what-your-treasury-system-must-do-to-cope-with-the-next-crisis

Treasury Hot TopicWhat your treasury system must do to cope with the next crisis
www.pwc.com
Thomas Jerolitsch, SunGard
Hans Candries, PwC
Gunter Geysens, PwC

Agenda
2
februari 2011
Background
Sungard’s perspective on what your Treasury System must do to cope with the next crisis.

The crisis and its effects has led Treasury to consider lessons learned and set its agenda accordingly.
3
februari 2011
Background
What challenges did the crisis pose for Treasury?
Liquidity crunch, commodity & FX volatility, counterparty risk, accounting “fair valuation”
What challenges did the crisis pose for Treasury?
Liquidity crunch, commodity & FX volatility, counterparty risk, accounting “fair valuation”
Were we prepared?
Some were, some weren’t.
Few had all risk areas adequately covered.
Were we prepared?
Some were, some weren’t.
Few had all risk areas adequately covered.
What are the long-term Lessons learned?
“Best Practice” still holds true.
What do we need to do to implement it in a sustainable way and “make the change stick?”
What are the long-term Lessons learned?
“Best Practice” still holds true.
What do we need to do to implement it in a sustainable way and “make the change stick?”
What did we change during the crisis?
Many quick fixes “just to survive”
Opportunity for treasury to shine
What did we change during the crisis?
Many quick fixes “just to survive”
Opportunity for treasury to shine

Liquidity and risk are now at the top of the Treasurer’s agenda – systems are seen as a key enabler.
4
februari 2011
Background
Key Issues for Treasuries - Source PwC Global Treasury Survey 2010

Against the backdrop of increased demands on Treasury, the current technology environment at many companies is lacking.
Over-reliance on Excel or manual work-around – Many Treasury organizations utilize a patchwork of systems with limited automated interfaces requiring manual intervention and work-arounds mitigating the benefits of the technology.
Sub-optimal use of existing technology – Many companies have historically made poor decisions in technology selection and/or implemented the technology in such a way as to not take advantage of the functional capabilities of the systems.
Systems often require information not available – A functioning Treasury usually will need information from outside sources, or information that is not readily available. Even with better integration tools, turning data into useable information is always a challenge in most environments.
Performance management Treasury dashboards – Performance reporting is not usually a core function of Treasury systems and management dashboards are still in their infancy.
Commodities – Functionality is limited in most systems for commodities and information for valuation is sometimes not readily available.
5
februari 2011
Background

Therefore, many companies are looking to improved technology as a key enabler to meeting their treasury objectives.
6
februari 2011
Background

Agenda
7
februari 2011
Background
Sungard’s perspective on what your Treasury System must do to cope with the next crisis.

What your Treasury System must do to cope with the next Crisis.
Thomas Jerolitsch
24/02/2011

Agenda
Introduction
Working across the EcoSystem
Cash and Liquidity Management
Receivables
Payments
Risk Management
Additional Services
Summary

Introduction
When talking about crisis, what do we think we need to do…
Identification of Cash and Risk
Cashflow Forecasting
Operational Efficiency and Control
Investment Performance and Risk
Treasury Resourcing
Bank Relationships
Value of Centralization

Optimize Receivables, Treasury and Payments
Foster Collaboration between Trading Partners
Provide Market-neutral and Vendor-neutral Trading Platform
Communicate from Receivables, Treasury & Payment Solutions as well as ERP and in-house banking systems.

Identification of Cash
Interfaces to banks
Global
End of Day / Intra Day
Real time cash information
Investments / Funding
Cashflow Forecasting
Collection of Forecasting Data
Integration of Subsidiaries
Consolidation process
Global Cash / Liquidity position
Access to Money Market and FX Portals

A practitioner’s view…
“SunGard helps us determine our daily cash position early in the day, allowing us to take advantage
of prime market rates for investing and borrowing.’’
Joann Protopapa
Manager - Treasury,
H. J. Heinz Finance Company
Treasury Management
…the role of the Treasurer is changing, there are increased regulations and more demand for control…
SunGard helped…
Gain Visibility for Decision Making
Provide Scenario Analysis
Improve Bank Connectivity
Reconcile Cash and Transactions

Market viewpoint
“While treasurers have always been closely involved with ensuring the day-to-day liquidity of the company, their ability to influence the different elements in the financial supply chain is gradually increasing. “

Receivables
Optimize Cashflow
Mitigate Bad Debt Expense
Consistent and structured processes & workflows
Foster Connectivity across the EcoSystem

Receivables
A practitioner’s view…
“With SunGard, our DSO went from 60 to 55 days, while we watched our industry climb to 70.”
Jerry Drake
VP Financial Services
Viracon
Receivables Management
…treatment of trade receivables is as an important measure of a company's financial health…
SunGard helped…
Mitigate Corporate Credit Risk
Lower DSO
Reduce Past Due A/R
Decrease Manual Processing

Payments: Challenges
Business Challenges
Multiple banks & multiple cash management services
End of day & intraday
Risk compliance
Technology Challenges
Separate connections to each bank
Complex to manage
Costly to maintain
Unreliability
Lack of portability

Payments: Corporate to banks communication
Receivables
1
Treasury
SSB
2
DATA MANAGEMENT
INTEGRATION
SSB
FINANCIAL MESSAGING
Payments
NORMALIZE
TRANSFORM
MONITOR
SSB
3
ERPIn-house Systems

Payments
A practitioner's view…
Payments Processing
…many corporations rely on a fragmented approach to payments – lacking infrastructure, connectivity and control…
SunGard helped…
Harmonize Payment Flows
Establish Business Rules / Workflow
Utilize Least Cost Routing
Execute in Any Format
EXECUTE PAYMENTS FROM ANY SYSTEM AND IN ANY FORMAT AND IN ANY CURRENCY

Risk Management
Measuring Market Risk
Adjusting valuations for counterparty Risk
Exchange traded vs. OTC instruments
Measuring Counterparty Risk
Creation of visibility
Definition of limit policies
Real or Near time monitoring
Mitigation of Credit Risk through Receivables Management
Balance Sheet Exposure management

Additional Services
Executed Trades
Summary Level Hedge Data
Better Data Better Decisions
Treasury
Workstation
Trading
Platform
FX Trades to be Executed
Aggregate Analyze Decide
“With FiREappswe are confident of our ability to manage FX risk, regardless of the complexity of our business, or the prevailing market conditions.”
Kristen L. Magnuson, Executive Vice President and CFO
JDA Software

Additional Services
Corporate-Bank
Services
Electronic Bank Account Management (eBAM) Q4 2010 Interface from your Payments & Treasury solutions (with SWIFT inside) to manage bank accounts (opening, closing, signatories …)
Bank Account Statement Portal Q2 2011Manages bank accounts for account statement receipt, performs validity checks, creates dashboard and reporting
Bank Fee AnalysisQ2 2011Track and manage bank fees from your Payments & Treasury solutions (with SWIFT inside).
Ongoing development & delivery of additional services for Corporate-Bank, Corporate-Corporate and Corporate-Trading Partner Communications

Summary
Treasury can influence different elements of the financial supply chain
Looking at the financial EcoSystem
Cash Management
Receivables
Payments
Risk Management
Additional Services
Software as a Service (SaaS)

Questions?

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