Adam Smith Awards 2014 Best Practice and Innovation

Transcription

1 Adam Smith Awards 2014 Best Practice and Innovation in association with

2 bar raising Congratulations to this years Adam Smith Award winners. Your talents and innovations are the cutting edge of corporate treasury. Proud sponsor of Treasury Today s 2014 Adam Smith Awards. Visit baml.com The power of global connections Bank of America Merrill Lynch is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation ( Investment Banking Affiliates ), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp., both of which are registered broker-dealers and members of SIPC, and, in other jurisdictions, by locally registered entities. Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured May Lose Value Are Not Bank Guaranteed. THE POWER OF GLOBAL CONNECTIONS is a trademark of Bank of America Corporation, registered in the U.S. Patent and Trademark Office Bank of America Corporation

3 Welcome Sponsor s message The role of the corporate treasurer continues to evolve and today encompasses strategic planning and risk management in addition to leveraging opportunities to fuel their organisations growth initiatives. In this environment where managing internal and external change and uncertainty is the new normal, we at Bank of America Merrill Lynch take pride in understanding our clients needs, focusing on solutions that successfully help address the treasurers key challenges and supporting them in achieving more efficient treasury operations. Jennifer Boussuge Head of Global Transaction Services EMEA We are delighted to support the 2014 Treasury Today Adam Smith Awards as they share our ambition to recognise outstanding performance across the treasury industry. The Adam Smith Awards have grown to become a globallyrecognised benchmark for excellence and we are pleased to be working with Treasury Today to recognise and celebrate innovations in the field of corporate treasury. As you read this Yearbook you will see high calibre winning submissions and I am sure you will agree that all the case studies are remarkable and inspiring. The submissions cover innovative solutions that bring real benefits in key areas such as cost efficiency, treasury transformation, and risk mitigation. I would like to congratulate each and every winner on their exceptional achievements. treasurytoday Adam Smith Awards August

4 Audited member of BPA Worldwide treasurytoday.com August 2014 Publisher Angela Berry Executive Assistant to the Publisher Samantha Cowling Associate Publisher Sophie Jackson Editorial Director Eleanor Hill Editorial Tom Alford Chris Davis Chris Josselyn Research and Editorial James Hayward Research Director John Nicholas Senior Relationship Manager Shona Hannah Head of Events Lisa Bigley Head of Circulation Sarah Arter Circulation Manager Megan Coates Head of Production Dawn Ingram Production Assistant Robert Murray Website Manager Luke Scammell Website Assistant Joanna Smith-Burchnell Business Proposition Manager Colin Jones Managing Director Richard Parkinson Switchboard +44 (0) Publisher +44 (0) Subscriptions +44 (0) Advertising +44 (0) Editorial +44 (0) Production +44 (0) Fax +44 (0) Annual Subscription Rate 285 Treasury Today ISSN Treasury Today is published monthly (10 issues) by Treasury Today Limited Courtyard Offices Harnet Street Sandwich CT13 9ES UK The entire content of this publication is protected by copyright. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means mechanical, electronic, photocopying, recording or otherwise, without the prior written consent of the copyright holders. Every effort has been made to ensure the accuracy of the information contained in this publication, Treasury Today Limited cannot accept liability for inaccuracies that may occur. Where opinion is expressed it is that of the authors and does not necessarily coincide with the editorial views of the publisher or Treasury Today. All information in this magazine is verified to the best of the author s and the publisher s ability. However, Treasury Today does not accept responsibility for any loss arising from reliance on it. No statement is to be considered as a recommendation or solicitation to buy or sell securities or other instruments, or to provide investment, tax or legal advice. Readers should be aware that this publication is not intended to replace the need to obtain professional advice in relation to any topic discussed. Printed by: Pensord. Treasury Today USPS: (USPS ) is published monthly except August and December by Treasury Today Limited, Courtyard Offices, Harnet Street, Sandwich, CT13 9ES. A 7magnificent years of achievement Our expectations have been exceeded. A truly amazing array of corporate treasury accomplishment. Well done to you all marks the seventh anniversary of Treasury Today s Adam Smith Awards which are now recognised as the industry benchmark for corporate treasury achievement globally. The programme goes from strength to strength. Each May, our judges convene to undergo the extremely difficult task of examining and shortlisting the many entries and then finalising their decisions. This is difficult. As you might expect, the decisions are not always unanimous. Having said that, this was certainly not the case with this years Top Treasury Team winner the team at Pfizer based in Dublin and New York carried early agreement from all our judges. The Top Treasury Team Award received no fewer than 26 entries. The most popular categories were Best Cash Management, Best Process Re-engineering and Best Working Capital/Financial Supply Chain/Accounts Payable/Accounts Receivables solutions. No doubt a reflection of what has been on the agenda for many of you over the past months. It is also obvious from the submissions that the responsibilities of treasury continues to expand and almost half of all entries were defined as global in their geographic dimension. Most of the benefits of the projects have accrued as impressive cost savings, productivity gains, process efficiencies and risk mitigation; again illustrating where your priorities lie. Our judging panel decided to introduce a new category Middle East Regional Award for Best Practice to recognise the number of entries that we received which address issues specific to this important region. There are some innovative solutions to report in this category. The following pages summarise the winning and highly commended corporates as short case studies and I hope you find them informative and an inspiration. A number of these will be presented in more detail in a series of corporate Adam Smith Webinars later this year and into Details will be announced on treasurytoday.com/webinars All of us at Treasury Today wish to acknowledge your achievements and we applaud each and every one of the many applicants whether you won or not. The 2013 US annual subscription price is $ Airfreight and mailing in the USA by agent named Air Business Ltd, c/o Worldnet Shipping Inc., , 146 th Avenue, 2nd Floor, Jamaica, NY 11434, USA. Periodicals postage paid at Jamaica NY US Postmaster: Send address changes to Treasury Today, Air Business Ltd, c/o Worldnet Shipping Inc., , 146 th Avenue, 2 nd Floor, Jamaica, NY 11434, USA. Subscription records are maintained at Treasury Today Limited, Courtyard Offices, Harnet Street, Sandwich, CT13 9ES. Air Business Ltd is acting as our mailing agent.

5 Winners 2014

6 Adam Smith Awards for Best Practice and Innovation 2014 Award Categories and Winners Congratulations to all the winners of the Treasury Today Adam Smith Awards for Best Practice and Innovation Treasury Today s Top Treasury Team 2014 Open to any corporate team that has made an outstanding contribution to its organisation, this Award recognises those who have made the world of corporate treasury that much better. This could be purely the treasury team or a broader team effort involving different disciplines within a company. Winner: Pfizer 10 Our Top Treasury Team accolade in 2014 goes to the treasury teams at Pfizer based in New York and Dublin. Their submissions cover no less than seven key projects ranging from a supply chain financing programme in Asia to EMIR reporting and an in-house vehicle financing solution. In addition, our judges felt that Pfizer's submission in the Best Risk Management solution category was worthy of a Highly Commended in its own right. The dedication and expertise demonstrated by members of both teams, plus the wider Pfizer organisation, is exceptional, showcasing examples of excellent enterprise-wide teamwork and collaboration. This truly outstanding team effort and the resulting benefits are very impressive indeed. Highly Commended: Roche, Martin Schlageter 14 With operations in over 150 countries, Roche required a solution which provided cost benefits, efficiency standards and ensured the needs of all internal business partners and affiliates were managed. The initial goal was to increase transparency, standardisation and centralisation of financial processes, while also improving compliance needs and reducing costs. The judges thought this was a truly award-winning example of how to implement an in-house bank. Highly Commended: SABMiller plc, Alan Chitty 16 Our judging panel felt the continued march towards being the best treasury team, based on complete straight through processing and treasury technology allowing the team to adopt cutting-edge treasury best practice and becoming a much appreciated value-add partner to the business was worthy of a Highly Commended in the Top Treasury Team category this year. Treasury Today Woman of the Year Introduced in 2013 to leverage the launch of the Women in Treasury initiative, the Award was open to any woman operating in the corporate treasury environment who demonstrated real innovation, achievement and someone who is a real inspiration in her current role. Is she a role model to other women in treasury? Has she overcome real adversity? Has she had a career changing experience? Can she demonstrate real innovation? What has she achieved? Why did she stand out? Winner: Anita Prasad, Microsoft 18 Last year Anita Prasad s Treasury Capital Management team was awarded Treasury Today s Top Treasury Team accolade. This year Anita returns as our much deserved Woman of the Year. Anita was nominated by a member of her team who says, Anita is the epitome of a strong female leader in Microsoft s organisation. She demonstrates leadership with the highest integrity and is a strong promoter of talent for high potential men and women in the organisation. Our judges were unanimous in their decision. Judges Choice Introduced in 2012, this Award celebrates something that is just that little bit different. This could be a solution that is the first of its kind or simply a nomination that showed real star quality, innovation or that little je ne sais quoi. Winner: Etihad Airways, Ricky Thirion 20 This sale and leaseback (SLB) transaction forms part of the larger investment of Etihad Airways in Jet Airways and the broader commercial partnership between Etihad Airways and Jet Airways. This entry was submitted under the Best Financing Solution category; however, our judges felt that because of the most innovative nature, in terms of securing take-off and landing slots at London Heathrow as the underlying security to the transaction, it was a most deserving winner of the Judges Choice this year. Highly Commended: Microsoft, Eric Barka, Michelle Christensen and Jayna Bundy 21 Although this entry was submitted in the Best Risk Management category, our judges felt the project warranted a Highly Commended Award as a Judges Choice given the manner in which the team had gone about addressing Dodd-Frank. 4 treasurytoday Adam Smith Awards August 2014

7 Award Categories and Winners Best Cash Management Solution Any solution which demonstrates how the company manages its cash was eligible in this category, whether a simple single-country/ single-bank solution or a multi-country/multi-bank solution. It might improve cash visibility, show how a hybrid account structure has been implemented, involve complex cash pooling structures or support a full regional treasury centre cash management structure. Winner: Intel Corporation, Regan Nanbara 22 Could you operate a 47-year-old multinational company the size of Intel from one bank account outside of the US? And what would you have to do to get there? A Dutch BV was chosen as Intel s preferred legal entity. Now, rather than four cash pools outside the US holding various balances, a single cash concentration infrastructure has been created, relying on a target-balance account (TBA) structure. Highly Commended: TYROLIT Schleifmittelwerke Swarovski K.G., Franz J. Bramböck 23 This project entails an organically grown and centralised solution which builds upon the company s existing EUR cash pool and SEPAready infrastructure. The combination of the cash pools and the intercompany netting solution reduced intercompany transactions (through their banks) by 90%. Given that TYROLIT is a mid-sized company with a treasury department of only 1.5 full-time employees, the team has been very successful in rolling out this project in only nine months. Highly Commended: Luxottica Group, Marco Bigatti 24 The existence of over 150 legal entities and more than 7,000 stores, including more than 4,000 in the US, created challenges for Luxottica in terms of managing cash flows and collections. The treasury team led the project to reduce the company s number of counterparty banks and developed an international cash concentration system including three zero-balance account (ZBA) structures at a continental level: Europe, North America and Australia, as well as one at the local level for RMB in China. Highly Commended: Dow Corning Corporation, John G. Coon 25 Many treasury departments claim they can view their global cash balances and they utilise one system to manage their treasury activities, but many fall short of delivering on this statement. That is what separates Dow Corning s cash management solution from the others. The group now operates on one system that has been deployed at both its corporate headquarters and its regional treasury offices. This provides visibility to 98%+ of its cash and 100% of its debt with the comfort of knowing where its cash is located, enabling the company to better manage its liquidity. Best Liquidity Management/Short-Term Investing Solution This category captures best-in-class liquidity solutions. The solution can be single-country/single-currency or multi-country/multicurrency. Short-term investing is also included, demonstrating best practice in optimising and/or diversifing short-term investments. How has the trade-off between yield, liquidity and counterparty risk been addressed? Have alternative investment vehicles been explored? Winner: Brembo SPA, Giancarlo Cicuttini 26 Over the past three years, Brembo has undertaken a series of initiatives to move from a decentralised treasury structure to a centralised structure that concentrates most of its cash and liquidity management with a single global bank. It has successfully implemented physical cash pooling structures in the US, a euro cash pool in London (covering Italy, Poland, the Czech Republic, Slovakia, Germany and Spain) and a domestic RMB cash pool in China that went live at the beginning of Highly Commended: Microsoft, Eric Barka, Jayna Bundy and Alex Blackmur 27 The optimal liquidity management and short-term investing vehicle was to implement a euro tri-party repo with Euroclear Bank as agent, with three (bank) trading counterparties. This solution greatly enhanced the Microsoft Capital Markets trading team s ability to manage the large euro closing costs (relating to their major acquisition of Nokia s Devices and Services unit) of over 6.5 billion. This solution highlights the best practices of having the services of a tri-party agent perform and manage the daily repo trade life cycle tasks. Best Working Capital Management/Financial Supply Chain/AP/AR Solution Efficient working capital is a key challenge for companies of all shapes and sizes. Winners may have improved their key performance indicators of DPO, DSO, DIO and/or DWC; introduced new supplier finance projects or electronic invoicing projects; or taken the step from STP to STR, automating the reconciliations process? Winner: Mondelez International Finance AG, Tom Jack 28 Mondelez - needed to bring transformational solutions to its Business Services Centre (EBSC). The primary goal was to release resources within the EBSC to focus on more value-adding tasks for the market organisations and to simplify its banking infrastructure. However, they faced duplications in process, complex bank set-ups using a wide variety of electronic banking (EB) platforms and associated payment formats and security controls. Their One Bank project has delivered some impressive benefits. treasurytoday Adam Smith Awards August

8 Adam Smith Awards for Best Practice and Innovation 2014 Highly Commended: Microsoft, Jose Luis Marti, Spencer Clevenger and David Meunier 29 The Worldwide Online Credit Services (WOCS) team at Microsoft had a problem. With a growing volume of transactions in a business where operating costs are highly correlated with business growth, how could it contain costs while servicing the explosive growth? The problem was further compounded through having to manage a large, geographically dispersed team, which handles dozens of detailed processes and procedures. The solution to the problem was Project Andromeda a complete re-design of WOCS s Cloud credit and collections operations. Highly Commended: NHS Business Services Authority 30 Historically, pharmacies typically received advance payment from the NHS Business Services Authority after 30 days, with the balance being paid on the following month. Under the new scheme, however, pharmacies may be eligible to receive early payment on monthly sums due to them from the NHSBSA as quickly as eight calendar days. This helps them with their cash balances and reduces their borrowing costs. First Class Bank Relationship Management The recent economic turmoil has certainly focused the attention on relationships. The crisis has made corporates look again at bank charges, bank account analysis, managing mandates, the use of digital signatures and projects such as ebam. This category covers all aspects of the corporate/bank relationship and one which really does demonstrate return on investment. Winner: Holcim Ltd, Stefano Bianchi 31 This company drastically changed its banking and funding set-up in Europe in two steps. Firstly, a cross-border zero-balance euro pooling structure was established to replace local pools and local working capital facilities in each country. It also selected a single cash management and funding bank for the Eurozone, where previously it had used 46 banks. The implementation of the overall project was achieved in 12 months and incorporated ten countries and 100 entities within its scope. Highly Commended: Omnicom Financial Services Limited, Gerard McGinnity 32 Not all groups are as decentralised and globally diverse as Omnicom. The company has demonstrated with this project that despite these constraints, it is still possible, with rigorous planning and execution, to manage and direct multiple autonomous entities, implement a centralised solution and avoid the redundancies and non-standard solutions that can result when many entities separately address the same problem. Highly Commended: TE Connectivity, Donald Nash 33 TE Connectivity created an RFP scorecard which identified the key elements sought by the treasury. It employed a cross-functional team involving HR, finance, IT and treasury to evaluate the responses using ratings, weightings and calculated rankings submitted by each team member. Best Card Solution No longer just a piece of plastic, corporate cards have become an integral part of the cash management set-up. The winning solution could cover any aspect of corporate cards from improving the richness of procurement data to minimising the risk of fraud. Winner: WorleyParsons Limited, Simon Holt 34 This programme, which will incorporate over 4,500 cards with over $400 million in cardable spend per annum, is set to cover over 40 countries in Asia Pacific, EMEA, Canada, the United States and South America. The company selected the solution provided by its bank on the basis of the bank s technology platform, global footprint and the ability to get information into the company s Global Reporting and Account Management (GRAM) portal. Highly Commended: Destinations of the World, Keith Fernandez 35 To enhance the experience of its customers, Destinations of the World wanted to improve the functionality of its online booking system. Specifically, the company wanted a secure tool that would enable it to book hotel stays quickly, efficiently and with control and proper reconciliation. The company selected a Virtual Card Account solution. Highly Commended: Yorkshire Water, Carolyn Bywater 36 The introduction of an embedded virtual card number solution across key suppliers enables the Yorkshire Water service centre to reduce costs, improve process efficiencies, remove systems, reduce purchase order and invoice creation whilst still receiving accurate data and transactional information to meet compliance, governance and tax requirements. 6 treasurytoday Adam Smith Awards August 2014

9 Award Categories and Winners Best Financing Solution With sources of credit still squeezed, corporate bonds have made a comeback in recent months. Whether a single transaction or as part of a company s overall debt strategy, this category is open to all types of funding. Winner: Microsoft, George Zinn, Joel Combs and Anita Prasad 37 Microsoft achieved all its objectives, and set several industry records, by issuing a multi-currency and multi-tranche debt of $8 billion. The strategy generated over $175 million of savings in interest expense purely from leveraging the euro-denominated issuance instead of issuing just in USD. Highly Commended: SAP AG, Johannes Weber 38 SAP wanted to refinance its existing revolving credit facility (RCF) in order to reduce bank charges, remove or mitigate risk, and create a leaner bank relationship management process, delivering interest savings among other benefits. To achieve this, the company decided to establish a two-tier system for its banking partners, with differentiated access to additional treasury business. The new facility also reached one of the lowest credit margins for German companies, leading to a significant over-subscription of more than 60%. Highly Commended: Toyota Financial Services, Adam Stam 39 The TFS Green Bond was the first of its kind in the automotive industry and served to enhance Toyota s reputation for leadership of green innovation. Because no other automotive finance company had previously issued a green bond, TFS needed to independently develop a transaction structure and environmental standards for the eligible vehicles to ensure that the deal would appeal both to traditional buyers of Toyota asset-backed securities and green-motivated investors. Best Foreign Exchange Solution This category includes any solution implemented, or in the process of being implemented, which addresses foreign exchange. It could be a single transaction, suite of transactions or a complete change in FX strategy or policy, a hedging programme or use of specific instrument(s) or a new FX requirement as a result of entering a new market or dealing with a new client/supplier. Winner: Wyndham Worldwide Corporation, Mike Cassidy 40 Wyndham has undertaken a treasury transformation programme which includes optimising the company s liquidity management structure, putting in place a netting programme and improving FX risk management practices. The company has seen significant improvements in its FX Scorecard metrics. Highly Commended: TUI Travel Plc, Anna Blasco 41 Hotelbeds is exposed to FX risk between the time of the initial reservation, and when the payment is due, which can be a period of many months, a year, or sometimes even longer. They worked with their bank to design and implement an FX risk management solution which would maintain the margin over the lifecycle of a booking, from reservation to payment; eliminate FX exposures, reducing the month-onmonth P&L volatility; not interfere with the existing payment collection process; and be fully automated, with STP to existing systems. Best Risk Management Solution A category close to every treasurer s heart, the winning solution could relate to any aspect of risk which arises in the corporate treasury arena, from foreign exchange risk to counterparty risk commodity risk, interest rate risk and supply chain risk. Winner: Toyota Financial Services, Vanita Aggarwal 42 This project demonstrates true innovation, achieved by attaining the best from people, processes and technology. To achieve its objective of improving funding options and maintaining regulatory best practice without taking on additional operational risk, TFS was seeking an uncharted territory solution to reliably synchronise complex data across two contrasting environments. Highly Commended: Pfizer, Barry McKernan 43 Pfizer has a cash portfolio of approximately $46 billion, comprising various instruments, ranging from long- and short-term debt securities to investment-grade corporate bonds. With a small team, maintaining surveillance of credit risk in a portfolio of this scale requires innovative techniques and technology. Read about their credit option adjusted spread (COAS) approach. treasurytoday Adam Smith Awards August

10 Adam Smith Awards for Best Practice and Innovation 2014 Best in Class Benchmarking We have seen an increasing use of key performance indicators (KPIs) within the treasury function as well as the growing appetite to benchmark against the industry s best performers and/or best practices. This Award was open to any company who introduced a best in class benchmarking project. Winner: Brocade Communications Systems Inc., Chris Hanson and Yun Kong 44 To support its overall optimisation goal, Brocade established a benchmarking project to identify best professional practices and organisational standards to maximise value for the company. Through its benchmarking project and subsequent technology restructure, Brocade achieved efficiency and productivity gains, reduced manual errors, reduced bank fees, mitigated counterparty risk and optimised the company s bank and account structure. Benchmarking played a key role in developing their holistic solution. Highly Commended: Microsoft, Chase Johnson and Jayna Bundy 45 Since implementing its Trading Metrics Dashboard earlier this year Microsoft has completely done away with slide decks in its quarterly meetings with the treasurer. Outside of this tool it also benchmarks its different systems with other corporates. During the recent regulatory upheaval with EMIR and Dodd-Frank it heavily benchmarked with similar corporates to ensure best practice was being implemented everywhere possible. Highly Commended: Telefonaktiebolaget LM Ericsson, Ragnar Lodén 46 Benchmarking, including its bank s Treasury Diagnostics module, a comprehensive analysis that evaluates treasury practices, has been an important tool in enabling Ericsson to achieve its objectives and realise the benefits of its treasury transformation programme. Following a series of benchmarking exercises, a number of key performance indicators (KPIs) were established. Best Process Re-engineering Solution This category recognises the continuing importance of harnessing the power of technology. Any form of technology deployed within the corporate treasury/finance function which is innovative and/or demonstrates best practice was eligible for this Award. Winner: Itron Inc., Edward R. Barrie 47 This is a truly global multi-faceted project that has focused on delivering an architecture that simplifies, standardises and centralises all treasury processes across 130 countries, whilst ensuring a best-in-class automated straight-through reconciliation model and enhanced liquidity optimisation. Highly Commended: Avis Budget Group, David Calabria 48 The enormous challenges of this initiative re-engineering the company s European treasury function to include an innovative POBO account structure, centralising payables to a SSC and upgrading the treasury workstation were achieved in record time. A six-month end-to-end project to incorporate SEPA go-live for all euro entities by 1 st February 2014, with a fully integrated solution has transformed the region into a fully centralised structure incorporating both the EMEA headquarters and SSC. Highly Commended: Eli Lilly, Giuseppe Rossi-Espagnet 49 Eli Lilly implemented a comprehensive and scalable strategy across 43 countries in EMEA, within a three-year timeframe. The company's effort serves as an excellent success story and best practice for those interested in centralising and optimising general accounting, payment and collection activities in the fragmented and diverse European market. One to Watch This category includes any solution which is in the pipeline, has been implemented as a direct result of macroeconomic events, or perhaps a green solution. It could also be a project which demonstrates innovation and which does not easily fit another category. Winner: Microsoft, Pankaj Gudimella, Jayna Bundy and Jamie Christel 50 The Microsoft treasury team utilises 1,300 bank accounts with 85 banks worldwide and makes over 12,000 treasury wire payments each year, totalling over $240 billion. Their solution, Wire Request Tool (WRT) is built using Internet Explorer, SQL server, Visual Studio and leverages the Windows Azure cloud platform, enabling the quick build, deployment, and management of the WRT application across a global network of Microsoft-managed data centres. 8 treasurytoday Adam Smith Awards August 2014

