Alvara cash management group
Progress® Application Partner ALVARA uses
Progress® Sonic® ESB to simplify integration
using a standards-based SOA.
CHALLENGE
To develop a comprehensive
software system for secure
and efficient cash transactions,
ALVARA needed a way to easily
and securely connect different
IT systems and platforms.
SOLUTION
Using a Software as a Service
(SaaS) model, the ALVARA ICC
cash management system is a
service-oriented architecture
(SOA) implementation based
on Progress® Sonic® ESB,
which gives ALVARA a unique
selling point in terms of total
cost of ownership, flexibility,
integration options, scalability,
and availability.
WHY PROGRESS® SOFTWARE
Sonic ESB provides a reliable
backbone framework for their
technology, easily integrating
information with existing
applications and business
processes and offering the
scalability needed to support
heavy transaction loads.
CASE STUDY
Taking Advantage of a Market Opportunity
Over the past decade, the German trade and banking market suffered when numerous
large and small cash transport companies were found guilty of massive fraud activities,
misappropriating hundreds of millions of Euros of clients’ money. At the time, there was no
proven control process in place to monitor cash exchange services between the Deutsche
Bundesbank, the National Bank of Germany, and commercial enterprises and retail banks.
In particular, the cash counting services performed by the cash transport companies
were not secure, and the losses suffered by commercial enterprises were, in many cases,
devastating. Because there was no visibility across the cash management cycle, it was
easy for one person involved in the process to mishandle the cash, and there was no way
to track where the problem occurred or to hold anyone accountable.
The entire industry was confronted with the challenge to make cash management
more reliable for all parties. The Deutsche Bundesbank defined new standards for cash
accounting and now offers a cash counting service called CashEDI (Cash Electronic
Data Interchange) which provides customers the possibility of carrying out transactions
electronically using standardized electronic data exchanges. Against this backdrop,
Progress Application Partner ALVARA Cash Management Group saw the market potential
for a total cash management solution that would allow all participants involved in the
process an automated way to send, receive and track cash transactions, close any
potential safety gaps, provide complete transparency across the process and meet the
new CashEDI standards.
“We realized there was a significant need in the market for a solution that could serve everyone
involved in the cash cycle—retailers, banks, cash in transit companies and the National
Bank—with one platform that could provide total visibility across the process and track each
detail every step of the way,” explains Michael Hohlfeld, Project Manager for ALVARA.
ALVARA developed ALVARA ICC (Interactive Cash Control), the first, and currently the only,
comprehensive software system for secure and efficient cash transactions. ALVARA ICC
enables monitoring without interruption of the entire cash cycle. The solution is built from
the ground up as a service-oriented architecture (SOA) implementation based on the Sonic
ESB, which gives ALVARA a unique selling point in terms of flexibility, integration options,
scalability, and availability. The solution enables a link-up to CashEDI for all business
customers, account service providers and banks. ALVARA is the first company in Germany
with official certification from the Deutsche Bundesbank for the Cash EDI format.
Benefits:
Today different German
companies from retail, banks,
and cash in transit are using the
platform to minimize their risks,
save time and reduce costs,
and 90% of all electronic cash
transactions in Germany are
now processed through
ALVARA ICC.
Choosing SOA and Sonic ESB
ALVARA was created in 2007 by the founder of CMS, a small company based in Leipzig,
Germany and a specialist in IT solutions for cash transport companies. The main purpose
of ALVARA was to offer business services to banks and commercial enterprises that would
allow them to send and receive cash from the Deutsche Bundesbank in a more secure and
transparent way.
The challenges of developing a new solution were significant, because ALVARA ICC would
need to connect all of the different IT systems and platforms on the market. “We knew that the
only way to build a solution that could easily, quickly and securely connect different parties
using disparate systems was through a service-oriented architecture (SOA),” says Hohlfeld.
ALVARA looked to numerous vendors to partner with for the solution, including Oracle and
Microsoft, but chose to work with Progress and leverage the Sonic ESB. “Sonic ESB could
easily integrate information with existing hardware, applications and business processes,
so we felt it would provide a reliable backbone framework for our technology. Sonic ESB
also offered the scalability we needed to support heavy transaction loads and was a
proven reliable technology—a critical factor when managing millions of Euros.”
An enterprise service bus (ESB) is software infrastructure that simplifies the integration
and flexible reuse of business components within an SOA. An ESB provides a dependable
and scalable infrastructure that connects disparate applications and IT resources,
mediates their incompatibilities, orchestrates their interactions, and makes them broadly
available as services for additional uses.
In most organizations, technological heterogeneity is more the rule than the exception. To
integrate applications within an SOA, it is necessary to both span new service-enabled
applications as well as existing applications. An ESB simplifies connection of new
applications, Web services, and hundreds of other technologies, including batch files,
application servers, legacy middleware products and packaged applications.
Software as a Service (SaaS) Model was also a Factor
ALVARA was also drawn to Progress’ experience with Software as a Service (SaaS).
“Progress provided us the opportunity to offer our solution in a SaaS model which gives
us the flexibility to easily react to market changes and quickly deliver those added benefits
to our customers. In addition, our clients can take advantage of our services without
consuming the costs or headaches associated with implementing and maintaining their
own in-house systems.”
ALVARA ICC was developed using a three-tiered architecture. The front-end of the system
is a Web portal where clients can access the system to order cash from the Deutsche
Bundesbank as well as account for cash that will be sent to the Deutsche Bundesbank. For
the first time, all parties involved in the process now have total visibility into near real-time
information and can see each step of the process. Between the portal and the database
is Sonic ESB which acts as the engine for transporting all messages and business logic.
Sonic ESB integrates with any company’s systems and automatically converts their data
into the CashEDI format required by the Deutsche Bundesbank.

