Taking Treasury to the Next Level – Corporate Recognition Awards 2018

Winner

Stanley Black & Decker  

Stanley Black & Decker (SBD) is a USD$13bn company with a common organisational goal to achieve revenues of $22bn by 2022. Determined to position treasury to support this ambitious target, SBD embarked on a project to simplify the company’s complex treasury set-up. This saw SBD simultaneously implement a treasury management solution, FIS’ Quantum™, and a payment factory, using FIS’ Trax™, while also centralising 100 ERPs down to one. 

This project involved a huge collaborative effort, with buy-in and commitment from SBD’s executives, IT function, the company’s 20-member treasury team, and a partnership with FIS. Through this initiative, SBD’s treasury team has already assisted the company in improving revenue. Moreover, treasury has greater insight into liquidity, helping the department, and the leadership team, to make better-informed decisions. This transformational project has also provided a competitive edge, with SBD now running a thoroughly modern treasury that is more than deserving of TMI’s Top Treasury Team 2018 accolade.

Highly Commended

PageGroup 

You could easily argue that a treasury team the size of a small army would be required to rationalise transactional banking in 94 subsidiaries across 41 banking jurisdictions, while simultaneously centralising and automating bank interfaces for a Global Finance System (GFS) implementation. Yet this was precisely the scale of the project undertaken and successfully completed by the PageGroup treasury team. The achievement is even more impressive given the size of the team – two permanent employees and three independent contractors.

Group treasury now has global oversight and control over banking facilities, while acting as a central banker for liquidity. Transactional processing has fully transitioned to a shared service centre set-up and its users take centre stage within a rationalised and efficient GFS environment. 

Throughout the project, the treasury team continued to maintain their day-to-day business functionality to the highest standard and have in turn become trusted advisers to both the executives and the business. These achievements, among many other benefits garnered throughout the project, make PageGroup a clear Highly Commended Treasury Team of the Year.

WWF 

As a non-profit organisation, WWF is constantly looking for opportunities to improve its operations and deploy donations as efficiently as possible for the purpose of wilderness preservation. As such, WWF embarked on a project to integrate its ERP systems with its banking platform, enabling all country offices to transmit payment information directly from their respective ERP systems to banks and receive secure status messages and statements. 

Together with PwC, WWF focused on a concept of ‘electronic payments and statements’ to automate the process and worked with key banking partners to deploy this solution – across a number of challenging geographies. The core solution was designed in a cloud ERP platform, in order to facilitate a faster adaption of the solution and achieve integration to the banking platforms. 

Treasury is now in full control of the organisation’s cash positions and has full visibility over outgoing payments. Electronic payments have enabled compliance with security rules, greater control and transparency in the country offices, and easier handling – all of which have helped the organisation in tracking disbursements and donations. The huge team effort involved to achieve all of these efficiencies is why WWF was chosen as TMI’s Best Non-Profit Treasury Team 2018.

Winner 

Microsoft 

To help improve working capital management and maximise cash returns, Microsoft’s treasury team has implemented an intercompany payments factory for all worldwide settlements – these are now centrally authorised by the treasury team through a new dashboard tool and accompanying workflows. 

The revamped tool provides full visibility on intercompany payments, meaning that treasury no longer encounters any unplanned funding issues. Treasury is also now able to precisely position the company’s cash balance and all the billions of excess cash are invested until the day they are needed. Other benefits include improved FX risk management and improved compliance. The Microsoft team also has plans to build on the new dashboard – and the clean, visible data it has provided – by leveraging Azure machine learning. This will enable better forecasting of cash flow needs and foreign currency exposure. 

Highly Commended

Winner

Ahold Delhaize  

Given the highly competitive landscape that food retailers operate in, Ahold Delhaize decided to implement supply chain finance (SCF) to build a stronger  relationship with its suppliers. Working closely with ING, Ahold Delhaize has now successfully rolled out SCF programmes in six countries including challenging geographies such as Greece, Romania and Serbia. 

