay in setting up automated straight-through processing (STP) testing for a centralised BIC solution. The bank’s support team stepped in to execute testing cycles manually and performed payment message receipt, type (book transfer, domestic transfer or cross border), and content validations (accounts are credited/debited correctly). Once the connectivity was established, a subset of test cases was rerun to confirm STP setup.
Another success factor was that production reports were delivered in parallel via the previous host-to-host connectivity and the new SWIFT FileAct interface for approximately one month. This allowed significant testing, validation and assurance that there would be no production issues once the data was directly interfaced from the SWIFT channel to eBay’s ERP system.
The teams shared a log of test cases and execution statuses to effectively communicate with each other and with support resources in all 37 countries.
By combining project management discipline, significant expertise on both sides, and a clear view of eBay’s objectives, the project was completed far more smoothly and rapidly compared with previous SWIFTNet implementations, although many of these had been much smaller and less complex. Six hundred accounts have now been migrated, with more to follow. eBay has been able to reduce costs by terminating a host-to-host connection.
In addition, eBay now has a streamlined and robust connectivity channel, seamless integration with the in-house ERP and the ability to enhance operational efficiency by aligning information with local time zones and regional staff.
- This case study is based upon an entry into the gtnews Awards for Global Corporate Treasury 2012, sponsored by Bank of America Merrill Lynch (BofA Merrill). The winners of this year’s annual awards, now in its third staging, were only revealed at a gala dinner on 24 May at the Sofitel Grand Hotel in Amsterdam, the Netherlands, after the opening of the two-day gtnews Forum for Global Corporate Treasury. To see a full report on all the Awards winners and the gala dinner on 24 May please click here.
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