11 Award Categories and Winners Highly Commended: Severn Trent Water, Stephen Baseby 51 Severn Trent Water is using the Pingit smartphone app allowing it to make and receive payments from its customers. The corporate functionality provides customers with an easy and convenient way to pay their bills, as an alternative to paying by cash, cheque or bank transfer simply by using their mobile phone. Highly Commended: Merz Pharma Group, Karsten Kabas 52 This successful approach shows how to strategically develop a treasury IT infrastructure without handling a dozen or more software systems or partners. It combines continuous innovation and process optimisation and automation while keeping IT complexity low. Middle East Regional Award for Best Practice The judging panel has decided to introduce this new category in order to recognise the number of entries that we are seeing which address issues specific to this important region. Winner: Honeywell, Ciar Timon 53 Implementing a solution in a country like Iraq, which is still relatively politically and economically unstable, has comparatively high transaction costs, and is one of the most complicated countries in the region for routing LCs, is quite an achievement. Hear how Honeywell did it. Highly Commended: Abu Dhabi Health Services Company, Bernhard Solleder 54 The collaboration between this company and its bank in Abu Dhabi has resulted in one of the first custom-designed, automated payment processes in the region, leveraging industry best practices and applying them to address specific local financial requirements. Highly Commended: The Boston Consulting Group, Mark Salehar 55 The solution offered to The Boston Consulting Group in the Middle East has addressed the challenge to integrate daily management of all transactions and accounts, bringing innovation to all three levels of liquidity management. treasurytoday Adam Smith Awards August

12 WINNER Treasury Today s Top Treasury Team Pfizer Pfizer is a multinational pharmaceutical group, headquartered in New York City, with its research headquarters in Groton, Connecticut, United States. It is one of the largest pharmaceutical companies in the world, by revenues. Treasury Today s Top Treasury Team accolade for 2014 goes to Pfizer s treasury teams based in New York and Dublin. Their submissions cover no less than seven key projects ranging from a supply chain financing programme in Asia to EMIR reporting and an in-house vehicle financing solution. In addition, our judges felt their submission in the Best Risk Management solution category was worthy of a Highly Commended Award in its own right (see page 43). Jennifer Boussuge, Bank of America Merrill Lynch with Amit Singh, Margaret McDonnell, Jennifer Cleary and Barry McKernan from Pfizer The dedication and expertise demonstrated by members of both teams, plus the wider Pfizer organisation, is exceptional, showcasing examples of really excellent enterprise-wide teamwork and collaboration. The resulting benefits are very impressive indeed. The New York team members recognised are Renje Kuo, Ping Chen, Freddie Koh and Carol Carino, led by Amit Singh, VP and Assistant Treasurer, for their Regional Supply Chain Finance programme in Asia Pacific. Neil Desai, Portfolio Manager, led a team comprising Amit Singh, Mark Hopkins, Aengus Quinn, Brian Farrelly and Margaret McDonnell to develop an outstanding short-term investment solution. Alex Zimmerman, Senior Manager, North America Treasury, plus his colleagues Fiona O'Leary, Raj Ramapatna, Paul Whelan, as well as the operational business finance lead Gordon Loh, built a new Global Cash Management solution. Mark Hopkins, Director, Amit Singh and Neil Desai implemented an innovative FX solution. And in Dublin, Jennifer Cleary, Compliance Manager, with key inputs from other groups within treasury, IT, front office and treasury operations, as well as the Pfizer legal team in Ireland, provided a cost-effective solution to EMIR reporting. Susan Webb, Managing Director, led a team comprising Amit Singh, Ian O'Callaghan, Fiona O'Leary and Ivor Johnson, Szabi Kapusi and Fred Turco from the Fleet Team, to create an innovative Financing solution. Finally, Process Re-engineering, was initially conceived and led by Margaret McDonnell, Treasury Operations Manager in the Dublin Treasury Centre, and supported by the Corporate Treasury group. Once the idea was presented to the GFS Europe Treasury Team, where the cash forecasting process sits, Fiona Caheny, Sinead Keogh, and Vikram Talwar carried out all testing and development. Talwar, with support from Treasury SMEs (Mark Cunningham and Julia Donegan) and his manager Shane O Reilly, is currently working on completing while continuing to collaborate with McDonnell in the DTC. The challenges and goals: Turning to each project in turn: Supply Chain Finance: Improve working capital (increase DPO) without financially disrupting Pfizer s supply chain. Ensure no re-classification from accounts payable to debt. If this were to happen it would defeat the purpose of the programme and also add to Pfizer s reported leverage. 10 treasurytoday Adam Smith Awards August 2014

13 WINNER Treasury Today s Top Treasury Team Minimise the impact on existing regional financial shared services AP workflow and business technology footprint. Liquidity Management/Short-Term Investing: Preservation of capital ensuring that investments are of high credit quality. Liquidity develop the ability to efficiently sell assets in order to raise cash at short notice. Yield enhance returns on cash. Global Cash Management: Institute one methodology to view bank balances globally on a daily basis. Standardise reporting, centralise data and implement a bank-agnostic reporting tool. Minimise the impact on local market finance colleagues. Leverage current technology footprint and control costs. Foreign Exchange: Design a cash flow hedging programme to alleviate swings in Pfizer s financials due to foreign exchange movements in key currencies: JPY, EUR, GBP, CAD and AUD. EMIR: This was not a typical innovative solution designed to optimise or enhance current processes. Rather it was the solution put in place to respond to a regulatory reform enacted during 2012 involving a series of milestones to be delivered over future months. Financing: Utilise Pfizer s cash to eliminate the third-party finance cost of leasing. Process Re-engineering: Address a series of long-standing, highly manual processes associated with Pfizer's substantial daily cash movements. The solutions: In April 2014, Pfizer introduced to its vendors a Singapore-based supply chain finance programme with J.P. Morgan. This programme offers a rare win-win solution for both parties. The Singapore pilot, once successful in engaging vendors in Asia, will be extended to Pfizer's vendors across the rest of the world. Pfizer s treasury recently launched a solution to enhance yields on its short-term cash investments while maintaining the portfolio s highquality risk profile. The solution involved exploring two alternative investment strategies, both of which were managed in-house: Basis swap strategy. Structured products strategy. Pfizer operates in many markets around the world, with over 500 bank accounts across more than 75 counterparty banks. Roughly 95% of Pfizer s balance sheet cash is visible daily to the corporate treasury. The remaining 5% of cash is either regionally or locally managed. Given this geographic disparity, Pfizer s treasury was tasked to build a global bank balance reporting infrastructure that is scalable while leveraging in-house technology. The benefits would shift the regional and decentralised oversight of cash to one global report, strengthen counterparty bank risk management, reduce manual intervention, and provide timely information and decision support for global cash management. SWIFTnet technology was selected as the global standardised interface with banks while utilising SunGard s AvantGard Quantum to retain and report on the information. Pfizer s FX solution hedges currency exposures by using foreign exchange forward contracts of up to 24 months in tenor. In addition, Chart 1: SCF programme structure A supply chain finance programme helps reduce the overall cost to the supply chain by providing a cost-efficient financing option to suppliers 1. Commercial contracts Pfizer (buyer) 2. Ship goods and send invoices Suppliers (seller) 3. Accepts invoices and delivers to banking partner 4a. Under ato discount, bank discounts all approved invoices and credits suppliers net of discount interest 5. Delivers electronic Notice of Assignment to Pfizer 6. Pfizer settles the invoice amounts on maturity date Banking Partner 4b. Under manual-discount, bank (i) notifies suppliers the discount proposal via , and (ii) upon suppliers accepting the discount proposal, credits suppliers net of discount interest Source: Pfizer treasurytoday Adam Smith Awards August

14 WINNER Treasury Today s Top Treasury Team these exposures are layered over this period, achieving a smoother exchange rate and thus reducing overall volatility in Pfizer s income statement. The programme went live with JPY hedges in April Following this it will add the other four currencies as it tweaks and improves its monthly processes. Pfizer partnered with 16 bank counterparties for EMIR reporting which provided a cost-effective solution. These partnerships allowed Pfizer to avail of their systems, expertise and experience whilst ensuring EMIR compliance for third-party trade reporting at zero cost. The aim of the financing project was to establish an internal fleet-leasing hub to finance Pfizer s purchase of vehicles and unwind the existing close-end lease arrangements currently in place. Pfizer is cash-rich with a significant investment portfolio. Earning a reasonable return on this portfolio in the current low-interest rate environment is challenging. Pfizer has a large field sales force and operates a car fleet of 27,000+ globally, with approximately 13,000 vehicles in Europe. The majority of these vehicles in Europe are operated under a closed-end lease model whereby Pfizer pays a monthly amount to a third-party leasing company for all services relating to the vehicle. Interest paid to third parties in EMEA under this model is in excess of $10m per annum. The solution is a leasing hub which uses Pfizer s own cash to finance its own car fleet, eliminating interest costs and unlocking the closed-end model. The project included a number of pilot markets (the UK, France, Spain and Italy) but could ultimately be extended to the rest of Europe and the US. Pfizer has implemented a zero-balancing cash pool arrangement across Europe, whereby it invests the cash swept to its header account in London on a daily basis. The amounts are significant, and can vary between (equivalent) $20m and $150m daily. Pfizer s primary financial shared services centre for Europe, known as Global Financial Solutions-Europe (GFSE), supports 16 European markets, and the GFSE treasury team is responsible for collating a daily forecast on their behalf for approximately 65 European entities, in up to 26 currencies. This involved a labour-intensive, manual process, which took four hours daily and achieved only 60% accuracy. Pfizer wanted a smarter solution, which would achieve more accuracy while saving resources. The company leveraged technology which was already available to it, and found that using intraday bank statements as its source of information achieved this and added-value. This process re-engineering solution replaces the manual import of expected payables and receivables from its ERP systems, with an automated import of actual payments and receipts from its intraday bank statements. This will be done through the import of account balances at a point of the day when over 98% of all payments and receipts have been applied. Chart 2: Technology systems schematic Bank Bank SWIFT Service Bureau Quantum Scheduled processes Reports Users File server Source: Pfizer 12 treasurytoday Adam Smith Awards August 2014

15 WINNER Treasury Today s Top Treasury Team Pfizer is an exception to the rule. These initiatives are cross-functional efforts spanning multiple business functions spread across the globe and time zones. Navigating through everyone s timelines and agenda must have been hugely challenging but the end results make it all worthwhile. Our judging panel was immensely impressed with the projects undertaken and the Pfizer teams in Dublin and New York can be rightly proud of what they have achieved. Congratulations from the team here at Treasury Today. Richard Parkinson, Managing Director, Treasury Today Key Benefits: Forecast accuracy increased to 95% with daily saving of at least two hours. Days payable outstanding increased from average of days to days. Increased daily transparency on over $1 billion (equivalent) by counterparty bank and currency exposure. Reduction in resource time spent on manually collecting data. Transitioned to a globally accepted business standard. Bank fees centrally invoiced to New York headquarters; buy-in from local markets. Short-term investment strategies employed achieve between 0.25% and 1.25% of incremental return above US government securities. Exposure to spot rate volatility is projected to decrease by over 30% and net earnings exposure to the currencies in the programme will be reduced by over 50%. Over a ten-year period the financing hub initiative will result in interest savings of approximately $25m and other operating benefits of approximately $15m. treasurytoday Adam Smith Awards August

16 HIGHLY COMMENDED Treasury Today s Top Treasury Team Roche Hansjörg Suhner, Evelyne Thommen and Benno Zentriegen, Roche Headquartered in Switzerland, Roche is a leader in research-focused healthcare with combined strengths in pharmaceuticals and diagnostics. The company employs more than 85,000 worldwide and in 2013 posted sales of CHF46.8 billion. With operations in over 150 countries, Roche desired a centralised treasury set-up which provided cost benefits, efficiency standards and ensured the needs of all internal business partners and affiliates were managed. The initial goal was to increase transparency, standardisation and centralisation of transactional processes, while also improving compliance needs and reducing costs. The solution had to be truly global and flexible to incorporate regional differences as well as changes in the regulatory environment. We decided to establish an in-house bank (IHB) and initially concentrated on five key areas: bank relationships, cash pooling, intercompany FX hedging, intercompany settlement tools and harmonising our banking interfaces, explains Martin Schlageter, Head of Treasury Operations. Roche streamlined and implemented these areas between 2004 and 2007, during which time the IHB joined SWIFT for all its treasury payments. A payment factory was then implemented for all subsidiaries around the world, offering the payment-on-behalf-of (POBO) model wherever possible. Additional features have since been developed via SWIFT such as supplier financing, compliance filtering, payroll factory and automated matching and confirmation of treasury transactions (money market, FX and securities). Concurrently, we were also focusing on the vision to completely replace Roche s affiliates external banks, says Schlageter. Today the IHB serves more than 200 affiliates around the world from Switzerland. It now provides cash pooling in 45 currencies, hedging of FX-exposures through intercompany FX transactions, enables bankfree intercompany payment services as well as on behalf of third-party payments and collections. Since 2008, it has centralised all incoming and outgoing interfacing messages with banks via its own SWIFT. Now in its tenth year, the IHB has reached a significant milestone: several affiliates were able to close all their third-party bank accounts and rely exclusively upon the IHB for all their banking services (100% IHB). In order to make 100% IHB possible, the team enhanced its service offering using an electronic banking tool (eihb) that allows file uploads from non-erp systems and manual payments (eg taxes and salaries), explains Schlageter. Our judging panel felt the Roche team deserved Highly Commended in the Top Treasury Team category as real innovators in the in-house banking space. The close collaboration between the treasury operations team and its IT support group has delivered the strategy in a company the size of Roche. The IHB is exceptional in its comprehensive bank service offerings that now allow affiliates to bank without an external bank account. In its annual survey, Roche s affiliates rated the services of the IHB an average 9/10. We believe this is a truly awardwinning example of how to implement an IHB. Richard Parkinson, Managing Director, Treasury Today 14 treasurytoday Adam Smith Awards August 2014

17 HIGHLY COMMENDED Treasury Today s Top Treasury Team An innovative global platform for all treasury functions Cash pooling, central bank statements, intercompany payments, Intercompany FX In-house bank Cash managenment Liquidity management of global cash pool, bank account management 300 users globally 240 companies 40 currencies 1000 positions 400 bank statements daily one system one set of processes Central payments and collection engine, direct SWIFT access Payment factory Trading and back office Central FX management, internet trading platforms, portfolio management, financing and back office Accounting and risk management Integrated accounting, fully automated valuation, central value at risk calculation The ultimate roadmap was to structure the IHB as a service provider to the affiliates: the IHB will perform all the services that an external bank would normally offer. With the pioneering status of 100% IHB the team can serve all its affiliates around the world from very restrictive countries, like Pakistan, to (now) bank-free countries, like Finland. In addition to rendering state-of-the-art services to all affiliates around the globe, the IHB Team centrally handles and controls all Roche bank accounts, EMIR and Dodd-Frank reporting, and maintains the infrastructure for internal FX exposure, credit risk and portfolio performance reporting. In the area of core treasury activities, nearly all third-party treasury transactions from deal entry (via online platforms FXAll or 360T) to settlement and confirmations to payment to counterparties are automated. Roche has piloted SAP s Correspondence Monitor for handling and matching of SWIFT corporate confirmations for FX, money market, and securities. The team currently manages approximately 3,000 treasury transactions and with an automation rate of 98% 20,000 IHB transactions a month. Being a centre of excellence and serving as a role model of centralisation within our group, the team is invited to all Roche transactional projects and is perceived as an innovative, reliable business and project partner offering state-of-the-art solutions, says Schlageter. In December 2013 Roche received as one of just two corporates the approval for RMB cross-border cash pooling and intercompany netting in China which went live in early June The two teams managing the IHB comprise 21 dedicated people; with Martin Schlageter, Head of Treasury Operations since 2004, and Alexandra Greiner, Head of Treasury IT since Together, they formed a dynamic team with a balanced gender mix, representing more than ten nationalities and ages ranging from 20 to 60, coming from a wide array of business, affiliate and IT backgrounds. Besides the people, the guiding force behind the development of the IHB has been the existence of a visionary, long-standing, and finely-tuned roadmap that has remained remarkably consistent since it was first conceived in What is particularly noteworthy is the IHB allows Roche to run its comprehensive, global services centralised out of its Basel headquarters with no regional treasury centres required. Another important aspect of its success is the close association between treasury and IT. With this the IHB processes have reached a high level of standardisation and automation which not only grants transparency to group treasury but is absolutely key to continuous innovation. Key Benefits: Satisfies evolving regulatory requirements, for example, Dodd-Frank and EMIR. Recognised quality accreditation. Risk removed or mitigated. Foreign exchange gains. Process efficiencies. Productivity gains. Time taken to implement solution and realise benefits. Cost savings. Reduction in bank charges. Fostered a diversified, innovative team with great team spirit. treasurytoday Adam Smith Awards August

18 HIGHLY COMMENDED Treasury Today s Top Treasury Team SABMiller plc Alan Chitty and Guy Ingram of SABMiller SABMiller is one of the world's leading brewers with more than 200 beer brands and some 70,000 employees in over 75 countries. It also has growing businesses in soft drinks and is one of the world's largest bottlers of Coca-Cola products. The challenge was to bring about best practice in risk management, treasury operations, treasury accounting and treasury controls within SABMiller globally. It then had to standardise wherever possible across the European environment and emerging markets. In many cases we were not only training the business unit but often the in-country banks (local subsidiaries of some of the major global banks) on what was possible and what was absolutely required, explains Alan Chitty, Treasury Controller. Ensuring localisations were kept to a minimum required an analysis of central bank regulations, examples of what other banks within that country were doing, examples of what the same bank was doing in other markets and occasional pressure to be placed on the global relationship manager. Two requests for proposal (RFPs) were developed and three regional treasury centres (RTCs) established, while country treasury operations were centralised. On the debt side the company issued a $1.1 billion bond issue with a five-year maturity split between two tranches, a $750 million fixed and a $350 million floating rate tranche. SABMiller were very happy that they were able to price through their curve by 3bps on the fixed rate tranche. Other components of the solution implemented include: Hedge accounting for commodities this was automated within IT2. Additional IFRS7 and IFRS13 disclosures agreed with PwC well before year-end. ebam went live with Citi. Negotiating the first use of 360T in South Africa with two banks. Two treasury management system (IT2) upgrades over twelve months. CP issuance and tri-party repos to spread the counterparty risk out of financial institutions. Changed confirmation system to Misys, including roll-out in the Africa region (first corporate in Africa). Connectivity Deals (RFQ) in CSV format Deals executed in CSV format Online dealing Quotes from banks Consolidation JO EDWARDS G/L Posting MT101 MT300 and MT320 Banks Hyperion Consolidation ERPs [Triumph chart of accounts] G/L Posting Automated FX Rates Interest Rates MT101 ACK/NAK MT900 MT910 MT940 MT300 and MT320 Service Bureau MT900 MT910 MT940 MT300 and MT320 Matched Mismatched Unmatched MT300 MT320 SWIFTNet SWIFT ACCORD MT300 MT320 Banks Matched Mismatched Unmatched Matching processes 16 treasurytoday Adam Smith Awards August 2014

19 HIGHLY COMMENDED Treasury Today s Top Treasury Team Automated non-deliverable forward, commodity and option confirmations through Misys. Implemented dynamic hedge programme using Citi Early Warning System. Implementation of corporate SWIFT payments and confirmations in ten new countries seven of which were among the first in that country. Supply chain financing over three continents with RBS, Citi and Westpac. Fully compliant on EMIR trade reporting, back loading of deals dating back 18 months and quarterly portfolio reconciliation with an in-house automated solution from the TMS that allows reporting of internal derivatives and can be adapted to meet other G20 regulatory requirements. This has been a real team effort across four continents and four different locations improving efficiencies and implementing best practices in everything from bond issuance, RFPs and bank relationships to dealing automation, payments, confirmations, hedge accounting and automated accounting interfacing to multiple ERPs. The project has fostered the continued centralisation of treasury operations (front office, middle office and back office) into centres of excellence regional treasury centres leading to more efficient, more cost-effective and higher quality treasury operations. This has delivered large benefits in terms of interest, FX and bank fee savings within the business units due to regional fee structures. At the same time the group treasury, based in the UK, has become more sophisticated and complex in its risk management and cash management based on the foundation of increasing straight through processing. This has also allowed the scope and volume of treasury to increase dramatically whilst not increasing the headcount or departmental budget, explains Chitty. Our judging panel felt the continued march towards being the best treasury team, based on complete straight through processing and treasury technology allowing the team to adopt cutting edge treasury best practice and becoming a much appreciated value-add partner to the business was worthy of a Highly Commended in the Top Treasury Team category this year. This has allowed the whole SABMiller Group Treasury team to achieve a phenomenal amount of change, scope increase and efficiency gains over the last 12 months, says Richard Parkinson, Managing Director, Treasury Today. MaxTrad portal invoice processing 1. Daily, SABMiller uploads approved invoices file to Maxtrad portal RBS receives suppliers purchase request On the invoice due date SABMiller pay all invoices (discounted and not discounted) to suppliers via RBS. 2 Supplier 2. Suppliers are notified by of invoices offered for discount. Suppliers log on into Maxtrad and select invoices for RBS to purchase. Suplliers can also use auto-discount mode without need for logging on. 4. RBS pays the selected invoices to suppliers with cleared funds in suppliers accounts typically next day. 4 Reduced reliance on bank credit lines. Reduction in bank charges. Cost savings. Time taken to implement solution and realise benefits. Productivity gains. Process efficiencies. Improvements in days payable outstanding (DPO). Interest savings. CP rating. Pricing enhancements. Reduction in foreign exchange spreads. Risk removed or mitigated. Recognised quality accreditation. Satisfies evolving regulatory requirements, for example, Dodd-Frank and EMIR. treasurytoday Adam Smith Awards August

20 WINNER Treasury Today Woman of the Year Microsoft Anita Prasad General Manager, Treasury Capital Management Last year Anita Prasad s Treasury Capital Management team was awarded Treasury Today s Top Treasury Team accolade. This year Anita returns as our deserved Woman of the Year. Anita was nominated by a member of her team who says, Anita is the epitome of a strong female leader in Microsoft s organisation. She demonstrates leadership with the highest integrity and is a strong promoter of talent for high-potential men and women in the organisation. In her role at Microsoft Anita is responsible for corporate finance, capital structure, share buybacks and dividend policy, structured investments, global cash and liquidity, treasury operations, and credit services for Microsoft s online businesses. She manages a team of over 200 full-time and vendor employees within Microsoft s treasury and drives the long-term strategy of the department, which is focused on leading innovation. Technology plays a large role in this for Anita, who is always thinking about how it can make tasks better, easier, more cost-effective and streamlined. For example, she uses a WRT app designed for Windows smartphone to approve wire payments every working day. She also refers back to a treasury analytics app on her tablet at regular points during the day, just to check on how operations are running. In 2014 alone, her team has delivered cutting-edge business intelligence solutions, proactive risk management by getting in front of Dodd-Frank and EMIR, successful EUR and USD bond issuance deals, and continuous process improvement through automation. Anita s success is partly down to the high-level view she adopts when tackling treasury challenges. Since joining Microsoft in 2005, Anita has taken a strategic and holistic approach across the company and has led her team through a number of firsts including: Obtaining their first corporate rating in 2008, achieving Triple-A ratings. Microsoft was one of only five companies at the time to achieve this. Anita Prasad I have had the pleasure of working with Anita for the past decade. We worked together on elements that technically were not part of her responsibilities but that didn t stop Anita leaning in and making sure we took care of messaging appropriately to investors and on our earnings calls. Six years ago, I took a role as a sales leader and we work as closely as ever. Unexpected, isn t it, that treasury would work with sales. But this is the sort of leader and team player she is. She is the type of peer and partner that we all hope to get to work with in our careers. Colleen Healy, Microsoft Establishing its first commercial paper program. Offering the company s first EUR and USD bond offering. Establishing its first revolving credit facility. In addition, since the debut bond offering, she has overseen more than $25 billion (USD equivalent) in capital raises, each thoughtfully timed with the ability to realise very successful results. Furthermore, all these milestones were achieved while Anita also managed Microsoft s global liquidity, capital structure, treasury operations and a $40 billion share repurchase program. 18 treasurytoday Adam Smith Awards August 2014

