Project case ASICS: reimplementing the company code
Founded in 1949, ASICS is a global sports brand on a mission to champion the benefits of movement on the body, and the mind. It’s why the company is called ASICS which stands for ‘Anima Sana In Corpore Sano’, or a ‘sound mind in a sound body’. In 2020, ASICS had a turnover of 328,784 million yen. With subsidiaries all over the world, ASICS wanted to standardize and make its treasury operations more efficient.
In 2017, to further optimize their treasury function, ASICS Europe decided to implement the treasury management functionality of SAP. Besides the SAP Treasury and Risk Management (TRM) module, ASICS Europe also implemented SAP Cash Management (CM), SAP In-House Cash (IHC) as well as the SAP Bank Communication Manager (BCM).
With this came the decision to set up a new company code that will separate the treasury and commercial activities within ASICS Europe BV (AEB) as the tax ruling for AEB only allows this company to provide services and do business in Europe. In addition, the new company code (ASICS Europe Treasury) ensured global reach and provided cost savings and standardization as ASICS foresees treasury activities in Europe, Japan, and the Americas.
ASICS soon realized that the original plan to service their entities in other regions with the IHB created in Europe would not go as planned. Instead, the different regions would be supported with a local solution. Therefore, splitting into two company codes became irrelevant.
Further, after using SAP TRM, CM, IHC and BCM for a few years, ASICS discovered that creating a legal entity administered in two different company codes was time consuming while executing their day-to-day processes, which were as follows:
- Consolidation of accounting entries: The accounting of the core business processes (i.e., commercial/sales) took place in AEB. The accounting of the treasury and IHC process took place in AEB Treasury. To form a consolidated set of books, the accounting entries needed to be consolidated into AEB. This required manual work as ledger entries were replicated from AEB Treasury into AEB through a manual entry process.
- Internal deal mirroring: At ASICS Europe (and subsidiaries), any FX exposure is hedged externally by AEB Treasury. It is subsequently internally delivered to the correct company code (AEB) by entering an internal deal contract. The internal deal needs to be entered manually but is automatically mirrored in the other company code (AEB Treasury). However, this process of manually entering the deal for the internal side soon was labor-intensive, which needed to be avoided.
To solve the shortcomings mentioned above, Zanders proposed various alternatives. After conducting a few workshops with the Treasury Department, it was decided to discontinue all the current processes (TRM, IHC, GL accounting) in the company code representing ASICS Europe Treasury and re-implement it in company code representing AEB. Accordingly, the company code representing ASICS Europe Treasury was discontinued, and all GL accounting now takes place in company code representing AEB. Hence, a single company code for the single legal entity. This saved treasurers time on labor-intensive activities, such as replicating accounting entries into company code representing AEB. Further, as internal dealing only occurred between company codes representing AEB and AEB treasury, ASICS would no longer have to use the internal dealing functionality by merging the two company codes. Removal of these activities would make the processes more efficient.
Zanders and ASICS identified that the proposed solution would require high implementation effort. It would also lose the flexibility to quickly split the TRM and IHC processes into a new legal entity. However, as the pros outweighed the cons, ASICS decided to go ahead with the merging of the two company codes.
The project started with Zanders updating the decision forms, configuration, and master data conversion documents created in 2017 during the SAP TRM and IHC implementation project, which reflected the changes, risks, and implications of migration.
After which, Zanders performed the configuration and unit testing of the new functionality in a development system, ensuring that it would not disrupt the treasurers’ daily activities while the project was ongoing. In addition, Zanders performed comprehensive unit testing to ensure all scenarios are included and using “My Standards” to ensure the payment structure is intact and still valid. Once Zanders updated the configuration in the system, the previous configuration documents were also updated to reflect the new changes in the system.
Moreover, once the treasury team signed the documents, ASICS business users performed a user acceptance (UAT) test to familiarize themselves with the new way of working.
In addition, Zanders guided ASICS stakeholders to prepare an extensive cutover plan detailing step by step activities that would need to be performed by the team. Finally, the team executed rigorous cutover rehearsals, ensuring no significant issues were encountered during the go live.
Take a step back
ASICS took a great deal to investigate their current processes and see what was working and what was not. A decision might be logical now, but it doesn’t mean it will still be in the future. ASICS showed how you can still move forward even when taking a step back, improving their processes and making them more efficient. Eugène Tjemkes, Head of Global Business Transformation Finance at ASICS adds: “I am very pleased with Zanders. They took care of everything that needed to be picked up. We have chosen a partner who really knows what it is all about.”