The company opted for an inclusive roll-out strategy, covering its entire supplier base – one of the many impressive features of this project. Moreover, the innovative technical solution deployed for the latest SCF roll-out in the Netherlands fully integrates the SCF data exchange with Ahold Delhaize’s existing procure-to-pay process, and also the SWIFTNet FileAct connection with ING, through one centralised solution. 

Already, these SCF programmes have made a significant contribution towards improving the group’s working capital position and market valuation. They have also further enhanced the relationship with the company’s suppliers, helping them to garner their own working capital efficiencies. This project is the true definition of a ‘win-win’.

Winner 

Shell

Although Shell has been successfully using FIS’ Trax™ solution for several years, an upgrade was required. Rather than simply doing the minimum necessary to deploy the upgrade, Shell used this opportunity to undertake an impressive programme of work called ‘Cash Management Next Generation’. This involved simplifying and standardising the company’s banking landscape by: migrating to the FIS’ cloud solution; moving away from legacy formats to compliant XML messages; and simplifying Shell’s own internal architectural landscape.

After a successful pilot of the Trax™ cloud-hosted solution, migration of ERPs began in July 2018 and by the end of 2018, circa 70% of the company’s global transaction volumes were being handled by the solution. The remaining business units/ERPs will be migrated in Q1/Q2 2019, with the programme closing out in mid-2019.

What makes this project stand out is its forward-looking nature. One of the key objectives for Cash Management Next Generation was to be ready for disruptive factors such as open banking and PSD2. The platform is also able to incorporate new market developments such as SWIFT gpi. Additional internal controls and fraud prevention mechanisms are also in scope, making workflows more secure – demonstrating how leading treasury teams are leveraging technology to maximise new opportunities and adapt to ever-increasing threats.

Highly Commended 

LVMH  

As a multinational conglomerate, LVMH group manages very high volumes of cross-border payments. Like many organisations, the company had limited visibility over the progress of those payments, and neither certainty nor control over the settlement date. So, in late 2017 LVMH joined the SWIFT gpi for Corporates pilot project – testing the solution with six of its partner banks and FIS. 

LVMH sends payments to the relevant bank through FIS’ Trax™ payment factory solution, which the company was already using. Trax™ automatically applies a unique end-to-end transaction reference (UETR), which is then attached to the payment throughout its lifecycle to enable tracking, reconciliation and reporting. This applies to all cross-border payments whether in MT 101 or XML format. The bank’s system automatically sends back MT 199 and XML ISO PSR messages that provide the detailed transaction status, including fees and FX rates. Trax™ also provides a payments dashboard to enable users to track payments easily. 

Having experienced improved predictability and traceability of payments, as well as visibility over fees and the FX rates used for cross-currency payments, LVMH now plans to expand the use of SWIFT gpi to the rest of its banks.

Winner 

Honeywell 

In 2018, Honeywell initiated a review of the legality of eSignatures across the jurisdictions in which the company is present. Based on this research, Honeywell felt comfortable migrating from a culture of wet signatures to eSignatures using DocuSign, with the aim of leveraging digitisation to make the KYC process less painful and more secure. This was important since the company was in the process of undertaking some strategic spin-offs and setting up the divested entities as independent companies. Treasury wanted to be more agile and have more time to add value, rather than chasing signatures.

Honeywell challenged its three main European banks – Barclays, BNP Paribas and Deutsche Bank – as well as J.P. Morgan in the US to pilot a DocuSign solution, permitting eSignatures for the KYC and banking documentation associated with the divestitures. All of these banks have now stepped up to the plate in varying degrees, and Honeywell has become the first EMEA corporate to pilot DocuSign with banking partners. Thanks to this painstaking work, Honeywell has in place a bank-agnostic and standardised process for eSignatures via a digital solution (rather than an eBanking platform-based eSignature offering) that is flexible, secure, easy to use, and quick to implement.

Winner

Tesco  

With over 6,800 stores around the world serving millions of groceries and general merchandise customers every week, Tesco has significant exposure to commodities such as diesel, electricity, wheat, beef, coffee and sugar. To support the company’s ambitious vision of modern commodity trading, Tesco was looking to automate its treasury, cash management, trading and risk operations while managing liquidity and risk within a single TMS.