21 WINNER Treasury Today Woman of the Year Some of the projects Anita is currently working on include a supply chain management programme, enhancing business intelligence capability for dynamic decision support, driving efficiency in capital projects, and leveraging big data to help understand patterns and forecasting. An industry peer of Anita s has said that, She tackles every project with passion, excitement and a commitment to delivering the most successful solution for the company. She is a trailblazer who looks to break down barriers that can sometimes exist in large institutions that can slow down their development, and is well respected by her peers and partners given her expansive knowledge base, innovativeness, experience and approach. Before entering corporate life, Anita was an Assistant Professor at the University of Wisconsin, Milwaukee. She holds a Bachelor s and Master s degree in Economics, an MBA in Management Information Systems (MIS), and a PhD in Finance and International Business. After leaving academia Anita became the Treasury Manager, Capital Markets at Lam Research before moving to become the Vice President, Treasury and Tax, at LSI Logic Corporation. In this role Anita provided leadership in designing effective balance sheet structuring, manufacturing strategy and pricing policy, stock buyback programs, currency and interest rate risk management, M&A, domestic and off-shore portfolio management, venture portfolio, and international tax structuring. Anita describes her core values as follows: Honesty, integrity and truth in what I do, how I do it and how I conduct myself. Having passion for the role - I truly believe that passion for what you do is critical; if you don t enjoy what you do and don t feel a connection and passion then no matter how hard you work, you can t make a difference and have a lasting impact. The importance of mentoring - I am indebted to various mentors in my personal and professional life and I feel that the best way to thank them is to mentor and help others around me. Leadership by being a coach in the truest sense of the word. Bringing the best out of individuals - I believe that a building and leading high-performance teams is like creating a mosaic with diverse and complementary skills and then bringing out the best in each while working towards a common goal. Enjoying new challenges - I am more of big-picture strategic thinker who loves new challenges. On a more personal front, Anita was born in India, spent the early part of her life in India and Abu Dhabi before moving to the US, where she has lived in the south, north-east, mid-west, and now the west coast. However, London is her favourite city in the world. She is the Treasurer of the Board of Trustees of the independent school that her sons attend. She loves the giving spirit that all Microsoft employees reflect, starting with their founder Bill Gates, and she strives to do her part by supporting wildlife preservation, education for the less fortunate, and the Shankara Eye foundation, which provides the gift of sight to those who can t afford medical care. The value of education and hard work was instilled from an early age by her parents and Anita now approaches life with the motto Dream big and set goals high. It is her view that anything can be achieved if one sets their mind to it, so even if only 60% of a high goal is achieved, this is greater than achieving 100% of a lesser goal. When Anita was informed of our judges decision she responded as follows: I am truly humbled and honoured that someone from my team would recommend me for this recognition. Whoever is responsible did not consult with me; I am sure he or she knows that I would have talked them out of this submission. Honestly, when I look around me and see what several of my female colleagues have achieved across treasury and finance at various corporates it inspires me to be a better person, professional and leader. I have been truly fortunate to work with a leader like George Zinn, CVP and Treasurer at Microsoft, who is a great role model and coach; he gives me the freedom to be creative and drive impactful business results, she adds. treasurytoday Adam Smith Awards August

22 WINNER Judges Choice Etihad Airways Ricky Thirion, Group Treasurer Richard Parkinson and Ricky Thirion, Etihad Airways Etihad Airways began operations in 2003, and in 2013 carried 11.5 million passengers. From its Abu Dhabi base Etihad Airways flies to 103 existing or announced passenger and cargo destinations in the Middle East, Africa, Europe, Asia, Australia and the Americas. The airline has a fleet of 99 Airbus and Boeing aircraft and more than 220 aircraft on firm order. Etihad Airways was looking to purchase a 24% equity stake in India s largest airline, Jet Airways. As part of this larger equity investment and commercial partnership Etihad wished to provide funding for its new partner, which became its challenge. The investment was to be broken up between equity and debt so the team therefore had to develop a structure which would provide acceptable security to Etihad Airways. It was also faced with the challenge of structuring a deal which would be acceptable under both international and Indian regulations a first. To overcome this challenge, Etihad established a sale and leaseback transaction which provided $70 million worth of asset-backed funding to Jet Airways. This unlocked liquidity from an unusual asset on the Jet Airways balance sheet, namely three pairs of take-off and landing slots at London Heathrow airport, which were owned and operated by Jet Airways. For Etihad, the slots were the clearest items of security on the Jet Airways balance sheet, which Etihad could use should it take ownership of the company. Jet Airways would continue to operate flights from these slots, which now belong to Etihad. Key terms and participants in the transaction were: Lender/lessor: Etihad Airways Borrower/lessee: Jet Airways Amount: $70m Term: five years Asset: three pairs of take-off and landing slots at Heathrow airport Lenders Legal Counsel: DLA Piper We had previously spent a lot of time developing the structure of the deal for another investment which wasn t realised. This provided a dress rehearsal and we were confident it would work. Therefore, when the Jet investment began to happen, it was clear that this solution should be taken off the shelf and used, says Ricky Thirion, Group Treasurer. Due to the nature and geography of the deal the Etihad team overcame some complexity and obstacles faced in executing this transaction, which included: Perfecting the security under both English and Indian law, using both English and Indian powers of attorney. This was to ensure the slots would be transferred back to Etihad in the event of a default. Obtaining approval from the Reserve Bank of India which was required on a unique asset-type and transaction structure such as this. Overcoming the challenge of being of being the first to attempt this in the country, as India had only recently opened its aviation industry up to foreign investment. Etihad and its legal team therefore had to navigate through the new market and learn as it went along. The transaction creates an asset-backed lending solution between two corporate entities who are also commercial partners and provides innovative security to the lender in a structure that has not been executed before for this type of asset. No bank or other third-party debt was sourced into the transaction. The transaction also leveraged the unique position of the airline as a lender to unlock the value in the assets which would not be valuable security to traditional lenders. The use of London Heathrow take-off and landing slots as an underlying security to support a lending transaction between two airline partners was a unique solution and no precedent transactions of this nature existed. Also, despite the unique nature of the deal, it was completed in a short time frame of just three months. The structure provides Etihad with security and sufficient control over the security in the event of a default. The security is also a very useful asset to Etihad Airways in the unforeseen event that it ultimately needs to enforce, explains Thirion. This entry was submitted under the Best Financing Solution category. However, our judges felt that because of the most innovative nature, in terms of securing take-off and landing slots at LHR as the underlying security to the transaction, it was a most deserving winner of the Judges Choice in this year s awards. Perhaps this will create a precedent for deals of a similar nature in future. Successfully funded Jet Airways. Risks removed or mitigated due to the unique ability of the airline as a lender to access this form of security. Reduced reliance on bank credit lines. Created a structure which can be replicated. Completed in a short time frame. 20 treasurytoday Adam Smith Awards August 2014

23 HIGHLY COMMENDED Judges Choice Microsoft Jayna Bundy, Group Treasury Manager, Treasury Capital Management Eric T. Barka, Treasury Manager Michelle Christensen, Capital Markets Team Jayna Bundy, Erik Barka and Michelle Christensen, Microsoft Founded in 1975, Microsoft is the worldwide leader in software, services and solutions that help people and businesses realise their full potential. The Dodd-Frank Act, specifically Title VII, placed an incredible resource burden on the industry, including swap dealers, major swap participants and non-financial end-users such as Microsoft. The endless drafting of legislation and the final rule-makings by the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) complicated the matter further. Microsoft also had the significant challenge of determining whether it should evoke the end-user exemption and determining clearing thresholds for the company s non-financial enduser classification. In addition, the exercise of performing benchmarking and due diligence in the OTC futures commission merchant (FCM) selection process was very exhausting and time-consuming. The legal review took approximately one and a half years. The real problems, issues and challenges for Microsoft were in the interpretation of the complex CFTC SEC rules and regulations as they evolved, which took years. For Microsoft the goal was to be at the forefront of Dodd-Frank as legislation and regulations were finalised and to be able to successfully clear the first wave of derivatives products. We are now also set-up for the mandatory swap execution facility (SEF), electronic trading platform and are ready for the next in-scope products down the pipeline, which are expected to include FX non-deliverable forwards (NDFs) and single-name credit default swaps (CDS), explains Eric Barka, Treasury Manager. Now we look onward for new clearing requirements around FX NDFs and Single Name CDS, explains Michelle Christensen. When Microsoft s treasury decided at the end of 2010 to conduct a survey to benchmark our readiness and preparations for Dodd-Frank OTC clearing, we found an interesting fact in that not many other corporates were taking a proactive stance for getting central clearing in place to meet the looming deadlines. Most corporates we spoke with choose the wait and see approach and availed themselves of the DF exemption that use derivatives to hedge commercial risk, explains Jayna Bundy, Group Treasury Manager, Treasury Capital Management. Microsoft was one of a relatively small handful of corporates that decided to put an OTC clearing model solution in place to be prepared to voluntarily clear. The outcome followed more than two years of intense planning, preparation, and implementations that started the moment the Dodd-Frank Act was passed in 2010, with the objectives to implement a fully STP clearing model. Microsoft executed its first OTC cleared trade on 9 th September Although this entry was submitted in the Best Risk Management category, our judges felt the project warranted a Highly Commended as a Judges Choice given the manner in which the team had gone about addressing Dodd-Frank. Starting in 2010, Microsoft was proactive in interpreting the complex CFTC SEC rules, regulations, final rulings and successfully implemented an OTC central clearing model solution that was leading-edge for corporates. To do so, the Microsoft treasury team started by selecting their OTC FCM clearing agent, MLPFS and middleware provider, Markit. It also implemented the Blackrock Aladdin platform and put an OTC collateral management solution in place with its agent, Northern Trust. This comprehensive work ensured that Microsoft s treasury was able to trade on day one to meet the mandatory OTC central clearing requirements on 9 th September This covered the first wave of clearable credit and rate products, CDX investment-grade, high-yield and vanilla interest rates. This risk management solution and innovation began early with the intent to voluntarily clear to manage counterparty exposure risk, receive best trade executions over non-cleared swaps with higher margin requirements, and proactively get behind the lengthy legal reviews of the FCM OTC Clearing Addendum, Futures Agreements and Cleared Derivative Execution agreements. OTC FCM selection. FCM legal work. Cleared derivatives execution agreements (CDEAs). Successful on-boarding. OTC collateral management. Bloomberg SEF (BSEF). treasurytoday Adam Smith Awards August

24 WINNER Best Cash Management Solution Intel Corporation Regan Nanbara, Director, Cash Management Shridhar Srinivasan, Intel Corporation and Julian Giliberti, Citi Intel Corporation is a multinational manufacturer of semiconductor chips, headquartered in Santa Clara, California. It is among the largest and highest-valued chip makers in the world, based on revenues. Could you operate a 47-year-old multinational company the size of Intel from one bank account outside of the US? And what would you have to do to get there? That was the challenge Regan Nanbara, Director, Cash Management, set his team and his banking partners. But it was a tall order. In order to realise his vision, Nanbara established several goals to address the problems Intel was experiencing in managing its cash. The company s short-term goals were to find a jurisdiction and offshore holding company that would allow it to manage both short- and long-term cash in one place; establish a single cash pool in that jurisdiction, eliminating the need for regional cash pools; and evaluate intercompany loan balances to facilitate cashless settlement through netting intercompany payables and receivables. Its longer-term goals were to reduce the number of bank accounts and close duplicate custody and Euroclear accounts for regional entities; automate cash management, accounting and foreign exchange for 160 bank accounts with straight through processing; facilitate an automated target-balance account structure and eliminate the need for cash conversion cycles; and improve the operational effectiveness of its cash management, operations and accounting teams. A Dutch Besloten Vennootschap (BV) was chosen as the preferred legal entity. Now, rather than four cash pools outside the US holding various balances, a single cash concentration infrastructure has been created, relying on a target-balance account (TBA) structure with Citi. Despite having a year in which to execute our plan, implementing any new systems towards year end is unrealistic. So with a seven-month window in which to act, employees from treasury, tax, legal and accounting pulled together to effect the change. Not everyone worked full-time on the project, but essentially eight Intel full-time employees implemented this project, explains Nanbara. SunGard s Quantum is used to record funds transfers, intercompany loan balances and interest calculations. A zero-balance account (ZBA) structure was used. Accounts from eligible entities are now zerobalanced daily into a single header account in the name of the BV entity and each currency has a separate header account such that the cash pooling entity also manages the foreign exchange. Now fully implemented and working well, the settlement of intercompany payables and receivables has begun to offset the corresponding intercompany loan balances established. An April pilot successfully completed the netting of intercompany payables and receivables for five out of 38 entities. The remaining entities began on 12 th May It is the time to implement and the volumes involved that make this project stand out. From project kick off in April 2013 to roll-out in November, Intel created a Netherlands BV and an automated cash concentration system that consolidated excess cash from 99 entities in 34 countries into one pool, representing over 90% of the excess cash balances outside of the US. Many companies pool cash and have netted for a long time, but what differentiates this solution is that a firm the size of Intel was able to consolidate cash from more than 250 bank accounts in those countries and implement an automated, efficient solution using only one bank account within a seven-month timeframe three months earlier than projected. Eliminated four regional cash pools. Identified more than 100 bank accounts and approximately 50 duplicate custody, corresponding currency and Euroclear accounts to close. Automated the straight through processing of cash management, accounting and foreign exchange for over 160 bank accounts. Achieved cost savings from manual reviews, postings and investigations of cash positioning and funding, and improved the operational effectiveness of its cash management, operations and accounting teams. Reduced sovereign risk with entity accounts now maintained at zero balance. Piloted cashless settlement through netting intercompany payables and receivables with full roll-out commencing 12 th May. 22 treasurytoday Adam Smith Awards August 2014 in partnership with

25 HIGHLY COMMENDED Best Cash Management Solution TYROLIT Schleifmittelwerke Swarovski K.G Franz Bramböck, Group Treasurer and Risk Management Remko Streng of RBS and Franz Bramböck of TYROLIT Schleifmittelwerke Swarovski K.G. As a member of the Swarovski Group, TYROLIT is one of the world s leading manufacturers and suppliers of innovative solutions in grinding, cutting, drilling, honing, dressing and polishing. The Austrian company has more than 50 legal entities and 29 production facilities around the globe with around 5,000 employees. TYROLIT s cash management and payments processes were fragmented, with each of the company s subsidiaries maintaining its own banking relationships. The introduction of the Eurozone provided a first opportunity to consolidate the banking landscape and optimise the payment processes of the company s seven entities within the zone. SEPA was seen as a further chance not only to optimise the company s cash management set-up in the SEPA area but worldwide. The objectives were clear: TYROLIT wanted to further harmonise its banking landscape, optimise its treasury processes to support the group s ambitious growth plans, and generate significant savings as a result. The company decided to bring its cash management structure to another level in The toughest challenge TYROLIT faced was managing these projects with its existing headcount. Cash pooling. Intercompany netting. Centralised FX management. The lean treasury department has been transformed from a cost centre into a profit centre. Furthermore, the solution is an excellent platform for future evolvement, such as a payment on behalf model. Currently we at TYROLIT are investigating if this makes sense economically and the group is ready for the additional consolidation of tasks to centralise more control to central treasury, explains Franz Bramböck, Group Treasurer and Risk Management. The solution entails an organically grown and centralised set-up, which builds upon the company s existing euro cash pool and SEPA-ready infrastructure. In order to introduce more efficiency to the organisation s payment process, an intercompany netting solution was implemented and integrated with the existing euro cash pool. As a result, fully automated and free of charge accounting processes have replaced expensive cross-border intercompany bank transactions for all TYROLIT companies participating in both intercompany netting and cash pooling. On the back of this, a new TMS was introduced to enable the treasury to manage individual solutions as one, and with more efficiency by eliminating significant payment volumes. TM5, combined with a single-bank online channel, provides better quality and visibility in the organisation s cash-flow and future planning and as a side effect the group s worldwide FX Exposure has been centralised. To increase efficiency, TYROLIT partnered with RBS with the aim of enhancing the structure further and providing the group with more control and efficient use of its global liquidity. Enhancements were made by centralising the euro flows of the Asia and Middle East regions into the existing cash pool structure. The treasury also leveraged the group s second largest currency, USD, by centralising this from regional pooling hubs in North America (where an overlay structure is used), Asia, Europe and the Middle East, into Amsterdam. This solution stands out because of its holistic and highly automated nature. It combines several solutions: The combination of the cash pools and the intercompany netting solution reduced intercompany transactions (through their banks) by more than 90%. Central FX management through the Group s finance entity reduced the group s FX exposure by 50%, due to the natural hedges the in-house bank was able to accomplish. The treasury has been able to transform its operations from a cost into a profit centre, adding significant value to the group s financial performance. Through its own finance company, TYROLIT has been able to bundle all its treasury activities and service the entire group as an in-house bank. By doing this, the treasury function has been able to provide added-value not only to the group but also to each individual entity. Given that TYROLIT is a mid-sized company with a very lean treasury department, the team has been very successful in rolling out this project in only nine months and, at the same time, maintaining business as usual by staying focused on its day-to-day treasury tasks. in partnership with treasurytoday Adam Smith Awards August

26 HIGHLY COMMENDED Best Cash Management Solution Luxottica Group Marco Bigatti, VP Finance and Group Treasurer Chris Jameson, Bank of America Merrill Lynch collecting the Award on behalf of Marco Bigatti and Eleanor Hill With net sales of more than 7.3 billion in 2013, over 73,000 employees and a strong global presence, including businesses in China, Luxottica is a leader in the design, manufacture, distribution and sales of premium, luxury and sports eyewear. The existence of over 150 legal entities and more than 7,000 stores, including more than 4,000 in the US, created challenges for Luxottica in terms of managing cash flows and collections. Additionally, in light of China s complex regulatory and banking environment, large companies can often end up with a significant number of different entities within the country. While one of Luxottica s businesses in China is cash-rich, the other tends to be cash-poor, so a key objective was to offset balances against each other, thereby reducing the company s borrowing costs. A further objective was to manage retail collections in a more streamlined way by implementing a collections solution. The treasury team led the project to reduce the company s number of counterparty banks and developed an international cash concentration system including three zero-balance account (ZBA) structures at a continental level: Europe, North America (with BofAML), Australia, as well as one at the local level for RMB in China (also with BofAML). Managing more than 30 currencies, the team implemented a financial risk management policy and processes in order to manage flows, including intercompany flows. The China UnionPay collection solution is helping us to gradually centralise our retail collections to a single account, and the bank is leveraging its partner bank CCB to provide efficient cash deposit services for our retail stores. Marianna Mitolo, China and Asia Treasury Manager. Luxottica simultaneously rolled out a new global distribution channel, called Online, to collect payments from website sales, in order to support collections using all available local and international payment methods. And the latest development is Luxottica s e-commerce solution. Collections for RB.Com in the US, China and Europe have been implemented, supporting the business and enabling it to offer simple and fast customer services. The solution is notable in the way it simplifies and centralises retail collections. The China UnionPay collection solution is helping us to gradually centralise our retail collections to a single account, and the bank is leveraging its partner bank CCB to provide efficient cash deposit services for our retail stores, comments Marianna Mitolo, China and Asia Treasury Manager. The bank s electronic banking platform has streamlined our daily operations and allows us to manage our cash flows and accounts payables and accounts receivables more effectively. With integrated business support across continents, the solution has been made possible by an international team of 20 from across four continents, based in five different locations (the US, Ireland, Italy, China and Brazil). The Luxottica treasury team has been proactive and collaborative, following a simple and fast approach. As a result of the solution, the company has been able to centralise flows and collections processes while improving information reporting capabilities. The USD and RMB cash pooling solution has helped the company significantly reduce its financing and administrative costs, concludes Marco Bigatti, VP Finance and Group Treasurer. The Luxottica treasury team demonstrated great flexibility in its implementation of a cash management solution, supporting the company in following best practices while increasing efficiencies and return for the company. Luxottica appointed Bank of America Merrill Lynch (BofAML) to provide a cash management solution (including ZBA implementation) in the US, deposit services, ZBA in China through UnionPay, a point-of-sale (POS) collection solution, and online collections. Also on the cash management side, Luxottica s implementation of a treasury management system (TMS) has allowed its treasury team to manage cash flow forecasting and better support the business in its development projects. The implementation of the cash management solution in the US was a significant challenge in particular, owing to the company s complex network of several cash pooling structures in the country. Luxottica s solution has provided the company with a number of benefits, including: Process efficiencies. Improvements in its cash conversion cycle. Reduction and mitigation of risk. Reduction in borrowing costs. 24 treasurytoday Adam Smith Awards August 2014 in partnership with

27 HIGHLY COMMENDED Best Cash Management Solution Dow Corning Corp John G. Coon, Global Cash Manager Gary Minoletti of J.P. Morgan, John Coon of Dow Corning and Pascal ter Haak of Bank Mendes Gans Headquartered in Midland, Michigan, US, Dow Corning Corporation is a truly global company with a worldwide distributor network and nearly 12,000 employees. The company provides performance-enhancing solutions to serve the diverse needs of more than 25,000 customers worldwide. A global leader in silicones, silicon-based technology and innovation, Dow Corning offers more than 7,000 products and services via the company s Dow Corning and XIAMETER brands After operating for many years in a very manual-intensive environment with several stand-alone one-off systems, the treasury department decided that in order to improve its ability to manage liquidity and properly support the company, it needed to change how it administered its treasury operations. Our company s primary treasury management tool was MS Excel. Other systems used included several bank proprietary cash management and investment portals, an online foreign exchange (FX) trading platform, MS Access for trade confirmations, MS Outlook for communicating FX trade net settlements and trade initiations, and Bloomberg, explains Global Cash Manager, John Coon. None of the aforementioned systems communicated with one another, resulting in manual keying of data multiple times, creating data integrity concerns and requiring additional resources. Due to the disjointed technology infrastructure, management had limited ability to obtain and analyse key treasury data and it was time-consuming to do so. The company has transformed from a regionally focused function to a streamlined global treasury operation through: Implementation of a treasury management system (TMS) IT2, providing one data source for all treasury-related information, eliminating data re-keying. A trading platform (360T) with the ability to perform both FX and investment trades. Joining SWIFT, which has enabled the company to standardise its bank information reporting and payment functionality both of which have significantly reduced its need to access cash and investment portals and decreased overall bank dependency. Not only did we implement new systems, we selected top providers for every facet of our treasury operation and implemented best-in-class processes each step of the way, remarks Coon. All of the group s systems are integrated, enabling straight through processing from trade initiation to accounting. The company restructured its bank accounts, employing a single high-order prefix controlled disbursement account for the payment of multiple subsidiaries disbursements, and implemented a global multicurrency hybrid cash pool. The multicurrency hybrid pool, which is also an overlay structure, incorporates the benefits of both physical and notional pooling while leveraging both existing and new bank relationships, greatly improving liquidity management and cash forecasting capabilities. Our ability to reduce external debt levels is also greatly facilitated by borrower access to this larger group liquidity pool. In addition, the jurisdiction of the overlay bank substantially reduces withholding taxes paid on pool earnings, explains Coon. Many treasury departments claim they can view their global cash balances and they utilise one system to manage their treasury activities, but fall short of delivering on this statement. That is what separates Dow Corning s cash management solution from the others. The group now operates on one system that has been deployed at both its corporate headquarters and its regional treasury offices. This provides visibility to 98%+ of its cash and 100% of its debt with the comfort of knowing where its cash is located, enabling the company to better manage its liquidity. Provides same-day liquidity of $150m to 24 legal entities in nine different currencies from 17 different countries in five continents. Global visibility to 98%+ of its cash and 100% of its debt for 74 legal entities in 27 currencies operating in 34 countries in five continents. Automated the accounting entry posting process for 97%+ of daily transactions to its ERP system. Automated the entries for accruals on principal and interest payments on both debt and investments. Improved visibility of balance sheet hedging activity and associated accounting entries from one source. Reduced dependency on one-off reporting systems and their associated costs. in partnership with treasurytoday Adam Smith Awards August

