Learn how leading precision manufacturer Ennovi overcomes challenges and achieves efficiency for restricted party screening integrated in SAP® with AEB.
Established in 1958 in the US, Ennovi is a leading designer and manufacturer of interconnect and mechanical products for a wide range of markets where precision is key. The company serves both existing and emerging sector needs, and its portfolio includes innovative solutions for battery, power, and signal platforms for the next generation of electric vehicles and components to support preventive and curative healthcare.
With a major focus on the fast-growing and continuously evolving Asian market, Ennovi's manufacturing sites also include substantial operations in China, India, Vietnam, Indonesia, and Malaysia. The company has a strong bent on sustainability – it received several awards in this area and is holding the platinum accreditation from rating agency EcoVadis.
“As a manufacturing company, we are not just about revenue generation,” says Robert Severino, Director for Finance Business Process Optimization at Ennovi. “We also acknowledge our social responsibility. Sustainability forms a big part of this and is always a consideration in our product development.”
In early 2022, Ennovi was acquired by Blackstone, the world’s largest alternative asset manager. As part of this, Ennovi’s entire organizational structure, systems, and processes were reviewed and reinvented with the goal of centralizing departments along divisional lines, fostering greater standardization in procedures & policies, and optimizing cost-efficiencies. These streamlining measures also led to a greater focus on compliance.
Ennovi spared no efforts to develop and strengthen compliance policies, standard operating procedures, training manuals, risk assessment processes, and e-learning systems. The ultimate goal of this methodical approach and comprehensive framework is to effectively ingrain compliance and establish it as a culture. A driving force of this mission is Froi Bayo, Senior Global Legal and Compliance Counsel at Ennovi, who joined the company in March 2023.
“Compliance is not merely lip service for us at Ennovi – it is an integral part of doing business,” explains Froi Bayo. “We work hard to continuously increase awareness and have the resources to ensure that we are compliant in all the locations we operate in.”
Ennovi maintains around 50,000+ records of suppliers, vendors, and customers in their database. In the past, screening Ennovi’s business partners against sanctions lists was based on inconsistent, manual processes. In a labor-intensive effort, teams would manually cross-check addresses on a case-by-case basis against publicly available information.
Considering the volume of checks and the frequency of changes in regulations, the overall process was cumbersome, highly time-intensive, and error-prone. To improve this situation, Ennovi invested in a basic screening tool a while back, but it failed to meet the company’s standards for cost-effectiveness, speed, and accuracy. It became clear that a more powerful and flexible screening solution was needed.
“Our previous tool still required a lot of manual work. It involved data extraction, content alignment, new data entry into a prescribed template, and final upload to get a sanctions list screening result,” Severino says. “There were too many steps and people involved in the process up to seeking legal and compliance counsel – it included a lot of back-and-forth by phone and email between the various parties until a compliance check was completed,” adds Bayo.
Ennovi’s Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) systems used to be highly disparate, comprising of various legacy systems. To harmonize the system landscapes and benefit from data consistency, efficiency, and transparency, Ennovi kicked off a large-scale project a few years ago.
On the ERP side, the company decided to move all existing applications to SAP® and manage the migration as a multi-phased rollout in the global company network. To date, the majority of the organization is working with SAP ECC6. By 2027, when the official SAP support for ECC6 systems ends, the move to SAP’s S/4HANA systems will be completed. On the CRM side, Ennovi opted for moving existing applications to Microsoft Dynamics 365 and the phased rollout project is estimated to be completed for all sites by 2025.
“The ideal situation is to have standardized ERP and CRM systems, all talking to one another,” Severino says. “With an automated compliance screening solution at the core of the system landscape. But we wanted to reduce manual efforts and optimize restricted party screening before the final ERP and CRM rollouts. So, we needed a screening solution that would easily integrate with all of them.”
The ongoing ERP and CRM system migrations were at the forefront of the Ennovi team’s mind when the search for a screening solution kicked off.
“In fact, that was my first question, when speaking with AEB’s Solutions Consultant Sebastian Zilm about AEB’s trade compliance management software portfolio,” Severino emphasizes. “As and when we are ready to migrate to S/4HANA, would AEB’s solution Compliance Screening with SAP integration be ready for it? When he confirmed that it can be configured within a few days, we felt that AEB was aligned with our future direction.”
But smooth integration with Microsoft Dynamics 365, seamless SAP integration, and migrating from one SAP system to another with ease were not the only requirements: Offering cloud-based access outside the Ennovi ERP and CRM systems was another criterion for the solution – one that AEB’s Compliance Screening easily fulfilled, too.
With regards to the actual sanctions lists to screen against, Ennovi was looking for a wide range of lists to choose from and up-to-dateness in line with the latest regulatory developments. They wanted flexibility for selecting the sanctions lists they needed rather than being tied to fixed content packages. The options and scope of AEB’s Compliance Screening software ticked all the right boxes and Ennovi opted for a combination of sanctions lists from the European Union, the US, the UK, and the United Nations to start with.
AEB’s Compliance Screening significantly streamlines Ennovi’s restricted party screening process. Integrated directly in their SAP system, Ennovi teams are now working with automated batch screening of customer and vendor master data. For non-SAP address data, they are running ad-hoc file checks as needed. The Compliance Monitor enables central access and quick decisions on any sanctions list matches.
The AEB solution eliminates redundant data entry and removes the bulk of manual checks, which saves Ennovi a lot of time. Once a new business partner is added to their system, Ennovi is now able to straightaway check if a vendor is listed on a restricted party list. This also applies to screening new prospects before devoting any time to them.
In addition to supporting digitization objectives under the organization’s transformation, AEB’s Compliance Screening is also helping to redefine Ennovi employees’ roles. By removing some of the more mundane tasks, staff can now be redeployed to more meaningful, value-adding work. “Our general counsel, who is the head of the legal department in the company, used to be tied up doing manual compliance checks. Now she is able to focus on more strategic work,” Bayo says.
