Case Study: How SWIFT Provided the Right Channel for the BBC
An inside view of the BBC’s own SWIFT implementation project was provided by Chris Corner, deputy treasurer at the British Broadcasting Corporation (BBC).
The national broadcaster has provided a radio service since October 1922, with television added 14 years later although the latter service was suspended for the duration of the Second World War. A year after the BBC came into being an annual licence fee of 50 pence (88 US cents) was introduced to fund the new service, while the first combined radio and TV licence, costing £2, was introduced in June 1946. As the BBC does not carry commercial advertising (the first UK commercial channel not being introduced until 1955) the licence fee provides the main source of the BBC’s total income, which amounted to £5.1bn in 2012-13.
As Corner told his audience, over the past 18 months the treasury department at the BBC has changed its structure quite profoundly. This follows the licence fee settlement agreed with the UK government in October 2010, which essentially froze the annual licence fee at £145.50 for six years and took 20% out of budgets across the corporation. There was a finance-wide initiative to look at how the corporation could continue to deliver what it needed to but by costing 20% less. The solution came partly from headcount – one treasury professional left during this time while many of the other savings have been driven by organisational and technology changes.
In terms of structural changes, the BBC consolidated its two existing treasury teams – its public service team and the treasury of BBC Worldwide, the corporation’s commercial arm. This provided an opportunity to realign and update the treasury’s governance structure. The BBC also set up a new back office function that allowed it to consolidate all its accounting and reporting capabilities into a single dedicated team. Technology changes were also implemented in support of this, including an extension of the functionality of the treasury management system (TMS) and the implementation of a bank account management (BAM) platform.
Main objectives
The BBC’s largest and most challenging technology project at this time was to join up to SWIFT. “There were two broad objectives to joining SWIFT, simplification and greater independence from our banks,” said Corner. “On the simplification side, SWIFT allows us to access all of our reporting payments functionality on a single platform. This is useful not only to the BBC’s cash managers, but across the organisation, particularly for the system administrators. For the bank independence part, we were very keen to get ourselves into a position where we were able to move between banks as and when we required it.”
For the implementation plan, the BBC first evaluated how it wanted to connect to SWIFT. The organisation chose to connect via an SSB, which, it was decided, would make the best use of its resources. This decision was made in 2012, and was followed by the technical build that took the project well into 2013. On the SSB side, Fundtech had to ensure that its system met the BBC’s requirements, while the BBC needed to ensure that its SAP accounting platform and its TMS could speak to the SSB.
The contractual onboarding of the BBC’s banks has also taken a long time. At the outset, the corporation just wanted to work with its three main clearing banks and started discussion with this group. “In time later on this year, we will roll things out across the rest of our banking group,” said Corner.
As the SWIFT implementation project has rolled on, Corner described how the realities of the experience have compared against his expectations at the start of the process. For example, he noted that the bank contractual formalities had been far from straightforward, as there was no standard approach. “There were also many connectivity challenges during the technical development phase, whether this was getting the BBC and Fundtech networks talking to each other or getting users access to the Fundtech platforms,” said Corner. “There’s one example where we found that the BBC’s version of Java was causing a block between the two systems. Nobody had thought to work out whether this would be a problem before as it was a level of technical detail way beyond our understanding.”
The BBC’s progression from SWIFT’s FIN message standard to FileAct had been far more involved than expected at the start of the process. “Not many corporates have been extending their SWIFT functionality to include FileAct, so perhaps that is why there isn’t as much knowledge out there,” said Corner.
BBC re-phased its implementation to stagger the go-live dates, both per territory and per bank. Banks have separate implementation teams, but another factor is where they are coordinating things centrally they want to focus on one implementation at a time in case of problems – rather than, for example, going live in India, Mexico, the US and the UK at the same time.
Corner also made an important point regarding project management: “Focus on getting the right balance between business as usual – getting the day job done – alongside the SWIFT implementation,” he recommended. “There are times where you have to make a choice between the two and in those situations you always have to focus on business as usual. That then obviously disrupts the whole SWIFT project, which has been an ongoing challenge for us.”
The presentation concluded with the following series of key takeaways that Corner had learnt from the BBC’s SWIFT implementation project:
*This case study is taken from fuller reports on day one and day two of Fundtech’s ‘Insights EMEA conference 2014’ hed in London.