28 WINNER Best Liquidity Management/ Short-Term Investing Solution Brembo Giancarlo Cicuttini, Treasury and Credit Manager Fabio Vespo, Citi and Giancarlo Cicuttini, Brembo Brembo is the world leader and acknowledged innovator of disc brake technology for automotive vehicles. Brembo supplies high-performance brake systems for the most important manufacturers of cars, commercial vehicles and motorbikes worldwide, as well as clutches, seats, seat belts and other components for racing. Brembo is also a leader in the racing sector and has won more than 200 championships. The company is based in Bergamo, Italy, with operations in 16 countries across three continents. Over the past three years, Brembo has undertaken a series of initiatives to move from a decentralised to a centralised treasury structure that concentrates most of its cash and liquidity management with Citi. It has successfully implemented physical cash pooling structures in the US, a euro cash pool in London (covering Italy, Poland, the Czech Republic, Slovakia, Germany and Spain) and a domestic RMB cash pool in China that went live at the beginning of The company also wanted to create a notional pooling structure, involving all its major currencies, including RMB. Brembo SpA s aim was to link this multi-currency notional pool with its existing physical pooling structures including a new cross-regional pooling structure linking its USD liquidity in the US with London. It also wanted to fully integrate these structures with its payment and collection activity, creating a seamless cash and liquidity management solution that could be easily managed by a small treasury team. In 2013, Brembo SpA created a multi-currency notional pool structure that has vastly simplified management of its bank accounts, optimised bank charges and made the company less reliant on bank overdrafts. Brembo can now efficiently manage the existing master accounts of its two zerobalancing cash pooling structures (euro and USD). A crucial element to the success of the solution is that we maintain almost all the bank accounts in the structure with Citi and use the CitiDirect platform globally with a central client definition, making compliance and account management easier, explains Giancarlo Cicuttini, Treasury and Credit Manager. Moreover, FX is fully integrated into the solution using CitiFX Pulse, which provides real-time market access to FX spot, forward, nondeliverable forward and swap pricing in over 400 currency pairs, 24 hours a day. The multi-currency notional pool adds important functional benefits to Brembo s existing FX structures, which include RMB invoicing for Brembo s two Chinese subsidiaries. This has eliminated FX risk for the Chinese entities and allows them to be managed more effectively from London by Brembo SpA, where it can arrange forward transactions or open orders with physical settlement of currency using its RMB bank account. The incorporation of RMB in the multi-currency notional pool means that positive RMB balances can now be used against negative balances in other accounts (as it is not yet possible to have negative RMB balances). The cross-regional physical cash pooling structure also created as part of this solution links Brembo s USD master account in New York (serving the USD zero-balancing cash pool structure) with a London Brembo USD account within the notional pool structure. The solution entailed the creation of a multi-currency notional pool, incorporating all the major currencies Brembo SpA uses: EUR, USD, SEK, JPY, RMB and GBP. Separately, a cross-regional physical pool was created, linking the USD cash pooling structure with London. The greatest challenge faced by Brembo was the need to change its internal culture as it moved from a decentralised to a centralised treasury structure. We also implemented the ISO XML file upload functionality to enable us to be SEPA-compliant and we will use a customised version of this file format outside Europe to manage domestic payments. We are currently working to customise the ISO XML file to manage ACH payments in the US directly through CitiDirect, concludes Cicuttini. Reduced reliance on bank credit lines the multi-currency notional pool has a single umbrella credit line linked to Brembo SpA s multiple bank accounts, giving the company greater flexibility. Reduction in bank charges. This final piece of the jigsaw marks the culmination of a multiyear project that has completely transformed Brembo s treasury structure and operations. 26 treasurytoday Adam Smith Awards August 2014 in partnership with

29 HIGHLY COMMENDED Best Liquidity Management/ Short-Term Investing Solution Microsoft Alex Blackmur, Fixed Income Team Eric Barka, Treasury Manager Jayna Bundy, Group Treasury Management, Treasury Capital Managment Daniel Packham of Barclays, Anita Prasad and Jayna Bundy, Microsoft and Mohit Manaktala, Bank of America Merrill Lynch Founded in 1975, Microsoft is the worldwide leader in software, services and solutions that help people and businesses realise their full potential. The challenge related to Microsoft s custodian banks. Microsoft had intended to leverage its USD tri-party agent, one of two present in the US, to implement a new EUR tri-party repo structure. However, its treasury team quickly realised that the majority of the dealers it benchmarked with housed most of its euro collateral with Euroclear or Clearstream. This practice where dealers move collateral back and forth between their existing US-based tri-party agent - was deemed neither efficient nor cost effective. Microsoft was faced with a number of hurdles to overcome: Counterparty identification and legal documentation (the process of final execution of documents took a significant amount of time and was not completed until mid-february 2014); Euroclear Bank tri-party agent on-boarding; negotiating eligible collateral schedules; and E2E SWIFT trade testing (SWIFT MT527 trade initiation messaging was embedded in the internal portfolio management system, BlackrRock s Aladdin. The use of MT527 was key to the confirmation and control process to support full straight through processing). With Microsoft s major acquisition of Nokia s devices and services unit, the optimal liquidity management and short-term investing vehicle was to implement a euro tri-party repo with Euroclear Bank as agent, with trading counterparties Barclays Bank, Merrill Lynch International and Deutsche Bank. This solution greatly enhanced the Microsoft Capital Markets trading team s ability to manage the large euro closing costs of over 6.5 billion. It also provided the ability to put large euro overnight and term fund balances to work with the safety of collateralisation that supplemented the core short-term debt and commercial paper investments for this major acquisition. With the impending acquisition, the treasury team began to prepare by holding collections of euro in the preceding months to closing. Euro balances were initially invested in euro-denominated debt and commercial paper. However, as these positions were short-term with rolling maturities, an additional euro liquidity cash management vehicle was sought as an alternative to uncollateralised bank sweeps for more effective overnight or term placements. The advantage of using tri-party repo as collateral taker or investor is the ability to mitigate market risk on securities collateral and operational risk through bi-lateral agreements outlining the terms and conditions, operating procedures, and acceptable collateral profiles, explains Eric Barka, Treasury Manager. Considering that Microsoft s treasury trades large notional amounts, ranging from 50 million to 500 million, tri-party repo offered best-in-class risk management and acceptable market rates of return. The treasury team was able to negotiate highly specific eligible collateral schedules with its counterparties including acceptable euro sovereign and supranational credit quality, concentration limits, and collateral margins. Using Euroclear as their agent ensured that there was effective management and oversight of matching terms of the deal, collateral selection, margin calls, settlements, and asset custody during the life cycle of the tri-party repo trade, minimising counterparty risk. This solution highlights the best practices of having the services of a tri-party agent perform and manage the daily repo trade life cycle tasks. Time taken to implement solution and realise benefits. Productivity gains: Real-time processing through the use of SWIFT MT527 trade initiation messaging provides full straight through processing capabilities including trade matching and status reporting. Process efficiencies: Comprehensive reporting providing visibility into daily pledged collateral from Euroclear Bank gives peace of mind that the tri-party repo trades are fully collateralised according to specific eligible collateral schedules. Risk mitigation: Secured exposure management and risk mitigation of counterparty default risk, legal risk through use of market standard agreements (GMRA), market risk on securities collateral through clearly defined acceptable collateral schedules, concentration limits and daily margining, and operational risks associated with settlement and corporate events. in partnership with treasurytoday Adam Smith Awards August

30 WINNER Best Working Capital Management Solution Mondelez International Finance AG Tom Jack, Assistant Treasurer Brigitta Keller of Citi, Mike Foye and Vivek Reddy of Mondelēz collecting the Award on behalf of Tom Jack Mondelez International is a US-based multinational confectionery, food and beverage conglomerate with brands such as Cadbury, Milka, Oreo and Ritz. The company prides itself on having the resources of a big global corporation alongside the speed and creativity of a start-up. Mondelez needed to bring transformational solutions to its business services centre (EBSC). The primary goal was to release resources to focus on more value-adding tasks for the market organisations and to simplify its banking infrastructure. However, it faced duplications in process, complex bank set-ups using a wide variety of electronic banking (EB) platforms and associated payment formats and security controls. To demonstrate the challenge it faced, prior to the project Mondelez had 29 banking partners across 24 countries with almost 500 bank accounts. Because of this the company used 110 different file formats; worked with 25 banking platforms and interfaces and used 40 different payment methods; which all led to extremely low straight-through processing (STP) rates. Mondelez successfully implemented two major projects under the OneBank (cash management) and Global SCF (working capital, supply chain finance) working titles. across regions to what it feels is a safe maximum. Mondelez services its entire inbound and outbound SWIFT ISO XML messaging for global cash and working capital management through just two SWIFT addresses. The company now has a stable, future-proof treasury and banking architecture with bank-agnostic connectivity (SwiftNet) and a single global file format (ISO XML V.3). Mondelez is also one of the first companies to implement the truly bank agnostic ISO XML V.3 as a single global file format. This greatly improves the flow-through of our payments across networks, explains Tom Jack, Assistant Treasurer. Furthermore, the solution was delivered during a period of immense business integration, which ultimately led to the demerger of Kraft Foods Inc., and the creation of Mondelez, the largest business start-up in corporate history. Despite our status as the world s pre-eminent manufacturer of snacks and our position as a global player, we are what we are as a result of significant heritage and old, long-established brands and culture. This has led us to pursue initiatives such as these that help us reduce complexity in our business, concludes Jack. When designing the OneBank solution, the project team focused on three distinct goals. 1. To bring simplicity, consistency and transparency into its banking operations through rationalising the number of accounts, systems and formats it used. 2. Work with Citi across the entire region to provide cash management capabilities and full end-to end control. 3. To design a corporate architecture which could be used as a foundational asset and replicated across other areas and functions. The Global SCF project, on the other hand, helped the EBSC realise the importance of prioritising SCF supplier invoices and installed processes that ensured processing uplift. Across all regions the project aimed to wean users off non-system driven, portal and spreadsheet-managed approaches as well as any related proprietary e-banking or host-to-host connections. These would instead be replaced by an ERP-interfaced single-file format, and communication would take place over the SWIFT network. Launched in the EU in 2013, the programme reached $600m before the end of the first year. It covers Mondelez's entities and suppliers in local and foreign currencies. By collaborating with its infrastructure and communications/b2b teams, the company has managed to leverage its ERP systems and the data flows Key Benefits: The OneBank project led to a significant improvement in bankrelated KPIs, including: Reduced clearing banks from 29 to one. Increased STP payments from 0% to 95%. Reduced file formats from 110 to two. Reduced bank e-banking connections from 25 to one. Similarly, the Global SCF project delivered a number of impressive benefits: The programme provided increased supply chain stability and supplier satisfaction whilst rolling out a new payments term extension initiative. Working capital benefits began to accrue for Mondel ez and its suppliers from day one. Leveraging the newly created, standardised architecture enabled the solution to be rolled-out within one year from the established European model across four additional regions, namely: EEMEA; North America; Asia Pacific and Latin America. 28 treasurytoday Adam Smith Awards August 2014 in partnership with

31 HIGHLY COMMENDED Best AP/AR Solution Microsoft Jose Luis Marti, Senior Credit Manager Spencer Clevenger, Senior Treasury Director Gladys Jin, Group Credit Manager David Meunier and Jose Luis Marti, Microsoft Founded in 1975, Microsoft is the worldwide leader in software, services and solutions that help people and businesses realise their full potential. Microsoft is re-inventing itself from a company which primarily sells software licenses to large enterprises, to a devices and services company, as demonstrated by the recent purchase of Nokia. The company is also looking to dramatically increase its customer base by focusing on selling software to SME s and in doing so focus increasingly on the margin, as well as net income. Alongside this re-invention, the business operations are also undergoing a major restructuring with its cloud strategy at the heart of this transformation. At the forefront of this ambitious move into the cloud and a higher volume of transaction business is the Worldwide Online Credit Services (WOCS) team, which handles credit, collections, cash applications, accounting and bank reconciliations. Comprising some 200 people, the WOCS team operates 24/5 across the globe from Redmond, Manila, Dublin, Buenos Aires, London and Singapore, with locations opening soon in Japan, India and China. Microsoft and its vendor partner put on our thinking caps and drove at the core of the issue. discrete tasks, like focusing on new customers until their first payment, providing higher levels of service to top-tier accounts, and acting more quickly on past due accounts. This enables collectors to master a few processes rather than coping with many. Reporting: New reports were created to focus each team on the most important tasks. For example, reports now help quickly identify customers who have never paid, have longstanding unresolved disputes, or are trying to migrate their account to an Enterprise Agreement. These reports focus teams on key tasks and speed up resolution time without increasing resources. Mobilisation: The new model allows Microsoft to quickly and effectively mobilise teams for special projects, peak loads, and projects which reports show are behind schedule. By pulling back and completely re-thinking how they did things, Andromeda has ensured that Microsoft can grow its margins, not just its revenues, with the cloud direct business. WOCS is excited to watch how Microsoft will continue to reap the benefits of Andromeda s innovations by holding down costs as they attract more and more customers to the cloud. Jose Luis Marti, Senior Credit Manager The WOCS team however were posed with a problem. With a growing volume of transactions in a business where operating costs are highly correlated with business growth, how could they contain costs while servicing the explosive growth? The problem was further compounded through having to manage a large, geographically dispersed team, which handles dozens of detailed processes and procedures. Microsoft and its vendor partner put on our thinking caps and drove at the core of the issue, explains Jose Luis Marti, Senior Credit Manager. The solution to the problem was Project Andromeda a complete redesign of WOCS s cloud credit and collections operations, based on specialisation, reporting and mobilisation: Specialisation: Previously collectors were assigned accounts, and handled them through all phases of the collections cycle. No more Andromeda split the workload into three distinct groups: pre-collections, collections, and post-collections. This allows teams to specialise in Andromeda has produced some dramatic results while revenues are doubling annually, operating costs are only growing 18% annually. Andromeda has created a FY14 cost avoidance of $6.5 million, which will only grow with the business. In addition, Andromeda has not sacrificed quality. WOCS s performance metrics and Customer Partner Experience scores have remained at consistent levels and furthermore, the results are improving even while costs are reducing. As a result of Andromeda, WOCS s percentage of AR 60+ days overdue is also consistently decreasing. The costs for managing Cloud collections have fallen to 1.5% of revenue as of year-end. And, relatively unheard of in the collections world, invoiced revenue is proving cheaper to collect than credit card revenue at 1.5% vs 3% of revenue. treasurytoday Adam Smith Awards August

32 HIGHLY COMMENDED Best Financial Supply Chain Solution NHS Business Services Authority Anirudha Panse, Citi, David Walton and Michael Hamilton, NHS Business Services Authority The NHS Business Services Authority (NHSBSA) is a Special Health Authority and an Arm s Length Body of the Department of Health which provides a range of critical central services to NHS organisations, NHS contractors, patients and the public. Historically, pharmacies receive a monthly payment from the NHSBSA comprising the following elements: An estimated advance payment for prescriptions submitted one month earlier (dispensed two months earlier). This payment is based on the total number of prescription items declared and the latest available average net ingredient cost for that pharmacy, less the value of prescription charges collected and declared. Plus the full value of the priced prescriptions submitted two months earlier (dispensed three months earlier). Minus the recovery of the estimated advance payment paid the previous month related to prescriptions submitted two months earlier. The Department of Health wished to introduce a new automated scheme designed to give pharmacies earlier access to the estimated advance payments. This means that pharmacies may be eligible to receive early monthly sums due to them from the NHSBSA as quickly as eight calendar days, to help with their cash balances and reduce their borrowing costs. As part of a broader UK government initiative aimed at helping small and medium enterprises (SMEs), this solution is a government-sponsored programme called The Pharmacy Earlier Payment Scheme. It is a collaboration between the Department of Health, The National Health Service and Citi. The scheme accelerates prescription repayments to English pharmacies to improve the pharmacy s NHS pharmaceutical services cash flow and minimise their borrowing requirements. The new programme means that after dispensed prescriptions are submitted and accepted by the NHSBSA, a non-recourse early settlement is now available from Citi, should the pharmacy wish to receive an early payment. The charge applied by Citi is based on the NHSBSA settling at maturity on day 60. This means that current borrowing charges are significantly reduced and Days Sales Outstanding (DSO) reduces to approximately eight days (a minimum 22-day improvement). The implemented solution works as follows: NHSBSA sends the approved dispensed prescription file to Citi as soon as it is approved. Citi s the enrolled pharmacies to notify them of all approved items. The contains a link to the Citi platform, where the pharmacy can view the approved dispensed prescriptions. The pharmacy can choose to take an advance payment in full and final settlement, with a small charge applied. The charge is transparent and can easily be calculated independently by the pharmacy. The pharmacy can choose not to take early settlement and receives the full value at maturity, but has control to see the prescriptions are approved and will be paid. Over 90% of pharmacies settle their invoices automatically and do not have the manual processes on the Citi platform. The innovation surrounding this service includes: Streamlined pharmacy on-boarding to reduce delays in accessing cash. No limits on joining, either value or volume, meaning the service is accessible to all. Full Dispensed Prescription process redesign by the NHSBSA to ensure automation of all data exchanged. The programme is an excellent example of a large purchasing organisation using its credit strength to protect its supply chain and reduce costs. The innovation is the adaptation of supply chain finance from a predominantly corporate product to meet the specific needs of a public sector service. The programme is already very successful, is still growing and is expected to double in throughput in FY 2014, helping more and more small businesses, concludes a senior civil servant involved in the project. The programme went live in May 2013 (for April 2013 dispensed prescriptions) and immediately assisted around 750 pharmacies receiving their NHSBSA payments early. Now over 1,000 pharmacies are regularly using the service. Key benefits of the programme include: It provides enrolled pharmacies with the option of receiving earlier payment for the provision of NHS pharmaceutical services. Payments are made in approximately eight days rather than 30 days. The programme helps to improve cash balances and reduce borrowing costs for pharmacies. The rate is based on the UK Government s rating, and charges are extremely low (typically 6 interest cost per month will be incurred per 10,000 payment). Registration for all pharmacies is free. The programme can be fully automated so there is minimal work for pharmacies who can choose to manually access the funds when they want to each month. 30 treasurytoday Adam Smith Awards August 2014 in partnership with

33 WINNER First Class Bank Relationship Management Holcim Stefano Bianchi, Corporate Finance and Treasury Hubert de Solages, BNP Paribas, Stefano Bianchi and Michael Furrer, Holcim Founded in Switzerland in 1912, Holcim is one of the world s leading suppliers of cement and aggregates (crushed stone, sand and gravel). It also supplies ready-mix concrete and asphalt, and provides related services. Holcim is a global company employing around 71,000 people, with production sites in around 70 countries. Historically, Holcim had little synergy between its companies operating in Europe. Transaction fees were not sufficient to satisfy all its lending banks and many resources were dedicated to maintaining bank relationships. Some countries, especially in Southern Europe, which were badly hit by the construction crisis, were paying high interest charges for their local working capital facilities and were regularly facing refinancing risks. There was no coordinated approach to meet the imposed deadline for SEPA compliance. Documentation for operating guarantees required in the construction business was not drafted according to Holcim s documentation standards. Holcim launched a project which would be able to address all these problems without exception. Holcim mitigated the impact on bank relationships by offering our group banks the possibility to participate in a fair and transparent selection process. Stefano Bianchi, Corporate Finance and Treasury In 2013 the company drastically changed its banking and funding setup in Europe in two steps. Firstly, a cross-border zero-balance euro pooling structure was established to replace local pools and local working capital facilities in each country. It also selected a single cash management and funding bank for the eurozone, where previously it had used 46 banks. Holcim mitigated the impact on bank relationships by offering our group banks the possibility to participate in a fair and transparent selection process, explains Stefano Bianchi, Corporate Finance and Treasury. Security and efficiency were optimised by establishing single host-tohost connectivity between the bank and Holcim s IT centre. Operating guarantee facilities for the region were granted by the bank, based on a uniform documentation. A central service level agreement was drafted to monitor the efficiency of the bank support desks and has put in place a billing report. Also embedded in the project, was full SEPA compliance which was achieved by the end of In brief, through taking a regional approach with its single eurozone bank, Holcim was able to innovate and thus benefit from increased transparency, better compliance and enhanced cost effectiveness. Implementation of the project was supported by BNP Paribas which was chosen as the bank for the entire eurozone, as well as for the euro cash pool. PwC Zurich also supported the project, in particular with regard to the bank selection process and transfer pricing documentation. The key benefit of this project is the transformational effect that this transaction will have on the company. Establishing the cross-border pooling structure and selecting a single cash management bank was a big step towards centralisation for Holcim, given the very local nature of the business and management structure which is characteristic of the cement industry. The implementation of the overall project was achieved in ten months and incorporated ten countries and 87 entities within its scope. This project will also now facilitate the establishment of a new European shared service centre (SSC). This project has been key to bringing transparency within Holcim, concludes Holcim s Group CFO. Standard bank system and connectivity: Sixty percent reduction in transaction costs. Leaner bank set-up with about 120 accounts for 87 legal entities (45% decrease). Lower cost of funds with central borrowings at Holcim Group level: (65% decrease). Elimination of refinancing risk on short-term financing, especially among Southern Europe countries. Single physical euro cash pool with automated sweeps and interest calculation; arm s length tax documentation released to all group companies. Full SEPA compliance. in partnership with treasurytoday Adam Smith Awards August