The team deployed Openlink, an ION Treasury solution, which delivers enterprise-wide visibility of cash positions, FX and commodity exposures in one system, including effective integration of automated workflows across treasury, front office, accounting, risk and back office. The new TMS enables real-time visibility into both cash and commodity exposures, leading to more efficient operations and hedging, as well as improved risk management. This project has also enabled the team to provide greater value and insight to the C-suite, shifting treasury’s relationship with the business towards a genuine strategic partnership.

Winner

Digital Realty  

Digital Realty has a global treasury team of just six people: one in Asia, one in Europe, three in the US and a global head. The company needed to guarantee 24-hour coverage for all regions and ensure all obligations would be met in the event of serious illness, cyber-attack, power outage or other situations that could put one region out of action.

Overcoming many challenges to do so, Digital Realty has now put in place a robust business continuity plan, with a 30-day rolling global obligation list, frequent co-ordination calls and training for every team member on all cash management platforms. The treasury team also developed a cybercrime training programme in 2018, and constantly strives to streamline processes using technology, freeing up their time for value-added activities.

As part of this project, the company worked with Citi to implement EUR and GBP notional pools – and a notional APAC pool is in the pipeline – thereby cutting borrowing costs and cash balances, and minimising interest on negative-yielding currencies. Overdraft limits have also been increased worldwide, improving flexibility. These achievements – and many more – were made possible by the resolute commitment and ‘family-like’ bond of Digital Realty’s treasury team.

Winner

Microsoft  

Over the past several years, Microsoft’s treasury has developed an internal tool called Cash Forecasting & Analytics Reporting (CFAR) that centralises the company’s cash forecasting, balances, and bank account transactional activity. To further improve its use of the tool, treasury teamed up with the company’s internal engineering teams and banking partners to identify and implement solutions to report all cash – whether in demand deposit accounts (DDAs) or in short-term time deposits. The idea was to improve bank account and cash visibility and maximise investment yields for cash held in restricted markets, including China.

Just one example of innovation as part of this project is the work carried out with Bank of China to modify the standard MT940 reporting to incrementally relay each of Microsoft’s time deposits with the bank in a single file. After researching with nearly every large multinational bank in China, the company implemented the first solution to report multiple time deposits into a consolidated SWIFT statement. 

In other key emerging markets such as India, Korea and South Africa, Microsoft partnered closely with Citi to deploy operational funds in more dynamic DDA solutions (where allowed by the regulators) that offered incremental yield benefits with no loss of visibility or liquidity. Treasury now has real-time visibility over 99% of global cash, within seconds, and is no longer reliant on general ledger balances or unique local online banking solutions.

Winner

Toyota Motor Credit Corporation   

Along with macroeconomic and sector headwinds, Toyota moved its North American headquarters from California to Texas in 2018 – in what would become one of the largest corporate relocations in US history. Toyota Motor Credit Corporation (TMCC) had to mitigate the loss of 360 experienced employees, including 50% of the treasury team, who left the company because they chose not to relocate.

In the face of such disruption, it would be tempting to retrench into tried-and-tested funding solutions, but instead TMCC diversified its funding sources. The company expanded and created three funding platforms: its Green Bond platform; the IncomeDriver Notes™ US retail funding programme; and its first debt offering to Italian retail investors. These innovations have broadened TMCC’s global investor base, provided a lower cost of funds to Toyota and Lexus dealers, and delivered greater value to Toyota’s customers.

The judges appreciated TMCC’s ability to develop fresh innovations, even during periods of intense change and disruption since these enabled the company to maintain its competitive advantage. 

Highly Commended 

Bonduelle

Back in 2012, Bonduelle shareholders and top management workshopped a new vision for the company. The result was an ambition to be the world reference in ‘well living’ through vegetable products. With this in mind, Bonduelle launched a progressive initiative of 22 projects called VegeGo! to help reach this goal. One of these projects, called Finance for Growth, looks to embed financial value creation into the DNA of the business. The end goal is to meet a target of 12.5% return on capital employed (ROCE) by 2025 to support the company’s future plans. 

