MasterCard ties data, ERP

In what is being billed as an integration first, MasterCard International Inc. and SPS International Ltd. have launched a software product designed to connect procurement information from MasterCard purchasing cards to popular ERP (enterprise resource planning) systems, starting with SAP AG R/3.

MasterCard SmartLink is designed to enable enterprises to streamline the monitoring, management, and administration of direct and indirect corporate expenses, company officials said.

The software is the first to integrate corporate purchasing card data with back-end ERP systems, said Tom Cook, senior analyst at AMR Research Inc. in Boston. In addition, the announcement signifies the next step in business-to-business commerce, he added.

“It’s not just assembling applications, now we’re looking at taking a process view,” Cook said. “We’re starting to see services come into play in the B2B market.”

The software will allow ERP systems administrators to generate transaction data specific to any corporate cardholder at any point of a transaction worldwide, said Philip Philliou, vice-president of e-commerce and emerging technologies at MasterCard Corporate Payment Solutions.

Offered through MasterCard’s network of member financial institutions, MasterCard SmartLink gives companies a means to drive effective e-procurement and to generate hard numbers on their ERP investments, Philliou said.

“Businesses that use the MasterCard SmartLink solution may greatly reduce the cost of processing paper-based purchase orders, which can often run as high as US$120 per order,” Philliou said. “Cost efficiencies are found in a number of ways, including [cutting] the time and staff involved to raise and approve a requisition.”

In addition, MasterCard SmartLink enables a business to automatically approve transactions, generate invoices, merge data with the general ledger, make split payments, and download individual transaction information without having to wait until the end of the month to receive the statements to track expenses, Philliou said. Full details of transactions are available for review by designated company officers within 48 hours of a purchase transaction, he noted.

Automating this generation of data will allow many enterprises to avoid costly mistakes now inherent in current methods of manually keying in transaction data, according to Shams Mahmud, a research analyst at IDC in Framingham, Mass. In addition, the software will allow companies to perform more sophisticated analysis on their corporate spending, he added.

“If they need to make a cost reduction, having data in a reasonably quick turnaround would help them,” Mahmud said. “To be able to shave expenses from one area or another is extremely important.”

Combining SAP R/3 with MasterCard SmartLink and a MasterCard corporate card will also enable a company to link its business processes with those of customers and suppliers, on-line and off-line.

“The concept is that, by automating the connections between suppliers and a corporation, a user of MasterCard SmartLink is actually integrating the complete supply chain,” Philliou said.

Despite the potential benefits of the software, MasterCard has tested SmartLink in only one pilot deployment, and integration issues may arise, according to AMR’s Cook.

“They’re just feeling their way through,” Cook said. “Once they learn from the SAP system, they’ll be able to roll it out easier. That’s why MasterCard is partnering with a systems integrator.”