34 HIGHLY COMMENDED First Class Bank Relationship Management Omnicom Financial Services Gerard McGinnity, Deputy Treasurer Gerard McGinnity, Omnicom Financial Services Omnicom Group is a leading global advertising and marketing communications services company. It serves over 5,000 clients in more than 100 countries. In March 2013 Omnicom s treasury set a key objective of having a single centralised solution for the migration of its 300 plus autonomous eurozone agencies to SEPA. An ambitious goal, given Omnicom s decentralised operating environment, the multitude of accounting and payroll systems, the varying internal policies, practices and country legacy regulations and the number of banks involved. In addition, by creating a centre of technical excellence, Omnicom s treasury was able to provide significant support to its agencies. It was able to intervene on their behalf with system vendors and set up an internal file validation capability to perform payment file testing if bank file delivery channels were not ready. We also have the goodwill of our agencies thanks to the active support and assistance we gave them throughout the project, concludes McGinnity. As well as over 300 agencies, Omnicom had 16 banking partners in 13 different countries and more than 80 separate ERP/accounting and payroll systems. We put a dedicated project team together from treasury, IT and our financial institutions to design and manage the effort. The team s first step was to draw up a detailed project plan, explains Gerard McGinnity, Deputy Treasurer. The plan encompassed: Conducting a group-wide inventory of systems and outsourced services. Securing strong senior executive buy-in to the project. Achieving local responsibility through a network of on the ground coordinators. Creating a vibrant project community through the use of social technologies, primarily LinkedIn. Creating a centre of excellence within Treasury and establishing a special purpose SEPA web portal as a resource, communications and control hub. Rigorous project online reporting and tracking Multiple banks were involved in the design and rollout of the project. Among other benefits, this ensured the same consistent message was delivered to all its agencies. Not all groups are as decentralised and globally diverse as Omnicom. The company has demonstrated with this project that, despite these constraints, and with rigorous planning and execution, it is still possible to manage and direct multiple autonomous entities, to implement a centralised solution and avoid the wastage and non-standard solutions that can result when many entities separately tackle the same problem. A unique feature of the solution was the company s approach to fostering internal and external project communities. This created energy, engagement and a level of collaboration that contributed substantially to the ultimate success of the project. The first benefit from the solution adopted was the early achievement of full SEPA compliance for all Omnicom s agencies all agency payment files have been in the PAIN XML standard format since October In addition, centrally managing our agencies transition to the new standard gave us the strategic opportunity to transform our payments infrastructure and provide a gateway to further cost savings and efficiency gains. We are currently designing a centralised payments solution for our SEPA agencies. Up to now our decentralised business model and proliferation of systems had been barriers to payment centralisation, explains McGinnity. The other significant benefit is the cross-over learnings Omnicom can apply elsewhere in the group. The company is building upon its experience with this migration project to roll-out a similar automated clearing house migration plan and centralised batch payment solution for Omnicom s agencies across North America. It is also now looking at ways in which it can centralise collections in the eurozone and looking to use its work on SEPA as a platform for HR to standardise payroll services. The project has also yielded other benefits, including: An improved communications infrastructure that can be leveraged for future projects. A complete inventory of accounting and payroll systems across its agencies. The upgrading or replacement of a number of agency systems. Deeper understanding of individual payment processes. 32 treasurytoday Adam Smith Awards August 2014

35 HIGHLY COMMENDED First Class Bank Relationship Management TE Connectivity Donald Nash, Regional Treasurer, Americas Donald Nash and Joe Byrne, TE Connectivity TE Connectivity is a $14-billion global company that designs and manufactures highly engineered solutions which connect and protect data and power inside millions of products, from automotive, consumer, energy and industrial and broadband connectivity. Faced with the challenge of re-engineering its global cash management operations and banking structures, TE Connectivity s treasury team called upon its longstanding banking relationships and sought to deploy highly efficient, automated, electronic solutions. Innovative approaches also needed to be taken to improve visibility and risk controls, given the complexity of local banking regulations. The challenge was to develop a best-in-class request for proposal (RFP), allowing the process to serve as a scorecard for evaluating our existing and new banking partners around the world, explains Donald Nash, Regional Treasurer, Americas. To achieve this, TE Connectivity wanted to utilise the latest technologies to make its treasury operations as efficient as possible. TE Connectivity created an RFP scorecard which identified the key elements sought by the treasury. It employed a cross-functional team involving HR, finance, IT and treasury to evaluate the responses using ratings, weightings and calculated rankings submitted by each team member. The purpose of this scorecard was to replace subjective preferences in the evaluation process with a more objective approach. And by narrowing the scope of the process, banks were able to create more focused presentations discussing key process elements and showcase their best tools to support TE Connectivity s drive for efficiency. The RFP scorecard has also enabled a quicker process for making final decisions. Banking structures needed to include FX settlements, payroll, intercompany netting and support of the payments factory. Specific objectives of this intensive RFP process included: Optimal cash management structure including accounts and services. Reducing bank fees and other costs associated with cash management activities. Strengthening controls. Improving service support on all fronts. Identifying additional investment options. Rapidly deploying a banking and information system to manage global liquidity; providing access to all funds daily. Reducing cash held for operational needs. Improving visibility into the consolidated cash position. Minimising or eliminating overdrafts and settlement value date errors; mitigating exposure to bank(s). Creating a fully-fledged in-house banking structure. Seamless interface with ERP systems. Being prepared for seamless integration of acquired entities. Achieving automation of accounting and reconciliation tasks. Identifying solutions to decrease non-cash working capital; minimising or eliminating low-value transactions to drive down costs. Producing consistently high customer satisfaction. Given TE Connectivity s strength as a leader in technology, the treasury wanted to ensure it was utilising best-in-class technology and optimising efficiencies throughout the organisation. The small treasury staff developed an innovative and highly aggressive RFP process to improve its bank structures and relationships, and take full advantage of the latest cash management technology. This scorecard process uses key attributes, and then weights them. Each cross-functional team member then evaluates the banks for each attribute. The results are then discussed, follow-up questions asked and subsequent answers are incorporated into the results, which are then used to decide the final rankings. In China, the treasury used its RFP process to reduce banking systems from five to two, and reduced the number of banks from five to two. As a result, the treasury was able to successfully centralise processes and automate payment approvals in the company s ERP system via a host-to-host interface. The treasury gained greater control through standardised processes and an enhanced cash pooling structure with more bank accounts enabled greater efficiency. Overall cost savings of 70% were achieved. In Brazil, similar performance improvements were achieved, delivering overall cost savings of around 15%. Bank accounts were reduced by 12% in EMEA. While bank systems were reduced from four to two, moving from local systems to fully integrated global platforms. Here, the cost savings exceeded 75%. The entire process took place in record time and in addition to China, Brazil and EMEA, TE Connectivity executed its plan globally, with equal speed and success. treasurytoday Adam Smith Awards August

36 WINNER Best Card Solution WorleyParsons Ltd Simon Holt, CFO Sophie Polednik of Bank of America Merrill Lynch, Christoph Guettinger and Brenda Connell of Worley Parsons collecting the Award on behalf of Simon Holt Headquartered in Australia, and present in 43 countries, WorleyParsons is a leading global provider of professional services to the resources and energy sectors and complex process industries. The company s extensive and expanding global footprint had resulted in fragmented, decentralised and disparate travel and expenses (T&E) and procurement processes. We didn t have access to all our information as quickly as we would like says Simon Holt, the company s CFO. We wanted to be able to start asking questions about how we could improve not only our T&E spend but also our procurement spend. Over time 100,000 corporate procurement invoices will be replaced by the card solution, resulting in additional cost benefits. By providing a convenient, easy-to-use card they will also continue the drive for improved compliance to their procurement policy. Simon Holt, CFO, WorleyParsons Ltd The first step was to stop people from implementing their own local card programmes and to recognise the value of a global solution that would support information to the business as well as the integration of back office processes. For us it wasn t just about implementing a T&E programme, which some of the locations were trying to do, says Holt. We saw the value of adopting a more cost-efficient way of doing business by using a card programme that would include procurement. We knew that if we got this right we could not only reduce costs by consolidation but also reduce costs in our back office processes. Bank of America Merrill Lynch (BofAML) initially presented WorleyParsons with a comprehensive accounts payable proposition, highlighting the benefits of implementing a global corporate T&E and procurement card programme. This led to the bank doing some more extensive analysis on our existing accounts payable file, including performing vendor analysis as to which payments were cardable, says Holt. This outlined to WorleyParsons the enormous opportunity it had in optimising its procure-to-pay process and gaining benefits from card payments. WorleyParsons selected the solution provided by BofAML on the basis of the bank s technology platform, global footprint and the ability to get information into the company s Global reporting and Account Management (GRAM) portal. The solution includes local currency cards across many of the company s operating countries. A cross-border USD card is also being implemented to support WorleyParsons other locations. Where procurement is concerned, the solution includes leveraging cards as a payment method and using the bank s innovative virtual card solutions in North America, Europe and Asia. The solution also provides full integration with the company s expense management system. The programme, which will incorporate over 4,500 cards with over $400 million in cardable spend per annum, is set to cover over 40 countries in Asia Pacific, EMEA, Canada, the United States and South America. As well as implementing best practice card processes at a global level, WorleyParsons has looked beyond the typical parameters of a card programme and identified further opportunities to benefit the company. We ve embraced card payments not only for our traditional T&E, but also for our global procurement spend, says Holt. This is where we see the real value of the solution. Holt expects that over time 100,000 corporate procurement invoices will be replaced by the card solution, resulting in additional cost benefits. By providing a convenient, easy-to-use card they will also continue the drive for improved compliance to their procurement policy. WorleyParsons is implementing a T&E and procurement card programme provided by BofAML. The benefits of the project are expected to include the following: Achieving visibility over spend at an operational level. Achieving better management of the company s spend. Ability to pay suppliers in a more timely fashion. Gaining efficiencies in the company s procure-to-pay process. Centralising programme administration by leveraging the company s shared service centre in Malaysia. Standardising processes and consolidating them into a single programme. 34 treasurytoday Adam Smith Awards August 2014 in partnership with

37 HIGHLY COMMENDED Best Card Solution Destinations of the World Keith Fernandez, Founder and CEO Morgan Salmon of Citi and Keith Fernandez, Destinations of the World Destinations of the World is a leading global travel industry wholesaler with a network of 21 offices in 16 countries worldwide. Its core principle is focused on connecting travel professionals around the globe. To enhance the experience of its customers in the travel industry worldwide, Destinations of the World wanted to improve the functionality of its online booking system. Specifically, the company wanted a secure tool that would enable it to book hotel stays quickly, efficiently and with control and proper reconcilement. To achieve this it needed a tool that was intuitive and did not add complexity to existing work practices. Given the global nature of Destinations of the World s operations, it was essential that any solution incorporated FX capabilities as we wanted to reduce our FX risk, explains Keith Fernandez, Founder and CEO. In addition, the company sought to improve its control and reduce the potential for fraud. Flexible reporting capabilities were also required in order to improve efficiency and compliance. To overcome this challenge Destinations of the World selected Citi s Virtual Card Account solution. This provides a real-time link to Citi s systems, allowing easy access to Virtual Card Accounts. When Destinations of the World needs to purchase a hotel booking it enters the necessary information into its front-end tool, which automatically pulls a card number, expiration and CVV2 card verification value from Citi s systems. functionality of the virtual card solution has been seamlessly integrated into Destinations of the World s proprietary front-end tool. Most importantly, the solution includes a fully-integrated FX capability across 14 currencies in 13 countries in Europe and the Middle East, with further expansion across multiple Asian markets planned this year. Given the global nature of Destinations of the World s operations, it was essential that any solution incorporated FX capabilities as we wanted to reduce our FX risk. Keith Fernandez, Founder and CEO This solution has improved the quality of service we can offer our clients. By offering the ability to raise virtual cards in 14 currencies, the solution protects purchases from foreign exchange fluctuations, thereby reducing our FX risk, concludes Fernandez. Virtual cards can be raised in 14 currencies, reducing the FX risk for the company and offering the flexibility to purchase foreign currency at the best rates to settle its monthly statements with Citi. Destinations of the World has control over the dates when the card number can be processed, the amount authorised, and the merchant that can authorise the payment. This gives it the protection and control it needs to limit fraud or incorrect charges. Each card is also tagged with extra data associated with the flight or hotel information which is then fed back to Destinations of the World s systems once the card transaction is completed. This data enables easy reconcilement of payments across the company s supplier base. Furthermore, the Citi Virtual Card Account solution is simple to use and provides bespoke reporting capabilities, helping to improve compliance. The project has been delivered without the disruption and need for retraining that would normally accompany a new solution. Instead, the Cost savings. Productivity gains. Improvements in days payable outstanding (DPO). Pricing enhancements. Foreign exchange gain(s). Risk removed or mitigated. in partnership with treasurytoday Adam Smith Awards August

38 HIGHLY COMMENDED Best Card Solution Yorkshire Water Carolyn Bywater, HR Finance and Procurement Support Manager, Shared Services, Business Support Group Jim Wilkinson, Procurement Specialist Mark Cassidy of RBS, Carolyn Bywater and Jim Wilkinson, Yorkshire Water Yorkshire Water is a water supply and treatment utility company that supplies around 1.24 billion litres of drinking water each day. The company also maintains 62,000 miles of water and sewage mains enough to circulate the earth. Yorkshire Water (YW) works with a large number of low-value, highvolume suppliers. In processing its payments, the company inevitably incurs costs and spends a significant amount of time dealing with the related administrative work. The challenge for the Shared Services Team was therefore to establish a process which would offer cost savings and also reduce the administrative burden of these orders and payments. A virtual card solution was the answer. As an initial step, YW engaged with its key suppliers to understand their card acceptance capability and to assess the challenge faced. At the same time, procurement teams met with RBS and approved software vendors to work with the suppliers in embedding the card number into their ordering and invoicing system. We trialled the concept first with one of our suppliers, working alongside them to ensure the solution was successful for both parties. The trial proved to be very successful and saved up to 16 hours a week in processing time. Carolyn Bywater, HR Finance and Procurement Support Manager, Shared Services, Business Support Group The solution instead relies on the data that flows through from using the card to substitute all internal paper processes and therefore reduces internal procurement costs and drives end-to-end process efficiencies whilst building long-term supplier relationships. The introduction of an embedded virtual card number solution across key suppliers enables the YW Shared Services Team to reduce costs, improve process efficiencies, remove systems, and reduce purchase order and invoice creation, whilst still receiving accurate data and transactional information to meet compliance, governance and tax requirements. Furthermore, working closely with suppliers in developing the solution whilst integrating the card numbers into its systems, cements supplier relationships and drives best practice in YW s supplier and procurement process. We trialled the concept first with one of our suppliers, working alongside them to ensure the solution was successful for both parties. The trial proved to be very successful and saved up to 16 hours a week in processing time, explains Carolyn Bywater, HR Finance and Procurement Support Manager, Shared Services, Business Support Group. Yorkshire Water is now working alongside other suppliers and RBS to integrate more suppliers into the programme so that significant cost and time savings can be made. The virtual card programme is also aligned with the Shared Services (Yorkshire Water) initiatives of eliminating paper for good. It comes as little surprise, then, to learn that: Where it is appropriate to do so, this solution will be rolled out across a wide base of key volume suppliers, says Bywater. The card transactions were originally set up in a test environment to ensure the correct level of required data flowed through into YW. Where selected suppliers were not card capable, RBS engaged with the supplier and worked closely with them to become card capable for the first time, providing them with terminals and software. So how does it work? The virtual card number is embedded into the suppliers ordering system, thus removing the need for a plastic card, providing improved risk and governance benefits. Through the contractual commitment that YW has with its core suppliers, all orders with that supplier are automatically applied to the card. This removes the need to raise an internal purchase order and the need for the supplier to raise an invoice. The delivery of a virtual card integrated with all key suppliers. Reduced process costs. Delivered efficiency savings. Productivity gains. Pricing enhancements. 36 treasurytoday Adam Smith Awards August 2014 in partnership with

39 WINNER Best Financing Solution Microsoft Joel Combs, Director of Treasury Capital Management Anita Prasad, General Manager of Treasury Capital Management George Zinn, Corporate Vice President and Treasurer Jim Stenson, Wells Fargo Securities, James Millar, J.P. Morgan, Anita Prasad and Jayna Bundy, Microsoft and George Patterson of Barclays Founded in 1975, Microsoft is the worldwide leader in software, services and solutions that help people and businesses realise their full potential. To achieve its capital structure objectives, Microsoft was looking at the opportunistic issuance of public debt. We strongly believe in finance when you can rather than when you have to, explains George Zinn, Corporate Vice President and Treasurer of Microsoft Corporation. Microsoft had some key objectives it wished to achieve when issuing public debt including: To set new benchmarks in terms of pricing. Achieve diversification of its investor base. Diversify the maturity ladder of existing bonds and this new issuance. Be opportunistic and benefit from the arbitrage across currency markets by analysing the different currencies and markets to see where it can leverage from a natural hedge of the currency exposure which it takes on by issuing bonds in a non-usd market. Maintain an element of surprise, which as most corporates know is a tough one to achieve. Microsoft achieved all its objectives by issuing a multi-currency and multi-tranche debt of $8 billion. The lead banks that helped it refine its strategy and ensured smooth execution in Europe and the United States simultaneously were Barclays, J.P. Morgan, HSBC and Wells Fargo. This approach of launching a simultaneous dual-currency transaction in the European and US markets is not typical. Popular wisdom suggests that if European investors participate in USD issuance and you issue in Europe at the same time, those orders will fall out of the USD books. Many advised therefore that this approach would reduce its price leverage and also reduce the size of the order book. We respectfully disagreed, states Zinn. Microsoft put the strategy in place when it carried out its inaugural euro-denominated bond issuance in This first foray into the euro bond market was used to learn the intricacies of the market and build relationships with the investor base. A very small transaction also helped it establish a pricing benchmark for future issuance. Ultimately, the order book was over-subscribed, offering a great indication of investor appetite for Microsoft paper. Our openness, signalling that we were doing both euro and USD issuances, was important to us and helped it further solidify our investor base, explains Anita Prasad, General Manager, Treasury Capital Management. As Microsoft considered its options it noticed that Basel III and other regulatory reforms were likely to increase the cost of bank financing and therefore would not be a good bridge to a capital markets transaction. Furthermore, with rates expected to increase, it wanted to ensure it raised sufficient capital in the long-term public debt markets; and thus lock in interest savings. Given its strong AAA credit ratings, the team wanted to make sure that they effectively monetised this advantage. If you look at bond pricing for AAA and strong AA companies, there isn t a meaningful difference in credit spread over UST. Our challenge, therefore, was to ensure that we diversified our investor base and sought out arbitrage opportunities in global markets to achieve the lowest cost possible, explains Joel Combs, Director of Treasury Capital Management. The transaction set several industry records: Largest single-day capital raise across euros and USD since 2001 the logistics of pulling off $8 billion in two markets in a single day are impressive on their own. Achieved combined investor demand of $20.5 billion (USD equivalent) across the EUR and USD transactions. At the high end of the price guidance despite the large 3.5 billion taken out of the market. Negative new issue concessions in ten-year and 30-year, which is remarkable given the tight spread levels. It received participation from several central banks who are not a typical corporate buyer. The success of this transaction is a testimony to the ability of this team to stay a step ahead, think strategically and be proactive in managing opportunistic issuance in debt capital markets, said Amy Hood, EVP and CFO of Microsoft. The strategy generated over $175 million of savings in interest expense purely from leveraging the eurodenominated issuance instead of issuing just in USD. Solidified further investment base. Euro market issuance opened up a new market for Microsoft. Leveraged its AAA credit rating. Locked in interest savings. in partnership with treasurytoday Adam Smith Awards August

40 HIGHLY COMMENDED Best Financing Solution SAP Steffen Diel, Global Treasury, Head of Treasury Finance Helen Kyle of SAP collecting on behalf of Steffen Diel and Lucy Devlin of Citi SAP AG is a multinational software corporation, headquartered in Walldorf, Germany, with operations in more than 130 countries. The company is the world s leading provider of enterprise application software, business analytics and enterprise mobility with more than 253,000 customers and almost 67,000 employees worldwide. SAP wanted to refinance its existing revolving credit facility (RCF) in order to reduce both margins (the potential interest expense) and bank charges (the yearly commitment fee), optimise the documentation, and create a leaner bank relationship management process. To achieve this, the company decided to establish a two-tier system for its banking partners, with differentiated access to additional treasury business. The banks placed in tier one would be granted access to all treasury business, while the tier two banks would be excluded from certain areas. In addition, the size of the facility was adjusted given SAP s growth strategy and transition into the cloud (the facility increased from EUR1.5 billion to EUR2 billion). The key challenge was to introduce the new tiered structure to the participating banks while increasing the facility amount. While we anticipated some resistance from the banks to follow our proposal, it turned out that it was fully understood and supported by the respective banks. Steffen Diel, Global Treasury, Head of Treasury Finance To overcome the challenge the company openly communicated the purpose of the new structure to its banks, which would offer improved mapping of credit commitment levels to the portfolio of accessible treasury business. SAP also clearly stated to the participating banks its expectation as to which tier it believed would be best suited for each bank. While we anticipated some resistance from the banks to follow our proposal, it turned out that it was fully understood and supported by the respective banks, explains Steffen Diel, Global Treasury, Head of Treasury Finance at SAP. SAP achieved a 100% hit rate with the invited banks, with all 27 agreeing to sign the final credit facility agreement on 13 th November From this date the EUR 2 billion RCF became effective. The Bank of Tokyo- Mitsubishi, Landesbank Hessen-Thüringen, Citigroup, and Deutsche Bank all acted as book-runners to this transaction. Allen & Overy LLP Frankfurt was SAP s legal adviser. Using a two-tiered structure, segregating banks into two different credit commitment levels is a real first for SAP. This structure helps to optimise bank relationship management through offering a leaner approach. The tiered structure also assists in setting clear expectations towards the banks regarding any ancillary business opportunities. Innovation was shown through the soft market sounding process. The treasury team called every individual bank on the pre-defined list in order to explain the targeted terms and conditions. The experience with the soft market sounding was very positive, based on providing the utmost transparency at an early stage, close alignment with the banks relationship managers and optimised process management. The result was a 100% hit ratio (ie none of the invited banks dropped out) and a significant oversubscription of more than 60%. The successful refinancing of SAP s syndicated revolving credit facility once again acknowledges SAP s strong financial position and excellent reputation in the capital markets, says Diel. Through this project SAP has secured lower financing costs, with a tenor of five years (with two one-year extension options). Furthermore, through the adjustment of the existing core bank group, the RCF is able to better support SAP s global growth strategy, especially in emerging markets. For example, a Chinese bank was successfully invited to facilitate SAP s operations in Asia. The new facility also reached one of the lowest credit margins for German companies (reduced from 45bps to 22.5bps) and a stronger pricing than other German A-rated corporates in transactions in 2012/2013. In brief, SAP achieved: A reduction in bank charges (yearly commitment fee). Increase in facility amount to EUR2 billion (from EUR1.5 billion). Lower margins (reduction of potential interest expense). Optimisation of portfolio of participating banks. Leaner bank relationship management. 38 treasurytoday Adam Smith Awards August 2014 in partnership with

41 HIGHLY COMMENDED Best Financing Solution Toyota Financial Services Adam Stam, Manager, Structured Finance Paul Foster, Toyota Financial Services, collecting the Award on behalf of Adam Stam Toyota Financial Services (TFS) is the finance and insurance brand for Toyota in the United States, offering retail automotive financing and leasing through the Toyota Motor Credit Corporation (TMCC). TFS currently employs more than 3,300 associates throughout the United States, and has managed assets totalling over $90 billion. In recent years, demand for green bonds has grown, as more portfolio managers have expressed a preference for investments that meet both their return objectives and address the problems of climate change and sustainability. However, the supply was limited, as green offerings were largely limited to bonds from sovereign, super-national and agency ( SSA ) issuers. The TFS Green Bond addressed this latent demand for corporate green bonds by targeting both frequent ABS investors and SRI portfolio managers who had not previously purchased ABS bonds. The programme was designed to diversify TFS investor base, highlight Toyota s market-leading line-up of green vehicles and extend the company s environmental commitment to our capital markets activities, explains Adam Stam, Manager, Structured Finance. A Green Bond is a debt offering for which the issuer declares that the proceeds will be used towards environmental sustainability purposes. These may include the purchasing of plant and equipment and also financing environmental projects, or other green initiatives, like green vehicles. The proceeds of the TFS Green Bond are being used exclusively to fund new retail finance contracts and lease contracts for green vehicles. To be eligible for financing the vehicles must meet specific criteria, including using a gas-electric hybrid or alternative fuel powertrain; recording a minimum EPA estimated MPG (or MPG equivalent for alternative fuel vehicles) of 35 city/35 highway; and obtaining a California Low-Emission Vehicle II (LEV II) certification of super ultra-low emission vehicles (SULEVs) or higher, which would include partial zero-emissions vehicles (PZEVs) and zero-emissions vehicles (ZEVs). Initially, TFS considered creating a transaction in which the underlying securitised receivables would consist exclusively of green vehicles. However, we ultimately decided to securitise a representative mix of the entire Toyota, Lexus and Scion model line. In other words, the green vehicle criteria were applied only to the use of proceeds, not to the securitised assets, explains Stam. This consistency in collateral with prior Toyota ABS transactions was critical to retaining their established investor base. At the same time, using a pool of standard automobile loans to grow TFS s investment in green assets appealed to environmentally-minded investors. These self-identified green investors accounted for 15% of the orders in the transaction. TFS will produce monthly reports until the proceeds have been used in their entirety. These will highlight the amount of green vehicles financed by each model type, as well as the amount of remaining unused proceeds. This gives investors certainty that TFS is using their investments to finance green vehicles as promised. The TFS Green Bond was the first of its kind in the automotive industry and served to enhance Toyota s reputation for leadership of green innovation. Because no other automotive finance company had previously issued a green bond, TFS needed to independently develop a transaction structure and environmental standards for the eligible vehicles to ensure that the deal would appeal both to traditional buyers of Toyota asset-backed securities and green-motivated investors. During the project the TFS Capital Markets team collaborated closely with the marketing and environmental communications departments at their US affiliate, Toyota Motor Sales, to develop standards which reinforced Toyota s overall environmental communication and product messages in North America. Over the long run, investor diversification helps TFS to maintain pricing tension when we bring new deals to market, concludes Stam. The TFS Green Bond helped the company diversify its base of ABS investors. The transaction strongly appealed to many greenmotivated investors who had never before bought bonds in a Toyota asset-backed securitisation, including investors who manage socially responsible investment (SRI) portfolios. The strong investor demand allowed TFS to upsize the deal to $1.75 billion, making it the largest Toyota ABS deal since Allows TFS to maintain pricing tension in the future. treasurytoday Adam Smith Awards August