Led by Alexis Wattinne, Group Financing & Treasury Officer at Bonduelle, the Finance for Growth project has identified numerous ways to make the company more efficient – from improved management of inventories to accounts receivable efficiencies, with many incremental wins being realised in 2018. 

Since the cheapest money treasury can find is almost always that which is trapped within the balance sheet, the judges felt that this distinctive project deserved recognition as a Highly Commended initiative in the Corporate Finance & Funding category.

Winner 

Ingram Micro  

With more than USD$150m flowing into Ingram Micro subsidiaries across the world on a daily basis, having centralised visibility and control over that cash – and being able to move it swiftly between different legal entities – is a must. The company therefore partnered with Bank Mendes Gans to set up an innovative global notional cash pool that affords Ingram Micro the flexibility to move funds between entities without intercompany loans. 

As outlined in more detail on page 24 of this issue, the benefits of this overlay set-up range from significant reduction of FX exposures and costs to working capital improvements. What particularly impressed the judges was the fact that Ingram Micro was able to achieve all of these advantages without ruffling the feathers of its existing banking partners.

Winner 

VWFS  

Volkswagen Financial Services (VWFS) was keen to increase internal purchasing efficiency and streamline processes within its Finance Department. The opportunity to onboard more suppliers to its existing purchasing card (P-Card) programme, provided by HSBC, was identified as a way to achieve results quickly.

Running an HSBC ‘supplier enablement’ campaign, led by an experienced team of introducers from Visa, enabled the targeting and on-boarding of additional suppliers – more rapidly and more effectively than could be achieved in-house. With first contact made by the Visa team, VWFS could then easily engage relevant supplier stakeholders with further explanations of the programme and its benefits.

In addition to this collaborative effort, the TMI judges were impressed by the internal education programme VWFS rolled out. Under this scheme, all key stakeholders are made aware of the P-Card strategy and its advantages, not least the ability to reduce costs and minimise unauthorised spending. As a result of these combined efforts, annual card-spend increased 2,000% within 18 months of the launch of the supplier enablement campaign – an undeniably award-winning outcome.

Winner 

IATA  

In partnership with BNP Paribas, the International Air Transport Association (IATA) has conducted one of the first successful SWIFT gpi pilots. Today, IATA’s transactions from seven eurozone countries are being processed using gpi technology. These flows are consolidated at a BNP Paribas account in Amsterdam. And thanks to the use of the unique end-to-end transaction reference (UETR), IATA now has real-time tracking over these flows, providing a complete view of each payment’s lifecycle.

As the trade association of the world’s airlines, IATA operates the industry’s Billing and Settlement Plan (BSP) and Cargo Account Settlement System (CASS). In addition, IATA’s Currency Clearance Service (ICCS) offers global cash management that enables airline treasurers to control and repatriate their worldwide sales funds through a central location in London. Since the vast majority of transactions are cross-border, with smaller volumes of transaction traffic made at a local level, SWIFT gpi is bringing a great deal of value to this service.

This collaborative project has not only moved SWIFT gpi forward but has already made a significant difference to IATA member airlines, enabling them to know precisely where their funds are at each moment. These powerful benefits are why the judges picked this project as the Best Cash Innovation 2018.

Winner

NH Hotel Group  

Spanish-based NH Hotel Group was operating a manual, decentralised treasury structure, which was hampering cash visibility and control. With the support of BNP Paribas, the group embarked on an ambitious project to manage and control the treasury needs of five European countries (France, Belgium, Netherlands, Luxembourg and Italy) – from a single European treasury centre in Madrid. 

The company also worked hard to achieve full automation of all bank transactions via a TMS (Kyriba) and implement SWIFTNet as its main e-banking channel. Furthermore, treasury partnered with BNP Paribas to implement an international cash-pooling solution to centralise its balances.

Completed in February 2018, this impressive transformation has delivered numerous benefits including: enhanced visibility and control over group cash; more than 33% reduction in the number of bank accounts; reduced idle cash balances; reduced funding costs; and maximised funds for investment. This has also led to a significant reduction in operational risk, which was a key deciding factor for the judges.

