ABSA has implemented a solution called Transparent to automate its transfer
pricing processes throughout the group. The company has successfully
streamlined its transfer pricing model for greater transparency, having a
significant impact on its profits, taxation and governance.
Cortell, a global provider of intelligent business solutions, was awarded
the tender to automate ABSA's transfer pricing processes by developing and
implementing its Web-enabled Transparent solution. Cortell has a proven
track record in the financial services arena and has already successfully
implemented a transfer pricing function and application at other large South
African financial institutions.
The application had to address ABSA's inefficiencies to perform analysis of
transfer pricing costs. Cortell needed to establish a centralised transfer
pricing function and governance to validate entries prior to being posted to
the general ledger. It also had to address the lack of visibility for
transfer pricing results and methodology.
"Cortell was chosen to implement a transfer pricing solution for group
profitability because it could deliver the unique user requirement, which in
our case is different to just another shelved market product being sold by
many," says Wim Veltkamp, GM of group finance IT: specialists functions at
ABSA. "They are very professional in their approach and understanding. This
is not only one of the most successful projects that I have been involved
in, but also the one that stands out due to its excellent management and
Prior to the implementation of Transparent, ABSA had a select few business
units that were operating on the transfer pricing model. Profitability
analysts within each business unit would perform the task manually, which
proved to be extremely time consuming. Compounding the issue was that each
business unit took its own approach. This meant that customers and other
business units within ABSA would receive varying formats and levels of
Additionally, senior management would only see the results in the general
ledger, which meant they could not drill down into the detail to manage the
costs. Before it could roll the transfer pricing project out to all of its
business units, it had to deal with a number of issues including the huge
amount of manual work required to perform journal results; no processing
automation; lack of manual results validation before processing to the
general ledger; and poor communications between business units.
"Cortell has a long history with ABSA and the key project team included a
wealth of experience in terms of understanding the Company's business as
well as technical expertise that would ensure the necessary customisation
could be done," says Greg Bogiages, director at Cortell Business Solutions.
The solution is fully Web-enabled, which means that no software needs to be
loaded on user computers. This meant that ABSA could rollout the solution
countrywide without the concerns and constraints of loading new software.
Furthermore, Cortell's solution and architecture ensures that the
presentation and business logic layer can be separated from the data layer.
This allowed Cortell to implement the solution on the standard Oracle DBMS
employed by ABSA.
Transparent was designed and developed in South Africa by Cortell's South
African office, which means that first-, second- and third-tier support is
In terms of the general ledger reports, Cortell developed a notification
engine to allow the system events to notify users via e-mail automatically;
audit log functionality to provide a full record of data changes; copy and
delete functionality to allow for the mass copy and deletion of services,
structures and volumes; and validation reports to provide the users with a
record of validation errors.
Additionally, Cortell developed a processing utility to allow users to
review results before they were posted to the general ledger; automated
updates and importing of general ledger information pertaining to cost
centres, general ledger accounts and divisions; and soft lock functionality
to allow the administrator to lock down the system for data changes during