42 WINNER Best Foreign Exchange Solution Wyndham Worldwide Corporation Mike Cassidy, Corporate Treasury Director, EMEA Mark Grant, Bank of America Merrill Lynch, Mike Cassidy and Frank Sassano, Wyndham Worldwide Corporation Wyndham Worldwide Corporation is one of the world s largest hospitality companies, spanning six continents. The company was spun off from the Cendant Corporation in July In July 2012, Wyndham embarked upon a treasury transformation project with the goal of optimising operations in the areas of cash management, intercompany netting and FX risk management. The goal of the treasury team was to get as much idle cash as possible out of the business and to build a central hub for all of its international cash outside of the US in support of the company s expanding international operations. To achieve this objective, a more robust in-house bank (IHB) was required to support the daily movement of cash in place of the twice-weekly movements of the legacy set-up. At the same time, we were looking to implement a new netting programme while also setting up best-in-class processes and tools to manage FX exposures more effectively, explains Mike Cassidy, Corporate Treasury Director, EMEA. The lack of visibility over the company s FX exposures proved to be one of the biggest issues. These were reported manually via a push methodology, resulting in missed exposures and unnecessary profit and loss volatility. Something had to change. At the same time, we were looking to implement a new netting programme while also setting up best-in-class processes and tools to manage FX exposures more effectively. During the project, the company has worked with various counterparties, most notably Bank of America Merrill Lynch (BofAML), and has implemented technology provided by Kyriba and Reval. Despite having a team of only two EMEA-based treasury professionals at the time, Wyndham has successfully undertaken a highly ambitious project replacing the legacy outsourced IHB with a more flexible and innovative solution managed internally, a project normally reserved for large corporations. Wyndham s treasury team, however, identified an opportunity to overhaul existing processes and technology. And while the timeline for the project may have appeared challenging at the outset, the highly disciplined approach, weighing up different potential approaches and making strategic decisions quickly and effectively, meant the team was able to meet its original deadlines. Overall, the project has allowed Wyndham to put in place a scalable structure which will enable the company to make the best use of internal cash in order to move forward with acquisitions when required. In addition, given the company s acquisitive nature, the new in-house bank also provides a plug-and-play vehicle to absorb future M&A integrations. Meanwhile, risk was also reduced and yields were enhanced. We ve seen significant improvements in our FX Scorecard metrics. Coverage levels are in tighter tolerance to policy. And by going through the exercise of extracting exposures from the ERP systems, we have found and corrected cases where FX exposures were incorrectly reported and calculated, notes Cassidy. Mike Cassidy, Corporate Treasury Director, EMEA A critical first step in the transformation project was the creation of the new in-house bank, as well as the implementation of the single-entity multicurrency notional pool. This enabled the establishment of a formalised netting and settlements policy, as well as a more focused, centralised approach to the company s FX risk management decision-making. In doing so, Wyndham has undertaken a treasury transformation programme which includes optimising the company s liquidity management structure, putting in place a netting programme and improving FX risk management practices. It has now achieved realtime visibility over its global cash balances as well as real-time access to liquidity held by various legal entities around the world. Cost savings: The company has seen a net $1.6m uplift. Productivity gains: The cost of additional headcount was more than offset by the outsourcing fees saved. Process efficiencies: A dynamic daily solution replaced twice weekly solution whilst saving costs. Foreign exchange gains: In 2012, the treasury outsourcer executed 4 billion absolute notional forwards, swaps and spots across 342 trades. 40 treasurytoday Adam Smith Awards August 2014 in partnership with

43 HIGHLY COMMENDED Best Foreign Exchange Solution TUI Travel Plc Anna Blasco, FX and Treasury Manager Darren Anniss, Director of Financial Planning, Reporting and Control Dan Wilson of CitiFX and Anna Blasco of TUI Travel Plc TUI Travel Plc is one of the world s leading travel groups with over 220 brands in 180 countries and more than 30 million customers. The company was formed following the merger of First Choice Holidays and the Tourism Division of TUI AG, which owns 56.4% of the company. Hotelbeds, a wholly owned subsidiary of the Accommodation & Destinations sector of TUI Travel PLC, is the number one global business-to-business (B2B) bedbank with an online portfolio of 60,000 hotels across 180 countries. Hotelbeds accepts payment for hotel bookings made via its database upfront in the payer s home currency. Payment to the hotel is then not due until after the traveller checks out, and is made in the hotel s functional currency. Hotelbeds is exposed to FX risk between the time of the initial reservation and when the payment is due, which can be a period of months, a year, or sometimes even longer. Furthermore, given the company s global reach and high growth in emerging markets, it has exposures to highly volatile currencies. Hotelbeds was exposed to adverse FX movement, and was therefore looking for a solution to mitigate the impact of FX risk on its earnings. Historically, Hotelbeds used a generic data feed to convert its hotel inventory across currencies. To protect ourselves against FX volatility, Hotelbeds would add a margin to these rates to buffer against possible moves. Therefore, pricing was not optimised, and earnings volatility was still an issue, explains Anna Blasco, FX and Treasury Manager. Hotelbeds worked with CitiFX to design and implement an FX risk management solution which would maintain the margin over the lifecycle of a booking, from reservation to payment; eliminate FX exposures, reducing the month-on-month P&L volatility; not interfere with the existing payment collection process and be fully automated with STP to existing systems. The automated InstantFX hedge overlay is a highly effective risk management tool. There is no human intervention daily rates are systematically fed and uploaded to price Hotelbeds inventory. Transaction data is then automatically sent to Citi for trade booking, where Citi s system processes Hotelbeds bookings and on average nets them down ten to one. As part of this solution, CitiFX provides fully transparent pricing and fixed spreads are applied to currency benchmark rates, calculated from independently sourced market rates. These rates are locked in, and therefore Hotelbeds does not need to add a protection margin to its FX rates, allowing its pricing to be more competitive. As business dynamics change, it is easy to modify the assumptions driving the hedge solution, offering greater flexibility. The travel industry is highly competitive so bedbanks like Hotelbeds need to be able to offer competitive prices whilst maintaining margins. The InstantFX solution allows Hotelbeds to automatically lock in margins, removing any FX impact and the overlay solution is highly efficient as it ties the rates at which hotel rooms are priced to those at which hedges are placed. This means that Hotelbeds is able to manage its FX in a highly effective and efficient manner. CitiFX developed this custom solution for Hotelbeds by adapting its InstantFX guaranteed rates product to suit its specific needs. However, it could also be implemented by any company looking to automatically hedge the FX risk arising at any point of its business model. Highly effective risk management which dramatically reduces earnings volatility due to FX risk. Margins are locked in from the time of the hotel booking. More competitive pricing of inventory. The fully automated solution allows TUI Travel A&D s treasury to focus its efforts on other value-add areas. Integration into Hotelbeds reservation system, providing scalability to accommodate growth, new markets and currencies, business lines or changed assumptions. Transaction data yields interesting insights into customer buying behaviour, such as, advance bookings and cancellation rates. in partnership with treasurytoday Adam Smith Awards August

44 WINNER Best Risk Management Solution Toyota Financial Services Vanita Aggarwal, Director, Treasury Risk Tim Carley, Numerix, Paul Foster, Toyota Financial Services collects the Award on behalf of Vanita Aggarwal and Niklas Olenäs, Skysparc Toyota Financial Services (TFS) is the finance and insurance brand for Toyota in the United States, offering retail automotive financing and leasing through the Toyota Motor Credit Corporation (TMCC). TFS currently employs more than 3,300 associates throughout the United States and has managed assets totalling close to $100 billion. TFS needed to implement a new system to enhance its valuation methodologies, expand funding diversification through complex structures and to ensure compliance and regulatory best practice. However, it also wanted to retain its existing treasury management system as its system of record. Data for a portfolio of approximately 1,400 transactions was required to be transferred to the new system and kept in sync whenever a new deal was added or an existing deal amended. This created a very complex data exchange challenge between two core systems. One thing which TFS wanted to avoid was a black box solution, eg not being able to manage and adjust the interface going forward in-house. The solution was the implementation of the Position Data Loader (PDL). This automatically fetches relevant transaction data from Wall Street Suite (WSS), maps it to an agreed (non-standard) common interface format, then encodes the data for Numerix and transfers it to the Numerix database. This process operates daily, picking up all new deals and any changes that are made. As there are different ways a deal can change over its lifetime, this involves a complex mapping process to find and extract all the relevant data from WSS. The mapping is set up within the SkyREPORT interface builder and passes the converted data to the Numerix loader, which runs automatically on a daily basis, ensuring data in WSS and Numerix are always in sync. TFS asked two providers to work with us to solve these challenges. SkySparc is a consultancy with deep knowledge of Wall Street Suite, TFS s core treasury system and was the ideal partner in developing the data extraction piece. Numerix has the financial and mathematical skills necessary to develop the mapping, coding and data import into Portfolio, explains Vanita Aggarwal, Director, Treasury Risk. This project demonstrates true innovation, managed by attaining the best from people, processes and technology. To achieve its objective of improving funding options and maintaining regulatory best practice without taking on additional operational risk, TFS was seeking an uncharted territory solution to reliably synchronise complex data across two contrasting environments. By bringing in two able external partners with unique skills and knowledge into a multi-disciplinary team, TFS has obtained an automated, robust and flexible solution, the PDL, which makes use of highly innovative software: SkyREPORT interface builder and Numerix Portfolio. As a result of implementing the PDL, TFS is now able to automate the valuation of more complex structured derivative transactions, such as step-up callables and zero-coupon callables. This should allow for more diversified and efficient funding, reducing borrowing cost and therefore interest expense. The project was also completed on time and within budget, concludes Aggarwal. Improving efficiency and reducing operating risk through automation. Boosting TFS funding diversification capabilities. Complying with and meeting best practice for accounting rules. Meeting the FASB accounting rule promoting the Overnight Index Swap (OIS) to be the standard discount curve for valuation was a key driver for the PDL project. With PDL automation TFS is well positioned to be amongst the first corporate treasuries to adopt OIS. TFS worked with Numerix as a vendor Numerix Portfolio is a powerful front and middle-office application that provides a consistent valuation and risk framework for pricing and hedging simple and complex portfolios, including structured products and exotic derivatives. TFS worked with SkySparc as a consultant SkySparc specialises in Wallstreet Suite and brought its financial and technical expertise to the project using SkyREPORT, its advanced reporting, testing, reconciliation and integration platform, to build the interface and fully automate the complex data extraction process. 42 treasurytoday Adam Smith Awards August 2014 in partnership with

45 HIGHLY COMMENDED Best Risk Management Solution Pfizer Barry McKernan, Credit Analyst Barry McKernan, Pfizer and Marco Buzzi, Bank of America Merrill Lynch Pfizer is one of the world's largest pharmaceutical companies by revenues. Headquartered in New York, the company has a healthcare portfolio which includes medicines, vaccines and many of the world s best-known consumer healthcare products. Pfizer has a cash portfolio of approximately $46 billion containing long and short-term debt securities. With a small team, maintaining surveillance of credit risk in a portfolio of this scale requires innovative techniques and technology. The previous Value at Risk (VaR) methodology Pfizer employed relied solely on credit default swap (CDS) data, which in a number of cases suffered from either a lack of available quoted rates or data of questionable accuracy owing to the illiquidity in the CDS market. Bank of America Merrill Lynch s (BofAML) Lighthouse approach to analysing a portfolio and calculating credit VaR did not support sovereign or short-term securities such as commercial paper. Pfizer worked with the BofAML team to adapt Lighthouse to incorporate sovereign securities and to use a proxy measure for short-term security risk. Lighthouse builds upon the standard Merton model, using equity option pricing, capital structure and equity market valuation of individual counterparties to inform the calculation of credit risk, while also accounting for the diversification benefit within the portfolio. Pfizer s implementation of Lighthouse also uses the benefits of CDS data for sovereign issuers, where liquidity is strong, while using the credit option adjusted spread (COAS) approach of Lighthouse which incorporates equity market valuations, credit spreads, capital structure and option pricing to assess the credit risk of corporate counterparties. The equity price underlying the fixed income security is a mainstay of Lighthouse analytics. While this works well for analysing corporate bonds it does not directly work for sovereign issuers who do not have an equity component underlying their bond issuances. This posed a problem for Pfizer since a large portion of its portfolio is exposed to sovereign risk. Rather than leave these exposures outside of our analysis we use a risk mapping approach. We start by summing the exposures of each sovereign counterparty and calculate a money-weighted average maturity for each. We input each sovereign into Lighthouse along with its respective weighted-average maturity date. Lighthouse then uses the CDS data to calculate the risk associated with these sovereign positions, explains Barry McKernan, Credit Analyst. Additionally Lighthouse does not recognise short-term securities, such as commercial paper. To overcome this hurdle we input our position in these securities into Lighthouse by equating them to a BofAML high-grade (AAA-A) short-term corporate credit index as a proxy. This index was selected because it best reflected the risk profile of Pfizer s exposures, adds McKernan. As Pfizer searched the market for a solution that met its credit risk needs it became apparent that there were many traditional credit risk solutions on offer. These varied widely in terms of type of methodology, sophistication of analytics and ease of use. This project undertook the difficult task of analysing several of these products across the spectrum of their needs. It evaluated Credit Metrics, Moody s Credit Edge, Credit Suisse s Portfolio Risk Plus as well as BofAML s Lighthouse. The in-depth analysis Pfizer performed on each of these products before making its selection makes this project unique. Over a period of three months, the treasury team met with the vendors repeatedly, dug deep into their analytics, uploaded their sample portfolio into their systems to get a feel for ease of use and finally summarised and debated the findings before making their final decision. The solution offers enhanced surveillance of the company s credit risk. The analysis is based on security level current market data, for example, implied volatility from traded liquid equity options and is hence forward-looking. The solution takes into account correlation among portfolio securities and is thus able to capture the diversification benefits embedded in the portfolio. The solution is cloud-based and intuitive. Frequent analysis runs can be performed quickly and on-demand. in partnership with treasurytoday Adam Smith Awards August

46 WINNER Best in Class Benchmarking Brocade Communications Systems Inc Chris Hanson, Director, Treasury Yun Kong, Manager, FX and Treasury Operations Brian Hunt, Brocade Founded in 1995 and headquartered in San Jose, California, Brocade is an industry leader in providing reliable, high-performance network solutions that help the world s leading organisations transition smoothly to a virtualised world where applications and information reside anywhere. The company has approximately 4,000 employees worldwide and serves a wide range of industries and customers in more than 160 countries. Prior to implementing its cash management optimisation project, Brocade faced a number of issues, including manual processes throughout the finance department and having no automatic feed or central storage of bank statements, images or reports. From a systems point of view, there was also a reliance on bank portals and host-to-host connections, as well as duplicate payment systems and processes. Additional challenges included less than optimal bank relationships and account structures; independent working groups with limited touch points and understanding of fellow groups roles and a lack of optimisation of existing technology such as Oracle and Orbit TMS. Our goal was to implement an efficient, economic and scalable solution utilising the latest treasury technologies available, while minimising bank costs and redundancies, explains Chris Hanson, Director, Treasury. To support its overall optimisation goal, Brocade established a benchmarking project to identify best professional practices and organisational standards to maximise value for the company. To benchmark industry best practice it took the following steps: It began by asking a broad big picture question: how does Brocade use its banks for cash management? This was supported by sub-set questions: Are cash processes manual or automated? Do we have the optimal banking structure in place in order to automate? Do we have the most efficient cost structure? Do we have the right system and technology in place? It then conducted an internal process review: Brocade conducted numerous meetings on cash management with each process owner from domestic and international GL, AR, AP, payroll and tax. All 28 processes that used banking information were documented using process mapping spreadsheets and flowcharts. It also asked for feedback on what their pain points were when working with banks or bank reports. Finally it carried out an external process review: Brocade held various discussions with banking partners, reference clients, SWIFT clients, TMS vendor clients, and other treasury organisations in its network. The objectives were to identify the best professional practices and the best organisational standards to maximise value to the company in the most cost-effective manner, while also identifying alternatives and different approaches to help broaden out the company s professional experience, developing professional networking. Brocade s treasury took a leadership role in finding the right solution to its technology challenges by having deep-dive conversations with multiple industrial leaders, system vendors, peer companies, and banking partners. It also spent time with each process owner and completely mapped all cashrelated processes across functions. Only after this exercise did they truly understand everyone s pain points and issues, and come up with a complete wish list from each function. After thorough research and analysis, it chose the most innovative solution that could bring the most benefits to the organisation. What we put together was a holistic solution that incorporates Oracle, Orbit TMS, and Swift connectivity all at the same time, explains Yun Kong, Manager, FX and Treasury Operations. Benchmarking played a key role in developing this holistic solution. Additional highlights include integrating Oracle and Orbit for end-to-end cash processes, adopting ISO XML & SWIFT MT Standards, establishing central bank report storage / being paperless and minimizing bank portal usages. All these were realised within a short timeframe with a moderate investment, resulting in a remarkable ROI payback within a year, explains Hanson Through its benchmarking project and subsequent technology restructure, Brocade achieved: Efficiency and productivity gains. Reduced manual errors; reduced bank fees. Mitigated counterparty risk. Optimised company bank and account structure. Improved collection process for AR. Shortened reconciliation and close time for GL. Simplified payment processes for AP, payroll and tax. Automated treasury cash management and bank administration functions. 44 treasurytoday Adam Smith Awards August 2014

47 HIGHLY COMMENDED Best in Class Benchmarking Microsoft Chase Johnson, Treasury Manager Chase Johnson, Microsoft Founded in 1975, Microsoft is the worldwide leader in software, services and solutions that help people and businesses realise their full potential. Operational risk is an under-appreciated issue within the industry and missed or late trades can create hidden problems or trading losses that may go undiscovered for months. While confirmation teams do a good job of mitigating this risk it has never been an easy task for the treasury to measure or analyse their performance. Prior to the creation of this tool, we had five analysts who would spend at least five hours each scrubbing and summarising the operational data in Excel. Once completed, one of these analysts would then take this data and put it into a slide deck, taking another five or more hours. The process was tedious and the analysts spent far more time getting the data into workable form than actually doing any rigorous analysis, explains, Chase Johnson, Treasury Manager. Over time we ve picked up on several trends that have allowed us to make changes that have improved these KPIs. Jayna Bundy, Group Treasury Manager, Treasury Capital Management Using elements of the Microsoft Business Intelligence (BI) Stack such as Power View and Power Pivot, the investment operations team created the Trading Metrics Dashboard. The dashboard seamlessly summarises several data feeds from disparate trading platforms into a single, easily digestible showcase for reporting the team s KPIs to senior leadership. Major components: Data table page: Provides consolidated performance metrics in data table form by instrument and can be filtered by year or month. Non-FX dashboard: Graphical interface showing the number of trades in each month, trade type, portfolio, currency, how many were confirmed late and with which counterparty. FX dashboard: Same as above but for FX. This is broken out separately for better visualisation of specific FX related trade activity. Late trades: Shows an aggregate time series of late trades and total trade volume to highlight trends. The most innovative aspect of this solution is that it involved no IT budget and was created by a single, non-developer analyst. By utilising the Microsoft BI Stack, other business users should be able to create their own custom solutions to problems that in the past would have needed substantial IT resources. Outside of this tool we also benchmark our different systems with other corporates. For instance, before implementing Misys, we benchmarked with several other corporates to determine if the platform would meet our needs. During the recent regulatory upheaval with EMIR and Dodd-Frank we heavily benchmarked with similar corporates to ensure best practice was being implemented everywhere possible, explains Johnson. Our primary KPIs for this tool are late trades and trades confirmed via straight through processing (STP) in a system such as FXall or Misys. Both are measured relative to the total number of trades in a given month. Over time we ve picked up on several trends that have allowed us to make changes that have improved these KPIs, adds Jayna Bundy, Group Treasury Manager, Treasury Capital Management. Since implementing the Trading Metrics Dashboard earlier this year we have completely done away with slide decks in our quarterly meetings with the treasurer. With this interface we can dive deep into the data for ad-hoc analysis in the meeting as needed. In fact, our meetings have become more about ad-hoc analysis than anything else. We ll come prepared with a few talking points but the meeting will almost always deviate from the script. As a result, these are now much more productive and engaging. Furthermore, the feedback from our audience has been remarkable to the point that we are now transitioning as many reports into this new format as possible, concludes Bundy. Time taken to implement solution and realise benefits. Productivity gains. Process efficiencies. Risk removed/mitigated. treasurytoday Adam Smith Awards August