Winner

Gruppo ITAS Assicurazioni (ITAS)  

In February 2018, Gruppo ITAS Assicurazioni (ITAS) became one of the first insurance companies in Europe to implement a virtual accounts structure for its incoming payments – setting a benchmark in terms of cash management modernisation in the industry.

In the face of rapid growth, ITAS’ treasury department was dealing with increasingly high volumes of incoming payments, often arriving in large batches and this required a new, more scalable and more efficient process for managing inflows. ITAS partnered with UniCredit to roll out a multi-currency virtual account solution, involving the creation of one million virtual IBANs. 

Using virtual accounts resolves the challenge of reconciling high volumes of payments, simplifies accounting structures, and reduces the workload for ITAS’ agencies. At the same time, the solution offers a simpler experience to ITAS’ customers – allowing them to pay insurance premiums directly into the company’s accounts. All of this has set a new standard for cash management in the insurance industry.

Highly Commended 

Kantox  

To enhance Kantox’s client offering and support the fintech’s vision of being a one-stop-shop for companies facing foreign currency challenges, Kantox worked with Citi to build a solution to improve the way companies manage their foreign currency accounts. 

By leveraging Virtual International Bank Account Numbers (vIBANs) using Citi’s Payer ID infrastructure, the fintech’s clients can now easily open and operate local foreign currency accounts – in 29 different currencies – within the Kantox ecosystem. This has resulted in a simplified and cost-efficient way for companies to collect and pay money locally, enabling better management of foreign currency flows. 

The TMI judges praised the solution’s ability to eliminate the high FX fees associated with online PSPs and the fact that same-currency invoice settlement permits Kantox’s clients to significantly enhance their supply chain and negotiate better commercial terms. 

Winner 

Ferguson (formerly known as Wolseley)  

In the past year, the Ferguson treasury team has initiated several projects to introduce or better integrate technology into the department. The ultimate aim was to complete a treasury technology landscape that is effortless to engage with – and future-proofed. The challenge was to streamline and automate the few remaining manual processes while also implementing workflows and technologies that address regulatory and compliance requirements. All these efforts have centered around Ferguson’s TMS, tm5 by BELLIN, which was implemented in September 2015.

These projects covered everything from market data to hedge accounting reporting, GDPR compliance, and regulatory reporting for EMIR (European Market Infrastructure Regulation), which is reported via RegisTR and FBAR (Foreign Bank Account Reporting in the US). A SWIFT connection was also introduced, as was a dashboard for improved internal reporting.

Through these efforts, the Ferguson treasury team has created a future-proofed, effortless and agile treasury that is well-suited to all market requirements and responsive enough to react to any changes in the market. The judges applauded the fact that security was a top priority throughout this future-proofing initiative. 

Winner

Pathfinder International  

As a non-governmental organisation (NGO), Pathfinder International was keen to demonstrate to donors that it operates transparently, with a high proportion of donor funds going directly to recipients. After all, future funding is never guaranteed.

The organisation embarked on an ambitious pilot leveraging Sunlight Payments, a cloud-based digital payments solution that provides NGOs with a secure, private, and fully-traceable service for delivering aid to low- to middle-income countries. This was not a simple ‘plug-and-play’ pilot, however. Pathfinder’s finance team actively contributed to the evolution of the platform, working with Sunlight Payments to create a truly innovative solution. It not only delivers significant business benefits – such as fraud reduction and improved processing of cross-border payments – but also provides visibility, detailed information, and peace of mind to donors and vendors. 

This ground-breaking effort between Pathfinder, Sunlight Payments and Bank of America Merrill Lynch’s Global Transaction Services business (which assists Sunlight in sending funds to end recipients), has demonstrated significant potential - not only in the way that Pathfinder delivers transparency to its donors, but for global philanthropy as a whole. 

The dedication of the Pathfinder team and their willingness to collaborate with a start-up, albeit backed by Bill Gates, deserves special recognition – as they went over and above to help increase the likelihood of repeat donations, and ultimately make the world a better place.