Shipping Forecast

Bottomline TreasuryXpress helps Asyad Group navigate towards its vision of a strategic global treasury

In partnership with Bottomline TreasuryXpress, Asyad has been able to bring visibility and confidence to its financial metrics following a major group restructure. The work completed by this partnership is one that TMI applauds as the winner of 2021’s Corporate Recognition Technology Award for Best TMS Implementation.

Evolving from an almost entirely manual treasury set-up to one where the latest technology is being deployed has advantages far beyond process efficiency, as Muhsin Alrustom, Group Chief Financial Officer, Asyad Group, will attest.

When Oman Shipping was brought under the wings of the Omani government-owned Asyad Group (and rebranded as Asyad Shipping), its project to implement the Bottomline TreasuryXpress platform centralised treasury for the entire group of 15-plus maritime, port, free-zone and land-based logistics businesses.

Drivers for a TMS

Manual processing had long-afflicted Asyad Shipping’s treasury operations. This meant operating globally across multiple sectors with a fleet of 60 vessels – each a special-purpose entity (SPE) in its own right, with its own bank account – was increasingly challenging.

With around 35 banking relationships and more than 200 accounts covering these SPEs, and manual processes dominating, cash flow visibility was limited. Accessing the latest cash balances often took four days to acquire and the lack of visibility compromised accurate forecasting and rapid decision. This was exacerbated by the delays and errors caused by manual sign-offs for payments. Worse, treasury could not pool cash to invest it optimally, nor draw down on its facilities and match the maturities of its investments with its cash needs. It was, says Alrustom, “all rather frustrating”.

It was clear to him that a TMS would prove vital to harness the advantages of the planned restructure. The incoming system would need to complement the integration between the firm’s existing ERP and its multiple banking partners, and eventually deliver a central treasury function that could move treasury from cost centre to “cost-saving centre” – potentially even a profit centre.

Selecting the right system – with the scalability to fulfil its eventual role as a group treasury system – was key. Alrustom had first-hand experience of several systems. Being part of a government-owned organisation demanded adherence to an exceptionally rigorous selection process. With TreasuryXpress making the cut following a successful proof-of-concept demonstration and detailed Q&A session, it was awarded the contract in mid-2019.

“This Award is a testament to the excellence of Asyad’s management and financial vision,” says Bottomline’s Tom Leitch, Director Sales and Business Development for Treasury. “It’s also a testament to our partnership, which allowed us to advance our treasury management technology and also our implementation approach. To achieve success with a project of this magnitude and with this level of strategic impact in a six-month period was really something quite spectacular. All of this wouldn’t be possible without the vision and leadership of Muhsin as CFO, and as a result his group saved over $21 million dollars.”

The implementation journey

The new TMS being integrated with the existing ERP cash management and payments functionality and alignment with all banks and accounts was required to ensure seamless SWIFT messaging (mostly MT101s and MT940s).

The practical project work was controlled in the main by the very experienced Alrustom, who was able to plan and manage the phased implementation, in partnership with a dedicated TreasuryXpress team.

The first phase saw a new front office set up to deal with cash management, financing, and funding strategy. This freed up the middle office to take on debt management, risk management, and compliance, with the back-office handling treasury operations such as payments, funding, and cash calls from the other operating units. Full visibility across all bank accounts and the group’s hedging and debt portfolio took around six months, with all SWIFT MT message flows at this stage being aligned with TreasuryXpress.

Visibility-plus

TreasuryXpress has enabled Asyad Group to go further. Its fleet renewal strategy is a case in point. This is an ongoing and costly practice required to maintain the high standards of its vessels. “Having visibility over funding and cash, the cost of financing, and the maturities of our loans, has really helped us in terms of timing the sale of assets and refinancing facilities,” explains Alrustom. “In 2019 alone, we were able to refinance five of our facilities with a combined saving of more than $21m. That would not have happened if we didn’t have the visibility that TreasuryXpress gives us.”

The implementation of centralised treasury also brings the diverse group of logistics-focused entities under one umbrella, with an IHB facility already established. This has significantly reduced the number and cost of transfers and other bank services and enabled optimal treasury investments in both short- and longer-term portfolios. Indeed, with a financing income of more than $12m reported in Asyad Group’s 2020 annual statement, Alrustom is convinced of the benefits of an IHB facility which, he again acknowledges, “would not have been possible without the TMS”.

“Our goal is to help companies like Asyad unify traditionally disparate financial functions and achieve accurate and real-time financial intelligence that fuels strategic decision-making across the enterprise,” Leitch adds. “With that unification and deep level of visibility, Muhsin was able to make some very impressive  financial decisions and take action on them swiftly, intelligently, and profitably.“

The results and the enthusiasm of Alrustom speak volumes: the future of Asyad Group’s treasury looks bright. TMI is in no doubt that the partnership between Asyad and Bottomline TreasuryXpress is a worthy winner of the 2021 Corporate Recognition Technology Awards for Best TMS Implementation.