48 HIGHLY COMMENDED Best in Class Benchmarking Telefonaktiebolaget LM Ericsson Ragnar Lodén, Head of Corporate Finance George Pittas of Ericsson collecting the Award on behalf of Ragnar Lodén and Mark Tweedie of Citi Founded in 1876, Ericsson (Telefonaktiebolaget L. M. Ericsson) is a Swedish multinational provider of communications technology and services. The company is headquartered in Stockholm, Sweden and looks to use innovation to empower people, business and society. Following the telecoms industry crisis in the early 2000s, Ericsson began a major restructuring that transformed the strategic and operational nature of the company. To ensure that it could meet the business changing requirements, it was essential that the treasury underwent a similar transformation. The goals of the treasury were wide-ranging but centred on consolidating and centralising its treasury functions in Stockholm. Given the scale and reach of Ericsson, the transformation of the treasury was carried out as a decade-long project. In restructuring, Ericsson created a Finance Transformation Programme with multiple streams, including treasury and banking. The treasury and banking stream analysed Ericsson s existing structures and undertook a number of major projects as part of Ericsson s transformation. Chief among these were the adoption of SAP globally (with shared master data), the creation of a host-to-host based automatic banking solution for payments, a centralised approach to bank account management, a reduction in banking partners, and the centralisation and standardisation of all payment-related functions to a single shared service centre (SSC). Ericsson also wanted to reorganise its treasury structure and analysed its existing competencies to assess where positions needed to be added or removed. More generally, roles such as process management became specialised and global in nature to reflect Ericsson s new centralised treasury and ensure consistency and streamlined decision-making, explains Ragnar Lodén, Head of Corporate Finance. Following a series of benchmarking exercises, a framework of key performance indicators (KPIs) was established in several different areas. On the payments side, Ericsson put in place means of measuring of the total number of payments across the group, the number of automated payments, and the number of manual payments. It also established KPIs to monitor its cash management, including the cash balances for all its entities, bank charges, and the number of bank accounts. After a decade of carefully managed change and investment, Ericsson has achieved its objectives, which have stood the test of time despite a macroeconomic and business climate that has changed beyond recognition. The ten-year Finance Transformation Project has enabled a centralised treasury structure that can meet the changing needs of the business. Benchmarking, including Citi Treasury Diagnostics, a comprehensive analysis that evaluates treasury practices, has been an important tool in enabling Ericsson to achieve its objectives and realise the benefits of its treasury transformation. Ericsson is clearly in good company with its benchmarking processes given the number of treasurers using KPIs, as demonstrated by the many responses to the KPI module in Treasury Today s corporate treasury benchmarking studies. There is always something to learn and it is very useful to follow up initiatives one is driving yearly through KPIs and benchmarking. We have measured efficiency for some time, such as automation and the number of bank accounts. Furthermore, we are increasingly measuring quality and compliance which means that activities outside the finance organisation are also now relevant for us to measure, concludes Loden. While the exact figures have not been disclosed, Ericsson has reached an extremely high degree of automation, reducing its number of manual payments to a minimum by more than half. Ericsson now has a global finance organisation with a culture of transparency and consistency that is applied across all aspects of its operations, including interaction with its banks and other internal and external stakeholders. In addition to sizeable efficiency savings, Ericsson s finance transformation aided by benchmarking has smoothed the path of the company from a compliance perspective as it grows in more complex and regulated markets. Specifically, post-implementation benchmarking in 2013 revealed the effectiveness and robustness of Ericsson s new streamlined structure in meeting regulatory challenges such as Sarbanes-Oxley, the Single Euro Payment Area (SEPA) and a series of national regulatory changes. Ericsson has worked with Citi to analyse the results of the company s treasury diagnostics benchmarking to ensure that further potential efficiencies are identified and acted on, especially in relation to regulated markets where Ericsson conducts an increasing proportion of its business. 46 treasurytoday Adam Smith Awards August 2014 in partnership with

49 WINNER Best Process Re-engineering Solution Itron, Inc. Edward R. Barrie, Assistant Treasurer Beatrice G. Ransquin, Edward R. Barrie, and Byron R. Jackson of Itron Inc. and Mark Sutton of Citi Itron is the world leader in designing, manufacturing, marketing, installing and servicing systems and fixed communication networks for automatic and electronic meter reading. It employs thousands, supporting more than 8,000 customers in more than 100 countries. In 2007, Itron had ballooned through a transformational, international acquisition that created a decentralised business with 150 legal entities in 40 countries. The company had FX exposure to more than 30 currencies and a lack of visibility into its banking AP/AR and payroll activities. Its technology architecture comprised multiple ERP systems, proprietary banking interfaces, accounts with nearly 60 banks, and there was no centralised intercompany lending and no multi-currency netting or crossborder pooling for euros. In short, it had a very complex, highly inefficient, sub-optimal technical and operational architecture. Our main challenge was around the sheer scale of the change management within the organisation, explains Edward Barrie, Assistant Treasurer. The global re-engineering solution that was implemented has delivered operational and financial efficiencies through these core features: An efficient and compliant SEPA solution using ISO XML payment message standards. On-boarding of over 30 banks globally for various levels of data integration and messaging over SWIFT in less than 12 months including statement reporting, wire payments, bulk payments and other data exchanges. Daily global electronic visibility to 88% of Itron s bank accounts, covering over 98% of Itron s cash balances along with advanced reporting of balances by subsidiary, country, region, currency and counterparty. Real-time visibility of daily and short-term cash positions through the importing of ISO XML payment files generated from Oracle, along with current day statement reporting received via SWIFT into the IT2 application. Standard technology and process for generating wire payments through IT2 and the SWIFT FIN network. Migration from bank proprietary to SWIFT/ISO XML for A/P and A/R processes, enabling greater automation, standardisation and simplification. Introduction of automated bank statement reconciliation on a daily basis without human intervention, generating both labour and financial efficiencies. Improved compliance and fraud mitigation through the introduction of daily bank statement reconciliation. Lower processing and routing costs through the adoption of the ISO XML bank statement from the receipt of additional structured data. Banking master reference data management sourced from SWIFTRef and shared across the organisation in Oracle and IT2 to reduce failed payments and enhance compliance. FiREapps provides robust analytics that bring balance sheet FX exposures into sharp focus and allows effective management through targeted hedging. The circular nature of payments, bank statement reporting and reconciliation with posting to the G/L provides more timely FX exposure balance data to be reflected in FiREapps with hedges adjusted accordingly. Integration of FX trades executed via FXall into IT2 with subsequent cash wire settlements managed via SWIFT messaging. This is a truly global multi-faceted project that has focused on delivering an architecture that simplifies, standardises and centralises all treasury processes across 130 countries, whilst ensuring a best-in-class automated straight through reconciliation model and enhanced liquidity optimisation. A single global instance of the Oracle ERP (R12) provides the foundation of the technology stack, which is integrated with the IT2 Treasury Management System and supporting specialist applications including SWIFT, FiREapps, Bloomberg and FXall. This was a global project that had scale and complexity, which has now enabled the definition of standard global processes and provided full visibility and transparency of transactions in addition to using information to make better informed decisions. This solution leverages technology to the max, to free people from managing transactions and manual analysis to systemic analytics with standardised financial data to optimise financial and operational efficiencies, explains Barrie. This global strategic initiative has delivered best-in-class cash management architecture for Itron, concludes Barrie. Key Benefits: Cost savings. ROI. Time taken to implement solution and realise benefits. Productivity gains. Process efficiencies. Improvements in DSO, DPO and DIO. Foreign Exchange gains. Risk removed or mitigated. in partnership with treasurytoday Adam Smith Awards August

50 HIGHLY COMMENDED Best Process Re-engineering Solution Avis Budget Group David Calabria Vice President and Assistant Treasurer Rachel Navarro, J.P. Morgan collecting the Award on behalf of Avis Budget Group Avis Budget Group is a leading global provider of vehicle rental services, through its Avis, Budget, Zipcar and Payless brands, which have more than 10,000 rental locations in approximately 175 countries around the world. For Avis Budget, doing business across Europe was hampered by operational inefficiencies and higher costs associated with managing multiple banking relationships and dealing with regulations and practices that varied from country to country. A lack of online reporting and centralised control over regional activities created further challenges. In addition, the decentralised nature of the company s payment structures severely limited visibility into balances, leaving idle cash and causing the treasury team to miss opportunities to deploy excess funds. The mix of semi-manual and disparate processes across Avis Budget s corporate European operations also created inefficiencies in staff processing time. The impending Single Euro Payments Area (SEPA) compliance deadline for payment and direct debit processing became the impetus for the company s vital and far-reaching treasury transformation initiative. Critical objectives of the initiative included transition to an optimum, highly efficient disbursement banking structure for the company s European business. We set the goal of moving the inefficient processing procedures used in each country to a shared services centre (SSC) with the focus of identifying and integrating the European business with best practices in international cash management, explains David Calabria, Vice President and Assistant Treasurer. These involved standardising payment processing for each country on a single global format, utilising a single-bank platform for disbursements in Europe, improving visibility to balance and transaction details and creating value by gaining efficiencies and centralising customer service and support. The team worked closely with its banking partners, including J.P. Morgan, to re-engineer the company s European treasury function. This entailed implementing an innovative pay-on-behalf-of (POBO) account structure to reduce the number of bank accounts, centralising payables to the SSC, centralising to a pan-europe pooling structure and upgrading the treasury workstation to a global platform. This innovative initiative enabled Avis Budget to become SEPA-compliant and helped bring its European treasury in line with best-in-class corporate treasury operations. The new pooling structure enabled the efficient daily sweeping of balances into accounts in the U.K., increasing visibility and providing better control of cash. Direct feeds from pooling accounts to the new treasury management system have automated the generation of all intercompany loan balances. The enormous challenges of this initiative re-engineering the company s European treasury function to include an innovative POBO account structure, centralising payables to the SSC and upgrading the treasury workstation were achieved significantly ahead of schedule. A sixmonth end-to-end project to incorporate SEPA go-live for all euro entities by 1 st February 2014, with a fully integrated solution, has transformed the region into a fully centralised structure incorporating both the EMEA headquarters and SSC. The new platform allows new countries and entities to be easily added as the company grows. Users now enjoy global access through a single online platform that delivers a centralised contact point for both submissions and queries, explains Calabria. Reduced risk as a result of central management of bank accounts and payments. Significantly simplified management of funding from the liquidity pool to payables accounts. Standardisation and automation of the payables process using a banking partner s host-to-host solution that simplifies reporting, payment processes and reconciliations. Payments made on behalf of entities are now automatically applied from account entry to entity loan positions. Satisfies evolving regulatory requirements, eg. Dodd-Frank and EMIR. As a result of these improvements, the full-time employees of local country teams spend less time on daily cash management tasks and are re-focused on more value-added activities. In addition, more than 88 man-hours a month are saved using automated payment tools. 48 treasurytoday Adam Smith Awards August 2014 in partnership with

51 HIGHLY COMMENDED Best Process Re-engineering Solution Eli Lilly Giuseppe Rossi-Espagnet EMEA Regional Cash Manager Françoise Neuville of BNP Paribas collecting the Award on behalf of Giuseppe Rossi-Espagnet Founded in 1876 and headquartered in Indianapolis, Indiana in the United States, Eli Lilly is the tenth largest pharmaceutical company in the world and distributes products across 143 countries, with manufacturing plants located in 13 countries and clinical research conducted in 50 countries. Lilly has a global staff of approximately 38,500 employees and is consistently ranked as one of the best companies in the world to work for. Before the project Eli Lilly realised that its current treasury model was not sustainable and it needed to operate more efficiently. In late 2009, Eli Lilly embarked on an effort to reduce its operating expenses and consolidate operational activities. As part of this effort, Lilly sought to redesign and centralise its general accounting, purchase-to-pay, and orderto-cash processes among four regional shared service centres (SSCs) EMEA, North America, Latin America and Asia Pacific. To achieve its stated objectives, the EMEA region needed to standardise and rationalise its processes and systems: Standardise and automate collections and payment processes with the support of a single instance of SAP and a single interface (SWIFT). Standardise and automate the upload, posting and clearing of the daily electronic bank statement (EBS). Standardise and automate cash concentration and funding of legal entity accounts. Achieve total visibility and access to global cash. Rationalise banks and bank accounts. In order to move to a shared service centre, we needed to implement a regional banking model, explains Giuseppe Rossi-Espagnet, EMEA Regional Cash Manager. Eli Lilly moved from a decentralised to a centralised model in EMEA, which included the following: Payments were automated and centralised, reducing rejections. Single instance of SAP. Single bank portal for the region for emergency or tax payments. One bank per region, leading to improved banking relationships and support. Simplified account structure (with a standard of one bank account per legal entity), leading to a reduction in administrative costs and bank fees. Maximised and automated physical cash concentration. BNP Paribas and SWIFT Service Bureau were the solution providers for the project. In the current challenging economic environment, many companies are under pressure to improve their efficiency and optimise resources. Eli Lilly implemented a comprehensive and scalable strategy across 43 countries in EMEA, within a three-year timeframe. Eli Lilly s effort serves as an excellent success story and best practice for those interested in centralising and optimising general accounting, payment and collection activities in the fragmented and diverse European market. The regional efforts also expanded the value and function of the EMEA SSC. We are extremely satisfied with the project and the benefits delivered, concludes Rossi-Espagnet. Simplification and optimisation of its systems and processes: single regional bank portal, single bank interface for disbursements, single instance of ERP. Payments were automated and centralised, with minimal rejections 0.6% of total payments, which is an all-time low. Consolidation of banking activities via BNP Paribas led to a decline in bank fees, a reduction in administrative activities and improved customer service with a single point of contact. Greater control and visibility, leading to improved management of trapped cash. Prepared Eli Lilly to be SEPA compliant, well ahead of the February 2014 deadline. With an automated, centralised payments structure, Eli Lilly s performance indicators in EMEA for cash management have improved as follows: 95% of payments are processed through the central ERP infrastructure. 90% of all financial transactions are posted automatically in the ERP. Bank accounts have been reduced by 40%, resulting in lower administrative costs (including bank fees) and better control. The return on cash investment has increased considerably as a result of better cash consolidation and active management of cash. in partnership with treasurytoday Adam Smith Awards August

52 WINNER One to Watch Microsoft Jayna Bundy, Group Treasury Manager, Treasury Capital Management Jamie Christel, Treasury Manager Pankaj Gudimella, Senior Manager Jayna Bundy and Jamie Christel, Microsoft Founded in 1975, Microsoft is the worldwide leader in software, services and solutions that help people and businesses realise their full potential. The Microsoft treasury team utilises 1,300 bank accounts with 85 banks worldwide and makes over 12,000 treasury wire payments each year, totalling over $240 billion. Supporting such a high volume of wire payments through manual and paper wire requests was a cumbersome and inefficient process. Furthermore, it created delays during Sarbanes-Oxley audits when the team was asked to pull paper backup to ensure adequate support and authorisation for all of the transactions processed each year. In an effort to strengthen controls and increase operational efficiencies the cash operations team worked with internal technology teams to design and build a custom solution. Prior to the solution, wire initiators used InfoPath templates, s and paper forms to request wire transfers. While the InfoPath over solution was an improvement over unstructured and paper requests, the template was difficult to maintain and changes were not always backwards compatible with previously completed forms. We had some key objectives with this project: user interface, notification, integration to SAP bank master data, validation of SAFE limits and archive directory and archiving of wire requests for audit and reporting, explains Jayna Bundy, Group Treasury Manager, Treasury Capital Management. that no one individual can complete a wire transaction from start to finish. Reconciliation: The solution has allowed for a more timely reconciliation of payment transactions. Built-in archiving, reporting, and search functionality also allows Microsoft s treasury controllers to quickly verify that all transactions on the bank statement match Microsoft s general ledger. Integration with SAP: The treasury is able to automatically upload wire requests using pre-approved business partners, thanks to WRT s integration with SAP. The WRT is also fully integrated with SAP bank master data. Elimination of confidential information being ed. The WRT app allows users to be truly global and view wire requests, backup documentation and approve or reject wires via their Windows Phones, concludes Jamie Christel, Treasury Manager. The judging panel certainly felt this was a deserving winner in this category and very much One to Watch. The cash operations team harnessed the power of their internal technology to build a solution improving the functionality and control of the end-to-end wire process. The solution, Wire Request Tool (WRT) is built using Internet Explorer, SQL server, Visual Studio and leverages the Windows Azure cloud platform, enabling the quick build, deployment, and management of the WRT application across a global network of Microsoft-managed data centres. This framework not only allowed for a global interface with built-in workflows that can be used for all wire requests but also allowed the treasury team to develop the WRT phone application available to all Microsoft employees using a Windows Phone device, says Pankaj Gudimella, Senior Manager. Leveraging existing cloud support enables secure off-corporate network access and phone operations. Also, for wire requestors and approvers alike, the WRT offers an automated, secure solution that is available to all Microsoft employees globally, whether they are in the office or on the go. Segregation of duties: The WRT enhances the treasury s existing segregation of duty by automatically separating the wire process so Strengthens operational controls and resource efficiencies by integrating WRT and SAP, the ERP system and wire processing platform, for wire upload without manual touch points. Automatic validation of wire approvers against Microsoft SAFE limit data and Active Directory authentication for user authorisation. Utilises Microsoft s internal technology to build a robust solution in the cloud to allow for secure off-corporate network access via a user interface including a Windows Phone application for on-the-go wire approvals. Aligned to their Go-Green initiative by utilising an Internet Explorer-based user interface to eliminate the need to print thousands of wire request forms and supporting documentation. 50 treasurytoday Adam Smith Awards August 2014

53 HIGHLY COMMENDED One to Watch Severn Trent Water Stephen Baseby, Deputy Treasurer Lucy O Grady, Dawn Warmington and Rosa Legassick of Severn Trent Water collecting the Award on behalf of Stephen Baseby, with Martin Baker and Jamie Hills of Barclays Severn Trent was formed in 1974 as a regional, state-owned water authority based in Birmingham and is responsible for water management and supply, and waste water treatment and disposal, in the catchment areas of two of Britain s largest rivers the Severn and the Trent. Severn Trent Water wanted to offer as many customer bill payment options as possible, at the same time showing innovation and forward thinking in its approach, and increase the range of alternatives to the more traditional, and expensive, cash- and cheque-based options. The company s specific goals were to: Expand the number of bill payment options available to its customers. Deliver a unique bill payment service that allowed its customers to pay via their smart phones. Deliver a bill payment solution that could also be used to pay bills at Barclays ATMs without a smart phone. Become the first utility in the UK to accept smart phone bill payments. Address the growing customer need to deliver up-to-date bill payment options using current technology. Severn Trent Water selected Barclays smartphone app, Barclays Pingit for corporates, allowing it to make and receive payments from its customers. The corporate functionality provides customers with an easy and convenient way to pay their bills, as an alternative to paying by cash, cheque or bank transfer simply by using their mobile phone. It has two offerings, enabling businesses to register for a unique Corporate ID and/or Quick Response (QR) code, which is linked to a corporate current account held with Barclays. Businesses can then include their Barclays Pingit Corporate ID or QR code on statements and invoices, allowing customers using the free Barclays Pingit app to simply enter the Corporate ID into their phone or scan the QR code to initiate a Faster Payment. Businesses will have the option to register for a standard Corporate ID or selfselect a Premium Corporate ID which can be defined within certain guidelines. The QR code offering enables businesses to generate QR codes with specific customers unique reference details defined by the business at the time of generation. Therefore when customers initiate a payment using the QR code, it carries all the required reference data to the business. Using Barclays Pingit offers customers a more efficient payment alternative by reducing costs associated with manual and paper-based processes. QR codes and availability of reference information will mean auto reconciliation which potentially enables speedier allocation of payment to the customer account and the Faster Payments mechanism is used, making payments effectively near real-time, explains Stephen Baseby, Deputy Treasurer. The implementation of QR codes coupled with the availability of Barclays Pingit provides bill payment solutions that answer the following key requirements: A payment solution that recognises the changing customer behaviour regarding payments and a growing demand for immediacy and accessibility. A secure payment mechanism that provides instant receipt of funds together with payment data to ensure straight through allocation. Broad appeal via ATM acceptance so that it is not just smartphone owners that will benefit from the solution. This ensured that Severn Trent Water was the first UK utility to accept bill payments via smart devices both phone and tablet. Its customers have given very positive feedback on the ease of use of the channel and the innovation that the solution has brought to the market. Since the launch of Barclays Pingit and the inclusion of QR codes on our customers water bills, we have received almost 3,000 payments approaching a value of almost 400,000, concludes Baseby. Reduced cost compared with traditional payment methods. Reduced time taken to process payments. Improved payment security. Live since August 2013, Severn Trent has seen a growing number of its customers switching to this payment channel from the more traditional and expensive cash- and cheque-based options. in partnership with treasurytoday Adam Smith Awards August

54 HIGHLY COMMENDED One to Watch Merz Pharma Group Karsten Kabas, Head of Corporate Treasury Karsten Kabas of Merz Pharma Group Merz is a privately held pharmaceuticals company involved in the research, development and sale of innovative drugs and medical products for clinical dermatology and neurological indications as well as for aesthetics medicine and metabolic disorders. The Merz Pharma Group employs 2,443 people worldwide (prior year: 2,389). The Company generated revenue of EUR million in fiscal year 2012/13 (prior year: EUR million). Merz wanted to improve efficiency and reduce the burden of manual tasks within its treasury. It sought to achieve this step by step through the implementation of an integrated technology architecture which was fit for purpose, required manageable development effort on its part, and could be deployed with minimal disruption. The Merz Treasury team responded to the challenge by implementing a fully integrated TMS. The new TMS interfaced directly with Merz s existing Bloomberg and SAP systems, and provided a range of functionalities including electronic dealing, electronic confirmation matching, and integrated straight through EMIR reporting. These functionalities were delivered while keeping system complexity comparably low and maintaining a tight control on the price-performance ratio. The integrated solution (Bloomberg Technosis ATAQ SAP) delivers a strategically developed treasury and finance IT landscape ready to meet Merz Pharma Group s current requirements as well as potential requirements in the future. The three strategic software partners offer the scope to provide even greater benefits in the future without adding additional partners. Therefore, it was extremely advantageous to keep IT, interface and process complexity as low as possible in the treasury department on a sustainable basis. The group s different treasury tasks (in place and prospective) were allocated to three strategic systems: Bloomberg: electronic dealing, research, analysis, pricing, news, alerts, data provider for Technosis ATAQ (Bloomberg data license), and electronic FX confirmation matching (this element has not been implemented yet but the project is underway). Technosis ATAQ: portfolio management (deals automatically enter from Bloomberg via two-way FIX-standardised interfaces), risk management (including counterparty risks), scenario analysis, treasury master data concentration, FX differentiated cash-flow planning, automated EMIR reporting, cash management, group bank account status, handling of all intercompany deals and transactions, and debt management. SAP ERP: a batch can be generated in Technosis ATAQ to deliver accounting transactions related to the treasury deals and a revaluation of assets and derivatives which are all managed in Technosis ATAQ. Specialty consultant firm Schwabe, Ley & Greiner supported the evaluation process of the TMS and helped to clearly identify the best fitting solution for Merz, including the price-performance ratio aspects. This successful approach shows how to strategically develop treasury IT infrastructure without handling a dozen or more software systems or partners. It combines continuous innovation and process optimisation and automation while keeping IT complexity comparably low. Without sacrificing any required or innovative aspects such as electronic confirmation matching, and straight through EMIR trade reporting our solution meets the demands of a fast-growing global mid-sized player like Merz where IT project capacities need to be used very efficiently and where we always have an eye on price-performance ratio aspects as well as keeping a streamlined head office, explains Karsten Kabas, Head of Corporate Treasury. The key benefits are the ability to carry out straight through processing, robust relief from manual tasks, flexible interfaces between the systems and a long-lasting treasury IT landscape which can be easily adapted to further requirements, concludes Kabas. Certainly one-to-watch, our judges point out. Cost savings. Time taken to implement the solution and realise benefits. Productivity gains. Process efficiencies. Satisfies evolving regulatory requirements, for example, Dodd-Frank and EMIR. 52 treasurytoday Adam Smith Awards August 2014