During the development of ALVARA ICC, ALVARA worked with Cegelec, the largest provider
of services for Cash Counting machines in Germany, who had a good working knowledge of “Progress provided us the
Sonic ESB. ALVARA also partnered with VÖB (Verband öffentlicher Banken), one of the most opportunity to offer our
secure and reliable Data Centers in Germany which now hosts ALVARA ICC through the SaaS
solution in a SaaS model
model.
which gives us the flexibility

The first electronically advised deposit to the Deutsche Bundesbank using CashEDI was to easily react to market
successfully carried out in early 2008. changes and quickly deliver
those added benefits to our
Early Success and Market Penetration customers. In addition, our
Since its recent launch in early 2008, the success of ALVARA ICC has been tremendous. clients can take advantage
Different German companies from retail, banks, and cash in transit are using the platform to of our services without
save time and reduce costs, and ALVARA expects that number to quickly grow to 50%. Today, consuming the costs or
90% of all electronic cash transactions in Germany are processed through ALVARA ICC. headaches associated with
implementing and maintaining
WSN Sicherheit und Service GmbH, a holding and security services organization, is
their own in-house systems.”
using the ALVARA ICC platform to achieve more efficiency, transparency and security
for their customers. WSN can advise customer deposits electronically to the Deutsche Michael Hohlfeld,
Bundesbank, access information about the cash cycle online and process change orders Project Manager, ALVARA
through the Internet. And in Leipzig, a Swedish furniture store is advising the deposit data
for P-containers on a daily basis using ALVARA ICC.

“Customer adoption has been rapid and our users are extremely happy with the results,”
says Hohlfeld. “Before, they had very little visibility into the process and no control over
how long it took. Now when they put cash into the process, they can watch the cash cycle
each step of the way and know it will be much quicker than the previous process for the
money to appear in their account.”

ALVARA ICC is also giving large retailers the ability to manage the data from all of their cash
in transit companies from one platform. Hohlfeld explains: “A big retail company in Germany
may have 5000 branches and deal with 20 different cash in transit companies. Each of those
companies may have five or six cash centers, so you have a minimum of 100 data sources to
manage and track. ALVARA ICC allows them to easily do this in one platform.”

According to Hohlfeld, it is possible for its customers to save four to five full time employees
with the solution due to efficiency gains. “Companies no longer need multiple people to
manually track the money throughout the process. The system offers them complete visibility
across the cash management cycle, so they are able to speed the processing time, manage
their risks while at the same time reduce the number of people involved in the process.”
Cash in transit companies are also achieving efficiencies, reducing costs and saving time
with ALVARA ICC. “In the past, a driver with a cash-in-transit company would wait one to
two hours at the Deutsche Bundesbank for the cashier to finish inputting the data into the
system. Now, most of this information is submitted before the truck even arrives, and the
use of bar-coding technology has significantly expedited the process. Hohlfeld estimates
ALVARA ICC has accelerated the processing time for cash in transit by 400% from two
hours in the previous system to just thirty minutes.

Expanding its Services throughout Europe and Latin America

ALVARA believes it has just scratched the surface in terms of market penetration. In
Germany there are approximately 100,000 large commercial enterprise locations that need
to receive and send cash. On average 26 cash transactions take place each month for each
location, and, in total, around 31,200,000 cash transaction take place every year. There are
also 60 cash transport enterprises throughout Germany, and ALVARA plans to expand its
services to other parts of Europe as well as Latin America.

“Progress has given us the technology and support to build a competitive product and the ability
to help influence the direction of the market. They have been an excellent partner for us and we
have every expectation we will continue to conduct successful business together in the future.”

About ALVARA Cash Management Group

The ALVARA Cash Management Group AG, headquartered in Leipzig, is a new service
provider in the area of cash management. Competent specialists with extensive
professional know-how founded the company with the aim to offer all market participants About Progress Software
more security through transparency and greater efficiency through independence. They
Progress Software Corporation
developed an online platform to support and monitor the cash logistic process from the
(NASDAQ: PRGS) provides
branch through the cash center to the central bank.
application infrastructure software
for the development, deployment,
ALVARA AG offers consulting services, the online platform ALVARA ICC, as well as
integration and management of
electronic interfaces for popular products in the range of cash management software.
business applications. Our goal
Across Germany, organizations operating cash in transit companies and cash centers
is to maximize the benefits of
are able to participate in the specialized procedure known as CashEDI of the Deutsche
information technology while
Bundesbank by working with ALVARA AG, leveraging its software interfaces or accessing
minimizing its complexity and total
the ALVARA web portal. ALVARA AG was recently awarded the Security Innovation Award
cost of ownership. Progress can
2008 for ALVARA ICC in the “Safest Security Logistics“ category.
be reached at +1-781-280-4000.

www.progress.com

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