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Making the Business Case for Treasury Technology
 

Making the Business Case for Treasury Technology

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In this 1 hour webinar, the speaker panel discussed the best practices corporate treasury teams use to justify the investment in treasury technology.

In this 1 hour webinar, the speaker panel discussed the best practices corporate treasury teams use to justify the investment in treasury technology.

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    Making the Business Case for Treasury Technology Making the Business Case for Treasury Technology Presentation Transcript

    • © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 1Tim JohnsonDirector of FinanceGarmin International, Inc.Dory MaloufTreasury Cash Operations ManagerPulteGroup, Inc.Bob StarkVice President, StrategyKyriba Corporationbstark@kyriba.comIntroductionsToday’s PresentersTim joined Garmin International as Assistant Treasurer on Halloween, 2005. Tim’sresponsibilities at Garmin include global risk management, treasury management,and overseeing U.S. and global income tax concerns. Tim implemented Kyriba in2011. Tim graduated from the University of Kansas with a Bachelors degree inAccounting and Business Administration and is a CPA. Previous positions includeworking at a public accounting firm, working as an Accounting Manager andController at companies in the K.C. area.Dory Malouf is a Treasury Cash Operations Manager at Pulte Group Inc. with aprofessionally recognized career. His team’s accomplishments in treasurytechnology and process improvement have been featured multiple times inTreasury and Risk Magazine and various AFP periodicals and books. Dory has aproven track record in adding value to an organization through processimprovement and treasury technology.Bob Stark is responsible for global product strategy and market development atKyriba. Bob is a 15-year veteran in the treasury technology industry having servedin multiple roles at Wall Street Systems, Thomson Reuters, and Selkirk FinancialTechnologies including product management and strategy. Bob is a regular guestspeaker at treasury conferences and an active member of the Association forFinancial Professionals.
    • © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 21) Today’s environment: what types of business cases?2) Where are the benefits?• Productivity• Financial Controls• Visibility• More effective financial decisions3) Focus: PulteGroup4) Focus: Garmin International5) SummaryAgendaTopics for discussion
    • © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 3What is the main reason for not implementingnew treasury technology?a) We already have a TMSb) Excel is the perfect solutionc) Unclear on ROId) On the path to building a business casee) Asked, but was turned downAudience Question
    • © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 4Today’s environment• Building a business case can be formal or informal• Executive approval almost always needed• Budget isn’t just “handed out” Even if informal, justification often has to bepresented (the “office suite” of applications)• Justification often involves a mix of quantitativeand qualitative benefitsBuilding a Business Case
    • © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 5ProductivityFinancial controlsGlobal visibilityEffective financial decisionsValue Creation HierarchySingle point of data entry• Eliminate re-keying errors• Improve accuracy andconfidence in analysisAutomate repetitive tasks• Shift time from processing toanalyzing• Achieve results more quicklyStreamline reporting• Automate and schedulepreparation and distributionTreasury as a strategic partner
    • © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 6ProductivityFinancial controlsGlobal visibilityEffective financial decisionsValue Creation HierarchyExamplesStreamlining of payments process- 50 hours / month (25% )Consolidating Cash Forecast- 80 hours / month (50% )Automating GL Entries- 4 hours / day (50% )Multi-bank reporting- 2 hours / day (25% )Treasury as a strategic partnerProductivity = X Annual FTE CostHours saved8 Hours per day
    • © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 7Improve data integrity• Eliminate reliance on ‘super’spreadsheets• Standardize processes andproceduresControlled workflow• Separation of duties• Reduce SOX audit costsCentralized audit trails• Improve visibility andtransparency• Better control of workflowProductivityFinancial controlsGlobal visibilityEffective financial decisionsTreasury as a strategic partnerValue Creation Hierarchy
    • © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 8ProductivityFinancial controlsGlobal visibilityEffective financial decisionsTreasury as a strategic partnerValue Creation HierarchyExamplesNot as easy to quantify!!Reduce SOX Audit Costs- 50% reduction in time takenReduced likelihood of fraud- Cost of fraudulent payment orbank account- Previous % of event occurringReduced likelihood of errors- Cost of error (e.g. brokenformulae, ‘extra’ zero, duplicatepayment)- Previous % of event occurring
    • © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 9ProductivityFinancial controlsGlobal visibilityEffective financial decisionsCash• Bank reporting• Cash positioning• Forecasting• LiquidityFinancial positions• Investment• Debt• Intercompany• Foreign exchangeExposures• Foreign exchange• Interest rate• Counterparty• Supply chainTreasury as a strategic partnerValue Creation Hierarchy
    • © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 10ProductivityFinancial controlsGlobal visibilityEffective financial decisionsTreasury as a strategic partnerValue Creation HierarchyExamplesValue of visibility is generallyin the decisions it enablesBank Account Optimization- Visibility into bank accounts- Visibility into bank fees- Visibility into bank reporting= cost/benefit of bank accountsIdentifying idle pockets of cash- Visibility into bank reporting- Can find balances didn’t knowyou had (or balances higherthan realized)- More likely for decentralized
    • © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 11ProductivityFinancial controlsGlobal visibilityEffective financial decisionsExcess cash and liquidity• Strategic investing• Debt repayment• Supplier discountsTreasury movement/analysis• Bank Fee Analysis• Search for liquidity• Netting• Optimal funding/drawdown(i.e. international)Risk Management• Better hedging• Trading diversificationTreasury as a strategic partnerValue Creation Hierarchy
    • © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 12ProductivityFinancial controlsGlobal visibilityEffective financial decisionsTreasury as a strategic partnerValue Creation HierarchyExamplesLiquidity Optimization- Higher rate of return- More ‘freed liquidity’ toinvest/apply- Or BothHedging- CF Hedging: protection easyto quantify ($100M hedged X1% volatility avoided = $1M)- Can calculate historically orproactively (off curve)Analysis- Bank Fees easy example
    • © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 13ProductivityFinancial controlsGlobal visibilityEffective financial decisionsTreasury as a strategic partnerBuild value throughcollaborative businesspartnerships Intelligence Insight AnalysisExamples• Shared service model• Forecasting economic change• Sales enablement• M&A analysis• Market expansion• Business IntelligenceValue Creation Hierarchy
    • © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 14What is your biggest difficulty in creating abusiness case?a) Understanding our own needsb) Aligning benefits to costs (e.g. creating ROI)c) Seeing ‘more than just productivity’ benefitsd) Putting it all together into an actualdocument and presentatione) No difficulties; we’ve got it coveredAudience Question
    • © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 15Focus: PulteGroupPulteGroup has implemented three treasurymanagement systems over the years, and hada fourth system available as a result of acorporate acquisitionKey Questions1) What are the drivers to continually updatetreasury solutions?2) Is this specific to TMS’ or is this something Pultedoes across all technology?
    • © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 16Focus: PulteGroupPulte’s latest treasury management solution iscloud-based, delivered using a Software-as-a-Service modelKey Questions1) How important is cloud technology for Pulte?2) How do cloud solutions help the business case?
    • © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 17Focus: PulteGroupTreasury systems offer productivity, improvedcontrols, visibility, and enable better financialdecisionsKey Questions1) What was relevant to justifying the investment in aTMS for Pulte?2) Did you have to make a formal business case eachtime?
    • © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 18Focus: Garmin InternationalPulteGroup treasury seems themselves as astrategic partner to the business and has takenon many responsibilities outside “typical” cashand treasury managementKey Questions1) What do you mean as a “strategic partner”?2) How did you get there?3) Does that help the justification for a TMS?
    • © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 19Focus: Garmin InternationalSince Tim joined in 2005, Garmin has achievedsubstantial growth, expanding from 3 countriesto 35 countries with almost 60 legal entitiesKey Questions1) At what point was treasury technology seen as anecessity?2) What were your original objectives before selectinga TMS?
    • © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 20Focus: Garmin InternationalAfter reaching the tipping point, Garmin initiateda vendor selection process to find a treasurymanagement system to meet global needsKey Questions1) Why was a TMS decided upon?• What were the other options?2) What type of solution (e.g. Excel) did you comefrom?
    • © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 21Focus: Garmin InternationalGarmin had to justify the expense and timespent to select and implement a treasurymanagement systemKey Questions1) How did you create a business case?2) Who was involved?
    • © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 22Focus: Garmin InternationalGarmin had to justify the expense and timespent to select and implement a treasurymanagement systemKey Questions3) What was relevant to justifying the investment in aTMS?• Productivity?• Visibility?• Controls?• Better Financial Decisions?
    • © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 23Focus: Garmin InternationalTechnology projects are always approved bysomeone. Anticipating why they think this isimportant is key to a smooth ‘green light’.Key Questions1) Who approved the business case?2) Why was it important to them?
    • © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 24Focus: Garmin InternationalGarmin has successfully implemented a TMSand deployed domestically and internationallyKey Questions1) Are you seeing the visibility you expected?2) What else have you been able to achieve?
    • © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 25SummaryProductivity is importantOften focused on time savingsCalculate based on cost of FTERarely is the FTE replaced!Qualitative Benefits also goodEffective financial controlsEstablish best practicesBecoming strategic partnerEffective Financial DecisionsVisibility enables better decisionsGenerates game-changing ROIGarmin InternationalVisibility justified projectAllowed other critical processimprovementsPulteGroupInnovation delivers business valueEfficiency enables strategic input
    • © 2013 Kyriba Corporation. All rights reserved. PRIVILEGED & CONFIDENTIAL. 26Questions?treasury@kyriba.comtwitter.com/kyribacorpkyriba.comlinkedin.com/company/kyriba-corporationfacebook.com/kyribacorp