Hardest Job In Finance V1


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Hardest Job In Finance V1

  1. 1. Corporate Foreign Exchange Management The Hardest Job in Finance!
  2. 2. Topics to be Discussed Today <ul><li>Panel Introduction & Opening Comments </li></ul><ul><li>Corporate Foreign Exchange Management </li></ul><ul><li>(What makes it so hard?) </li></ul><ul><li>Risk Factors </li></ul><ul><li>(What should you be concerned about?) </li></ul><ul><li>Best Practices </li></ul><ul><li>(Is there a better way?) </li></ul><ul><li>Questions from the Audience </li></ul><ul><li>How to Get Started </li></ul>Copyright 2007 Rim Tec Inc. Slide 2
  3. 3. Panel Speaker Introductions <ul><li>John Connors </li></ul><ul><ul><li>Partner at Ignition Partners </li></ul></ul><ul><ul><li>John spent sixteen years at Microsoft Corporation in several strategic roles. </li></ul></ul><ul><ul><ul><li>2000 to 2005 SVP of Finance and Administration and CFO </li></ul></ul></ul><ul><ul><ul><li>Previous positions included VP of Enterprise Group and Corporate Controller </li></ul></ul></ul><ul><ul><li>Serves on the Board of Directors for Nike, BioPassword, Second Space, Jobster, Xensource and FiREapps </li></ul></ul><ul><li>Wolfgang Koester </li></ul><ul><ul><li>CEO of FiREapps </li></ul></ul><ul><ul><li>Former CEO of GFTA Trendanalysen, a quantitative currency management firm. He has managed risk for a broad range of companies as well as governments, including G-10s, since 1986 </li></ul></ul><ul><li>Corey Edens </li></ul><ul><ul><li>Chief Product Officer FiREapps </li></ul></ul><ul><ul><li>Formerly the President of Valcon Distributing, Controller for Microsoft Networks, and an Auditor for Deloitte Haskins and Sells </li></ul></ul>Copyright 2007 Rim Tec Inc. Slide 3
  4. 4. A Fragmented Cross-Functional Process <ul><li>Corporate Controller </li></ul><ul><li>A/P </li></ul><ul><li>A/R </li></ul><ul><li>Intercompany </li></ul><ul><li>Treasurer </li></ul><ul><li>Cash Management </li></ul><ul><li>I/C Settlement </li></ul><ul><li>Tax </li></ul><ul><li>Repatriation </li></ul><ul><li>I/C Loans </li></ul><ul><li>Transfer Pricing </li></ul><ul><li>Regional Controller </li></ul><ul><li>A/P </li></ul><ul><li>A/R </li></ul><ul><li>Intercompany </li></ul>Foreign Exchange Manager Banks Resource & Time Intensive Inaccurate Exposures Unnecessary Cost & Risk Copyright 2007 Rim Tec Inc. Slide 4
  5. 5. The Old Way of Managing Foreign Exchange 5 Copyright 2007 Rim Tec Inc. Slide 5
  6. 6. Survey: What Makes Foreign Exchange Exposure Mgmt So Hard? Data Integrity ERP Landscape Complex Spreadsheets Currency Volatility Complex Derivatives Tax Implications Cash Management Intercompany Payments Policy Compliance Global Coordination Inaccurate Exposures Unnecessary Transactions Poor Resource Utilization Earnings Volatility Increased Audits Market Risk Non Compliance Unnecessary Costs Business Impact Challenges Foreign Exchange Manager Copyright 2007 Rim Tec Inc. Slide 6
  7. 7. Foreign Exchange Exposure Management Operational Challenges Create Economic and Compliance Risk Compliance Economic Risk Factors Economic Compliance Operational <ul><li>FAS 52 </li></ul><ul><li>FAS 133 </li></ul><ul><li>SOX </li></ul><ul><li>Earnings Volatility </li></ul><ul><li>Unnecessary Costs </li></ul><ul><li>Turnover </li></ul><ul><li>Lack of Skilled Resources </li></ul><ul><li>Manually Intensive Process </li></ul>Copyright 2007 Rim Tec Inc. Slide 7
  8. 8. Cornerstones of Foreign Exchange Best Practices <ul><li>A holistic/enterprise-wide approach </li></ul><ul><li>Top down management support </li></ul><ul><li>Understand the currency exposures well </li></ul><ul><ul><li>data integrity </li></ul></ul><ul><ul><li>system set up </li></ul></ul><ul><ul><li>measurement </li></ul></ul><ul><ul><li>transparency </li></ul></ul><ul><li>Sound foreign exchange processes and responsibility </li></ul><ul><li>Communication </li></ul><ul><li>Leverage the power of automated, on-demand solutions </li></ul>Copyright 2007 Rim Tec Inc. Slide 8
  9. 9. Foreign Exchange Exposure Management Value Chain Pre -Trade Trade Post-Trade Aggregate Exposures Analyze Exposures Decide Actions Select Instrument Price Execute Trade Confirm Trade Settle Trade FiRE apps Banks / Inv. Banks Treasury & Accounting Systems Account for Trade Copyright 2007 Rim Tec Inc. Slide 9
  10. 10. Keys to Success: Process, People, and Systems Foreign Exchange Exposure Management Platform Exposure Analytics Decision Management Data Integrity Exposure Measurement Policy Based Decisions Internal Banking Logic Optimization Centralized, Disciplined and Timely Process Transparency, Auditability, and Compliance Copyright 2007 Rim Tec Inc. Slide 10
  11. 11. Holistic Exposure Management Process <ul><li>Corporate Controller </li></ul><ul><li>A/P </li></ul><ul><li>A/R </li></ul><ul><li>Inter-Company </li></ul><ul><li>Treasurer </li></ul><ul><li>Cash Management </li></ul><ul><li>I/C Settlement </li></ul><ul><li>Tax </li></ul><ul><li>Repatriation </li></ul><ul><li>I/C Loans </li></ul><ul><li>Transfer Pricing </li></ul><ul><li>Regional Controller </li></ul><ul><li>A/P </li></ul><ul><li>A/R </li></ul><ul><li>Inter-Company </li></ul>Centralized FX Mgmt Platform Timely Disciplined Process Global Coordination Foreign Exchange Manager Copyright 2007 Rim Tec Inc. Slide 11
  12. 12. Transform Risk Factors into Value Drivers <ul><li>Accurate FX Exposures </li></ul><ul><li>Auditable Processes </li></ul><ul><li>Risk Mgmt Policy Compliance </li></ul><ul><li>Decrease Earnings Volatility </li></ul><ul><li>Reduce Transaction Size and Volume </li></ul><ul><li>Exposure Analysts </li></ul><ul><li>Focus on Value Add </li></ul><ul><li>Global Coordination </li></ul>Value Drivers Operational Compliance Economic Copyright 2007 Rim Tec Inc. Slide 12
  13. 13. Start Your Journey to Foreign Exchange Best Practices <ul><li>Best Practices Whitepaper: </li></ul><ul><ul><li>Mailed to webinar attendees </li></ul></ul><ul><ul><li>Link will be sent early next week </li></ul></ul><ul><li>Contact FiREapps to schedule a 15 minute FX Health Check: </li></ul><ul><ul><li>Call +1.866.928.FIRE (3473) </li></ul></ul><ul><ul><li>www.fireapps.com </li></ul></ul>Copyright 2007 Rim Tec Inc. Slide 13
  14. 14. Thank You for Your Time