According to Bayo, the temporary screening solution that Ennovi had previously invested in had 60 lists, many of which were not relevant to the Ennovi business. “The restricted party lists that we are now screening with the AEB solution are hand-picked and highly relevant to us. This also means that the search results are not random and bring a lot of focus into the work that we are doing,” he explains.
“The wide range of available restricted party lists that AEB offers gives Ennovi the flexibility to select the lists they need – now and in future, if and as their business changes. All lists are updated daily to ensure our customers always work with up-to-date content at all times,” Zilm adds.
The full compliance screening process, including logging of all check results, handling of matches, and documenting decisions takes place in one central system. One consistent set of data is used, and all screening records are logged and consolidated in the cloud. Compliance Screening from AEB delivers one central place and a view onto complete records to every user across the organization.
“If there is a potential issue with an ongoing order, I will know right away who I am supposed to speak with and what I am supposed to do with it. It is now so much easier for me to evaluate sanctions list matches and deal with related issues,” Bayo says.
Access to AEB’s Compliance Screening, even first-time access, is also directly available via Ennovi’s internal portal. There is no need for onerous IT configurations. Bayo appreciates the fact that he can gain access to the system in the cloud using any personal computer:
“I have a work-from-home schedule every week, such as on Fridays. And I don't have to log into SAP to access the compliance records. I don’t need my company laptop to open the Compliance Screening dashboard. It's easier and much faster,” he says.
As a Blackstone company, the Ennovi CFO is required to periodically certify that the company has not transacted with restricted parties. Previously, this needed to be cross-checked with finance officers at the various Ennovi sites, sometimes even requiring a site visit to manually verify records.
Now, Ennovi is ready for audits at any time: Everything is available and easily accessible in the central screening solution from AEB. Compliance logs with full audit trails are archived for 10 years, allowing for backchecking if and when needed.
AEB’s Compliance Screening solution allows users to define a ‘Good Guy list’, which is automatically screened every day. One of the challenges for Ennovi previously was that a party who had once been accepted by their system or classified as a ‘Good Guy’ would not be screened again.
This presented a dilemma as sanctions lists are subject to frequent changes and the status of business partners can change depending on their actions or evolving geopolitical situations. With AEB’s solution, parties on the ‘Good Guy list’ are also screened and flagged as critical if a new screening result returns with a restricted party list match.
Compliance Screening from AEB is a software as a service (SaaS) product, which also means that upgrades and updates take effect immediately, as they become available and without tying up any internal IT resources at Ennovi. This includes new software features as well as general improvements and performance upgrades. Ennovi always works with up-to-date software and screens against latest sanctions lists while its everyday business continues uninterrupted with the usual performance.
The AEB solution delivers additional benefits through the ability to define restrictions for specific locations on a very granular level – down to the postal code. This is a valuable feature in today’s turbulent geopolitical environment, where territories may be claimed by more than one country. This allows Ennovi users to place restrictions on parties in their database who operate in very specific locations.
“AEB understood our requirements and had a powerful standard solution that was straightforward to implement. Compliance Screening is so much more effective than our previous tool. It also requires far less data elements to accomplish the initial screening – just the name of the business partner is sufficient. Very little configuration was needed – the systems were able to speak with each other, with very few technical set-ups. And being a very lean organization, optimization of resources is vital for us.” Severino explains.
“The project implementation was smooth and seamless despite resource constraints on our side. AEB’s guidance and responses to queries were speedy and consistent, no matter who from the AEB project team delivered them. We were also very happy with the software training that AEB delivered. Our teams were motivated, and the user-friendliness of the solution made it easy for them to learn. AEB’s software training manuals were straightforward to adapt to our unique business requirements and we distributed them across our organization,” he adds.
From left: Robert Severino, Ennovi Director for Finance Business Process Optimization; Sebastian Zilm, AEB Solutions Consultant; Froi Bayo, Ennovi Senior Global Legal and Compliance Counsel
AEB’s Compliance Screening is equipped with a wealth of features that is continuously expanded. This includes but is not limited to the option to add a machine translation service for non-Latin names and addresses, subscribing to newly added screening lists, or including identification numbers (IDs) to the compliance check to further narrow down screening results.
Most features are available to users at no extra cost, as the pricing model of Compliance Screening is based on the number of address checks. There are also no restrictions, for example, on the number of users. “While we are not yet taking advantage of all available features, we are exploring them step by step and hope to use more of them in future,” Bayo says.
He also considers the solution as very intuitive to use: “It doesn’t require a lot of thinking,” he explains. “The user was certainly considered in the design of the product. I have seen quite a few screening tools out there, some of which are very complicated in terms of configuration and usage. The AEB solution is both feature-packed and powerful yet easy and straightforward to use.”
Currently, there are 15 Ennovi users across the legal, finance, and procurement departments using AEB’s Compliance Screening. In the near-term, the solution will be rolled out to the sales and business development teams, integrating with their CRM systems, and increasing the total number of users to more than 70. These teams are also keen to replace their current labor-intensive, ad-hoc, and error-prone process of screening prospects and customers.
Furthermore, Ennovi is looking to expand the scope of the current screening process. At the moment, automated screening focuses on the master data of vendor and customer addresses. In the future, Ennovi wants to extend the screening to also run automatically in the background of business transactions. At a later stage, Ennovi will also take a closer look at AEB’s Trade Compliance solutions Export Controls and License Management to include checks on business transactions for embargoes and license requirements.
The process will be step by step in order to carefully manage the company’s resources. But the Ennovi management team stands fully behind its compliance efforts, so these additional areas will certainly be considered for the next phase.