55 WINNER Middle East Regional Award for Best Practice Honeywell Ciar Timon, Senior Regional Treasury Manager Michael D'Anna of Standard Chartered and Ciar Timon of Honeywell Honeywell is a Fortune 100 diversified technology and manufacturing leader, serving customers worldwide with aerospace products and services; control technologies for buildings, homes and industry; turbochargers; and performance materials. Based in Morris Township, New Jersey, Honeywell s shares are traded on the New York, London, and Chicago stock exchanges. Honeywell, as part of its growth initiative in the Middle East, has targeted Iraq, where the rapidly expanding oil industry, which provides more than 90% of government revenue, is spearheading the Iraqi economic recovery. The use of cash, with all its inherent risks, is widespread in Iraq and the banking systems to support Honeywell in the country were inadequate or non-existent. Furthermore, the changing or inconsistent banking rules in Iraq, issued by either the Central Bank of Iraq or the Ministry of Finance, can often cause delay and confusion. Therefore, implementing banking facilities to the standard required meant that Honeywell EMEA Treasury needed to exercise an even higher level of agility than usual. The Trade Bank of Iraq (TBI), established in 2003, originally to finance trade deals and replace the oil-for-food programme, is owned by the Iraqi government but operates as a commercial bank with a virtual monopoly on letters of credit (LC s) for government purchases, which gives it a good deal of political leverage over the Iraqi government. Public sector imports are normally secured through LC s issued through TBI and, for smaller contracts (under $4 million), issued through selected private Iraqi banks. The TBI s processes are not robust it can take months for LC s to be processed through local banks. Our choices for a cash management bank in Iraq were rather limited, explains Ciar Timon, Senior Regional Treasury Manager. Until late 2013, the best option was an international bank with a local partner, and Honeywell s initial plan was to set up banking arrangements using the same structure as it had used for its Delaware company, but using Bank of Baghdad as the local bank instead of TBI. However, in June 2013, it was advised that Standard Chartered Bank (SCB) was opening branches in Iraq. We selected SCB as our partner bank and we are now in the process of opening bank accounts for both divisions of our Central Iraq legal entity and will shortly commence a similar exercise for the Erbil entity, says Timon. A new bank guarantee credit line of $80 million has been established with SCB, which has already obtained agreement from the Iraqi Ministries of Electricity and Oil to accept BGs issued directly by SCB. As for bank mandates, Honeywell s amendment instruction formats, already used in other Middle East countries, have been accepted by SCB, says Timon. It is evident that Honeywell Treasury s proactive support of the company s One Honeywell High Growth Regions strategy, and enthusiastic communication and co-operation between all involved parties, are key to the successful implementation of workable banking processes and Treasury s ongoing support of Honeywell s businesses in Iraq. Implementing the solution in a country like Iraq, which is still quite politically and economically unstable, has comparatively high transaction costs and which is one of the most complicated countries in the region for routing LC s, is quite an achievement. Cost savings: Honeywell s strong negotiating tactics have resulted in its obtaining the same pricing in Iraq as it has achieved in the UAE with BNP Paribas and HSBC for Iraq, this is a saving of over 70% on what the company was previously charged by TBI. Although it can negotiate neither elimination nor reduction of the regulatory 0.2% stamp duty applied across the board in Iraq, it has negotiated a 25% decrease on courier fees, which in Iraq can be expensive due to the risk posed by the political situation. Productivity gains: The setting up of an online bank guarantee solution which will save an estimated 100 hours per annum. Process efficiencies. Pricing enhancements. Risk removed and mitigated. in partnership with treasurytoday Adam Smith Awards August

56 HIGHLY COMMENDED Middle East Regional Award for Best Practice Abu Dhabi Health Services Company Bernhard Solleder, Director Group Finance and Business Development Rashed Al Qubaisi of Abu Dhabi Health Services Company collecting the Award on behalf of Bernhard Solleder and Howard Gaunt and Mohamed Al Ali of Abu Dhabi Commercial Bank The Abu Dhabi Health Services Company (SEHA) was established in 2007 with nearly 18,000 employees as part of the Abu Dhabi government s ongoing healthcare reforms programme. Its aim is to provide the UAE s citizens with local access to world-class healthcare facilities. SEHA has ten business entities (hospitals and centralised services) managing their own finance function. Each entity has four bank accounts, resulting in 40 accounts at a group level. As a result of our decentralised model and large number of bank accounts, it was difficult to achieve timely, accurate visibility of funds at a group level or consistency over financial processes, explains Bernhard Solleder, Director Group Finance and Business Development. All SEHA s cash and treasury processes, including payments, had been carried out on a manual basis. The minimum time for approving an invoice was ten days and there was no ability to track the status of a payment throughout its life cycle. Errors and late payments were therefore common, potentially damaging supplier relationships and increasing risk in its supply chain. To address these challenges, SEHA took the decision to automate its procure-to-pay process by developing a custom workflow in its ERP (Oracle) that would specifically meet its requirements. It would also integrate the solution with its banking partner, Abu Dhabi Commercial Bank (ADCB) via a real-time, host-to-host connection. New electronic payment files are now transmitted to ADCB s designated file location every 30 minutes. These are now retrieved and validated prior to execution, with prompt notification of acceptance or rejection, allowing the company to make any necessary corrections instantly and sending fresh files without compromising the value date. This approach was more cost-effective and less resource-intensive than implementing a specialist payments system, and allowed us to develop processes that met our needs more precisely. Furthermore, we were able to leverage ADCB s expertise in efficient payments processing, explains Mr Solleder. ADCB provided details on the required payment formats, including advice on encryption, in order to ensure accurate, robust and secure straight through processing. The implementation proceeded smoothly with a high-quality approach to project management, including extensive testing. This in turn increased user trust and confidence in the new solution, as well as processing accuracy. By designing a new workflow that met its needs exactly, SEHA has been able to achieve a high degree of acceptance by both internal staff and suppliers, whilst demonstrating industry best practices in process efficiency, security and resilience. The collaboration between SEHA and ADCB has resulted in one of the first custom-designed, automated payment processes in the region, leveraging industry best practices and applying them to address specific local financial requirements. As a result of this project, we are now in a position to implement further enhancements to our infrastructure, such as introducing an automated payroll processing solution, automated internal funds transfers and automated reconciliation. We are also considering implementing cash pooling solutions such zero-balancing accounts (ZBAs) which will enable us to have much greater visibility over our group cash position and optimise the utilisation of funds across the SEHA group, says Mr Solleder. Cost savings: $1.4m per annum. Environmental savings: Eliminated 288,000 pages per annum from its processes, significantly reducing its environmental footprint. Accelerated workflow: Reduced the invoice processing life cycle from ten to two days. Enhanced payments security: By encrypting Electronic Funds Transfer (EFT) files before transmitting them to the bank via the host-to-host (H2H) connection, SEHA is meeting industry standards for information security and safeguarding suppliers critical information such as banking details. Achieved information transparency: Payments are now tracked throughout the payment processing life cycle. Improved cash flow forecasting: By accelerating payments processing SEHA can position funds more accurately. Reduced supplier risk. Increased staff and patient satisfaction. 54 treasurytoday Adam Smith Awards August 2014 in partnership with

57 HIGHLY COMMENDED Middle East Regional Award for Best Practice The Boston Consulting Group Mark Salehar, Head of Finance Jo Woods of Boston Consulting Group collecting the Award on behalf of Mark Salehar and David McGowan of BNP Paribas The Boston Consulting Group is an international management consulting firm with more than 80 offices in 45 countries. It is one of the Big Three management consultants, and advises clients across the private, public, and not-for-profit sectors. Its clients include more than two-thirds of the Fortune 500. For The Boston Consulting Group (BCG), one of its main objectives was to gain access to all key instruments of cash management such as full payables, receivables solutions, salaries and cross-currency transactions, in an efficient and fully automated manner. It also wished to achieve control over and optimise the usage of cash balances across the group s three entities in the region. It wanted to minimise working capital needs by proactively managing occasional cash shortages, and leverage the value of liquidity across the group s three entities and multiple currencies without increasing complexity. These were directed to achieving BCG s broader aims of improving efficiency and visibility within the treasury function, while cutting down on costs by reducing banking fees and enhancing the use of working capital. BNP Paribas proposed a solution to provide BCG with cost efficiency and optimisation. This solution comprises three building blocks, of which the investment component is uniquely innovative in the Middle East: 1. Set up on Connexis, BNP Paribas s internal banking solution for managing and monitoring all the accounts and transactions. 2. Establish a same-currency cash concentration solution consolidating all the excess cash in Dubai via an automated sweeping mechanism. 3. Maximise the yield of the liquid portion of the idle cash using a cross-border balance optimisation and earning credit rate (ECR) liquidity solution, an overnight-based solution that leverages the value of the liquidity to provide a rebate against the cash management fees. The solution offered to BCG in the Middle East has addressed the challenge to integrate daily management of all transactions and accounts, bringing innovation to all three levels of liquidity management. On physical liquidity management, for the first time, our Saudi Arabian entity could be integrated to the rest of the region within a fully automated regional cash pooling structure, explains Mark Salehar, Head of Finance. In terms of notional liquidity management, cross-border balance optimisation offers the best rewards when a corporate s accounts have frictional cash spread across several geographies and currencies, while providing the added benefit of avoiding the commingling of cash balances. Meanwhile, on the investment solutions side, the liquidity management structure has been seamlessly integrated with the ECR solution. This is a soft-dollar credit interest rate granted to clients on balances and used to offset cash management fees. Hence the ECR allows a more simplified billing process and reduces BCG s cost base. Innovation: The originality of this innovation lies in the application of the ECR in the Middle East, a solution which has only traditionally been used in the US. However, it also differentiates itself in that it can be combined with the cross-border balance optimisation and the cash pool exercise. BCG is embracing the unique opportunity offered by its bank to leverage a modern and innovative methodology in liquidity management. Liquidity management has been a rather underdeveloped aspect of flow banking in the Middle East until now, while the liberal regulatory, legal and tax environment, combined with the positive effects of the currency peg to the USD, could actually be conducive to great efficiencies and savings. BCG supported its bank by being one of the first clients to embrace this family of solutions, and indirectly contributed to elevating the treasury function to a higher level, concludes Salehar. Efficiency, control, visibility and ease of monitoring through the Connexis cash platform. Cost savings through working capital management and optimised liquidity management; combination of traditional cash pooling solutions. Cross-border balance optimisation and earning credit rate deliver additional options to reduce banking fees while keeping account balances visible and fully liquid. Ability to manage optimization of cash flows in multiple currencies. Simplified transaction banking services. in partnership with treasurytoday Adam Smith Awards August

58 2014 Adam Smith Awards winners Vanita Aggarwal Vanita Aggarwal leads Treasury Risk management at TFS. She has spearheaded several award-winning initiatives in Treasury and Finance: Funds Transfer Pricing (FTP), liquidity, ALM, valuations, technology solutions, RAROC and decentralised pricing decisions. She holds an engineering degree from Delhi University, a Masters from University of Toronto and is a CFA charter holder. Eric Barka Eric Barka is a Treasury Manager at Microsoft Corporation and is responsible for overseeing collateral management, derivatives settlements, strategic investment operations and portfolio management systems data integrity. Over the past few years Barka has been responsible for Microsoft s US Dodd-Frank OTC clearing initiatives and is now focusing on EMIR compliance and reporting requirements. Edward Barrie Edward Barrie is Assistant Treasurer for Itron. Barrie is responsible for global FX management, treasury systems, regional cash management and payment strategies and processes for APAC and the Americas, intercompany lending, and banking administration. He has a BA in Economics from Eastern Washington University. Marco Bigatti Marco Bigatti is Finance Director at Luxottica Group. He joined the Group in 2005, with main responsibilities in corporate finance, debt capital market, financial risk management, cash flow management and relations with rating agencies. Before joining the Luxottica Group he held leading finance positions in sports retailer, DECATHLON and ALIGROUP, the worldwide leader in manufacturing food service equipment. Alex Blackmur Alex Blackmur is a part of Microsoft s fixed Income team managing the short-term cash portfolio, global bond portfolio and is the regional economic expert for Europe. Prior to his current role he spent five years managing FX risk across the company. Blackmur completed his BBA from the University of Texas, Austin and is a CFA charterholder. Anna Blasco Anna Blasco is FX and Treasury Manager at Hotelbeds, a wholly owned subsidiary of TUI Travel PLC. She has a BA (Hons) in Accounting and Finance and master s degrees in Financial Markets and in Project Management. She worked in the asset management division of a Spanish bank before moving to corporate treasury. Franz Bramböck Franz Bramböck joined TYROLIT in March 2009 as Treasurer and has global responsibility for all operative treasury activities. He began his professional career as a risk manager within the Erste Bank Group. Bramböck studied international business studies in Austria and Hong Kong and holds a master s degree in corporate finance. Jayna Bundy As Group Manager at Microsoft, Jayna Bundy is responsible for global cash operations. She also leads the investment operations for Microsoft s $90 billion investment and foreign exchange portfolios. Jayna s areas of focus include optimisation of Microsoft s bank account structure, driving straight through processing and risk management through automation and business intelligence. Carolyn Bywater Carolyn Bywater started her career as an office junior in a Management Accounting department, processing to be a qualified accountant (ACMA, CGMA) but over the last six years has been working in the Shared Services Function managing Payroll, Accounts Payable and Receivable and more recently HR and Procurement Administration. Mike Cassidy Mike Cassidy is Corporate Treasury Director, EMEA for Wyndham Worldwide Corporation based in London. Previous senior roles within the sector included Treasury Director at ebookers and Treasurer of Le Meridien Hotels and Resorts. Cassidy graduated from Aston University and is a Chartered Management Accountant and a Member of the ACT. 56 treasurytoday Adam Smith Awards August 2014

59 David Calabria David Calabria is Chief Accounting Officer for Avis Budget Group, previously serving as VP/Assistant Treasurer since Prior to that, he spent six years as Vice President, ABS Conduit Administration at J.P. MorganChase and two years in accounting with PriceWaterhouseCoopers. A CPA, he holds a Bachelor of Business Administration from Notre Dame. Giancarlo Cicuttini Giancarlo Cicuttini was born in Bergamo, Italy. He graduated in business administration and is Group Treasury and Credit Manager at Brembo, the world leader of disc brake technology. He manages treasury, finance and credit management for the Group (in particular global bank relationship, group funding, cash and treasury management, financial risk management, IAS 32-39, Ifrs 7, DSO, Ageing, credit rating analysis). Alan Chitty Alan Chitty has been Group Treasury Controller at SABMiller for two years. Before settling in treasury, he worked in external audit, internal audit, corporate accounting, and IFRS technical accounting. Before joining SABMiller as part of the successful Project Griffin team, Chitty was Treasury Operations Manager at Anglo American. Jamie Christel As Treasury Manager at Microsoft, Jamie Christel is responsible for global cash positioning, FX settlements, and wire processing as part of the cash operations group. She is focused on driving operational excellence through incorporating best practices and straight through processing initiatives. Jennifer Cleary Jennifer Cleary is a Certified Accountant and joined Pfizer in 1995, prior to which she worked in the Public Sector. She has worked in a financial reporting role and managed the regulatory reporting for Pfizer s Bank. She is currently Compliance Manger for Pfizer Dublin Treasury Centre, based in Dublin. Michelle Christensen Michelle Christensen is a member of Microsoft s Capital Markets Team. She focuses on fixed income markets and is currently managing Agency Mortgages, CMBs and ABS. Christensen completed her BA from Whitman College and is a CFA charterholder. Joel Combs Joel Combs is Director of Corporate Finance and Investments. His responsibilities include returning capital to shareholders through share repurchase and dividend programmes, debt and commercial paper issuance, and the management of the strategic corporate and structured investment portfolios. Combs completed his BBA from the University of Washington and is a CFA charterholder. John Coon John Coon is the Global Cash Manager at Dow Corning Corporation. He joined Dow Corning s Treasury Group in Coon was previously Treasury Manager for North America at Whirlpool Corporation. He has a Finance degree from Central Michigan University, an MBA from Western Michigan University, and the Certified Treasury Professional certification. Neil Desai Neil Desai is a Director in Pfizer s Treasury department and is responsible for managing Pfizer s investment portfolio as well as rates, currencies, and commodity hedging, liability management, working capital solutions, and share repurchases. Prior to joining Pfizer, Desai was a bond trader at Barclays Capital. He holds a B.S. and M.Eng in Computer Science and Electrical Engineering from MIT. Steffen Diel Steffen Diel is Head of Treasury Finance, within SAP AG s Global Treasury organisation, responsible for capital market topics, global financial risk management, external funding, bank relationship management, treasury-related reporting, subsidiary service and group-wide planning of financial income. He has a degree in International Business Administration from the Worms University of Applied Sciences. treasurytoday Adam Smith Awards August

60 2014 Adam Smith Awards winners Giuseppe Rossi-Espagnet Giuseppe Rossi-Espagnet is EMEA Regional Cash Manager at Eli Lilly and led its Regional Banking project in EMEA, which in less than three years regionalised banking relationships in 68 countries globally (43 in EMEA) and acted as a key enabler for SSC operations. Prior to this, he was Eli Lilly s Global Credit Manager and formerly CFO of Eli Lilly s Swiss affiliate. Rossi-Espagnet is a Six Sigma Black Belt and holds an MBA from Emory University. Keith Fernandez Keith Fernandez is the founder and CEO of Destinations of the World (DOTW), the leading global travel wholesaler based in Dubai. Fernandez began his travel career in 1978 with Pan American Airways, before joining Thomas Cook in In 1993, Fernandez founded DOTW and in 2004 he led a buyout of the company, becoming the founder and principal shareholder. Pankaj Gudimella Pankaj Gudimella works as a senior manager in Microsoft Treasury. He has experience in credit management, cash operations, business intelligence and analytics at Microsoft. Michael Hamilton Michael Hamilton is Principal Pharmacist and Client Engagement Manager for the NHS Business Services Authority. He joined the NHS in 2000, having spent the previous 20 years in the community pharmacy sector. He is registered with the General Pharmaceutical Council and a member of the Royal Pharmaceutical Society. Chris Hanson Chris Hanson is Director, Assistant Treasurer at Brocade responsible for managing treasury, risk and stock administration. He has over 15 years of treasury management experience, leading treasury to contribute to the company s bottom line. Through his leadership Brocade treasury has been recognised by multiple industry awards for innovation and best practices. Simon Holt Simon is the Chief Financial Officer of WorleyParsons and has overall responsibility of the company s finance function. He previously held the roles of Deputy CFO and Group Financial Controller. Holt is a Chartered Accountant and holds a degree in Business (Accounting and Marketing) from the University of Technology, Sydney. Mark Hopkins Mark Hopkins is a Director, Portfolio Risk Management, and is responsible for managing and optimizing Pfizer s Corporate Cash portfolio and leading the Front-Office group, based in the Dublin Treasury Center (DTC). Mark holds an MBA in Finance from Thunderbird and he is also a CFA Charterholder. Tom Jack Tom Jack, Assistant Treasurer of Mondel ez International has headed up their global treasury operations centre in Switzerland since late Prior to this role Jack was Director of Treasury at Cadbury Plc. He has over 25 years treasury experience gained in a wide range of business sectors. Jack studied engineering at Leeds University and is a Fellow of the ACT and the ICAEW. Yun Kong Yun Kong is the Manager, FX and Treasury Operations at Brocade. She led the transformation of Brocade s FX hedging programmes and has been driving process improvement in the cash management, global payments and bank connectivity initiatives. Her works have been recognised by multiple industry awards for innovation and best practices. Ragnar Lodén Ragnar Lodén heads the Corporate Finance Unit within Group Treasury at Ericsson. He is responsible for Corporate Finance, Cash Management and Working Capital Management. Prior to his current role, Lodén has held a number of positions within Finance. Before Lodén joined Group Treasury in 2002, he was working as a Business Controller based in Prague. 58 treasurytoday Adam Smith Awards August 2014

61 Margaret McDonnell Margaret McDonnell joined Pfizer in 1996 and has worked in various capacities in treasury. She is currently managing Treasury Operations located in the Dublin Treasury Centre, Dublin 4, Ireland, prior to which she worked in treasury with Bank of America/Merrill Lynch. She studied Sociology and Social Policy in University College Dublin, Ireland followed by a Post Grad in Business with Michael Smurfit Graduate School of Business, Dublin, Ireland. Gerard McGinnity Gerard McGinnity is Deputy Treasurer of Omnicom Financial Services, Limited. Formerly Group Treasurer of Eircom, the leading Irish telecommunications company, he has worked as a Treasury consultant and began his career in the National Treasury. A former President of the Irish Association of Corporate Treasurers, he holds a Master s degree in Economics. Barry McKernan Barry McKernan joined Pfizer in 2013 with responsibility for the credit analysis of Pfizer s investment portfolio. Prior to joining Pfizer, McKernan held positions in both credit and equity analysis in the investment sector. McKernan is a CFA charterholder. Regan Nanbara Regan Nanbara is Director, US Cash Management in the treasury department at Intel Corporation. Regan s 22-year career with Intel Treasury began in Japan and he is currently back in the California head office after a three year assignment in the UK. Anita Prasad Anita Prasad is responsible for corporate finance, capital structure, share buybacks and dividend policy, structured investments, global cash and liquidity, treasury operations, and credit services for MS online businesses. Previously Prasad was Vice President of Treasury and Tax at LSI Logic Corporation. Prasad was an Assistant Professor at the University of Wisconsin, Milwaukee and holds a Bachelors and Masters in Economics, an MBA in MIS, and a PhD in Finance and International Business. Mark Salehar Mark Salehar is Head of Finance for the Middle East operations of Boston Consulting Group, which encompasses three offices across the GCC. Previously he was COO at Jones Lang LaSalle-MENA based in Dubai after eight years in the corporate headquarters in Chicago. Salehar holds a B.A. in Accounting and an MBA with a focus on financial control from DePaul University in Chicago and is currently pursuing doctoral studies in organizational development and change management from Colorado Tech in Denver. Martin Schlageter Martin Schlageter joined the German entity of the Roche Group as Head of Treasury in In 1998 he became European Head of Cash and Credit Management in Switzerland for the Vitamins Division where he built up a Shared Service Center in this area. After the divestment of the Vitamins Division in 2004 he joined Roche s Group Treasury as Head of Treasury Operations where he implemented and manages Roche s in-house bank. Amit Singh Amit is an engineer by background. He received a MS degree in Petroleum Engineering from University of Kansas and an MBA from the Wharton School. Singh currently manages Pfizer s $45B+ cash investment portfolio for interest rate, credit and currency risk. His mandate also includes managing Pfizer s short term liquidity needs and Pfizer s working capital strategies. Bernhard Solleder Bernhard Solleder is the Director Group Finance and Business Development at Abu Dhabi Health Services Co. (SEHA), the largest healthcare provider in the United Arab Emirates. Before joining SEHA, Solleder was heading the Corporate Finance and Advisory business of Emirates Bank in Dubai. Prior to coming to the Middle East, he held several senior positions in corporate finance at UniCredit Group and Deutsche Bank in Frankfurt and London. Adam Stam Adam Stam is Manager, Structured Finance at Toyota Financial Services. He manages TFS s annual term funding programme of approximately $20 billion consisting of unsecured debt and asset-backed securitisations. Stam earned a BA from Grinnell College and an MBA from the University of Pennsylvania. He is a Chartered Financial Analyst. treasurytoday Adam Smith Awards August

62 2014 Adam Smith Awards winners Ricky Thirion Ricky Thirion oversees the Group Treasury of Etihad Airways, responsible for the treasury, corporate finance and insurance functions. He holds an MBA and Masters Degree in Engineering, was voted Global Corporate Treasurer of the Year 2010 and is an Honorary Fellow of the ACT (UK). David Walton David Walton is Head of Financial Accounting and Reporting for the NHSBSA where he was worked since Prior to this he spent several years auditing public sector organisations following a lengthy spell in private accountancy practice. He is a Fellow of the Association of Chartered Certified Accountants. Susan Webb Susan Webb joined Pfizer in 1991 and has been managing director of Pfizer s global treasury centre based in Dublin since Prior to this she worked in various capacities for Pfizer in Dublin focusing on finance, treasury and technology. She is a fellow of the Institute of Chartered Accountants in Ireland and a member of the Irish Association of Corporate Treasurers. Alex Zimmerman Alex Zimmerman is a Senior Manager in Pfizer s Corporate Treasury. Zimmerman is responsible for the North America region along with the US cash position, short-term investments/debt, and bank relationship management. Prior to joining Pfizer in 2008, Zimmerman was a Captain in the US Army with the 10 th Mountain Division and served in Iraq and Afghanistan, awarded the Bronze Star Medal and Combat Action Badge. He has a MBA from Fordham University and Bachelor s degree from Clarkson University. George Zinn As Corporate Vice President and Treasurer for Microsoft, George Zinn is responsible for investing and managing over $50 billion of the company s corporate assets. He leads a group which manages the company s worldwide financial and corporate risk, investment portfolio, strategic portfolio, foreign exchange, corporate and structured project finance, dilution management, cash and liquidity, customer financing and collection activities.

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