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

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

  1. 1. Treasury Hot TopicWhat your treasury system must do to cope with the next crisis<br />www.pwc.com<br />Thomas Jerolitsch, SunGard<br />Hans Candries, PwC<br />Gunter Geysens, PwC<br />
  2. 2. Agenda<br />2<br />februari 2011<br /> Background<br />Sungard’s perspective on what your Treasury System must do to cope with the next crisis.<br />
  3. 3. The crisis and its effects has led Treasury to consider lessons learned and set its agenda accordingly. <br />3<br />februari 2011<br />Background<br />What challenges did the crisis pose for Treasury?<br />Liquidity crunch, commodity & FX volatility, counterparty risk, accounting “fair valuation”<br />What challenges did the crisis pose for Treasury?<br />Liquidity crunch, commodity & FX volatility, counterparty risk, accounting “fair valuation”<br />Were we prepared?<br />Some were, some weren’t.<br />Few had all risk areas adequately covered.<br />Were we prepared?<br />Some were, some weren’t.<br />Few had all risk areas adequately covered.<br />What are the long-term Lessons learned?<br />“Best Practice” still holds true. <br />What do we need to do to implement it in a sustainable way and “make the change stick?”<br />What are the long-term Lessons learned?<br />“Best Practice” still holds true. <br />What do we need to do to implement it in a sustainable way and “make the change stick?”<br />What did we change during the crisis?<br />Many quick fixes “just to survive”<br />Opportunity for treasury to shine<br />What did we change during the crisis?<br />Many quick fixes “just to survive”<br />Opportunity for treasury to shine<br />
  4. 4. Liquidity and risk are now at the top of the Treasurer’s agenda – systems are seen as a key enabler. <br />4<br />februari 2011<br />Background<br />Key Issues for Treasuries - Source PwC Global Treasury Survey 2010<br />
  5. 5. Against the backdrop of increased demands on Treasury, the current technology environment at many companies is lacking. <br /><ul><li>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.
  6. 6. 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.
  7. 7. 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.
  8. 8. Performance management Treasury dashboards – Performance reporting is not usually a core function of Treasury systems and management dashboards are still in their infancy.
  9. 9. Commodities – Functionality is limited in most systems for commodities and information for valuation is sometimes not readily available.</li></ul>5<br />februari 2011<br />Background<br />
  10. 10. Therefore, many companies are looking to improved technology as a key enabler to meeting their treasury objectives. <br />6<br />februari 2011<br />Background<br />
  11. 11. Agenda<br />7<br />februari 2011<br /> Background<br />Sungard’s perspective on what your Treasury System must do to cope with the next crisis.<br />
  12. 12. What your Treasury System must do to cope with the next Crisis.<br />Thomas Jerolitsch<br />24/02/2011<br />
  13. 13. Agenda<br />Introduction<br />Working across the EcoSystem<br />Cash and Liquidity Management<br />Receivables<br />Payments<br />Risk Management<br />Additional Services<br />Summary<br />
  14. 14. Introduction<br />When talking about crisis, what do we think we need to do…<br />Identification of Cash and Risk<br />Cashflow Forecasting<br />Operational Efficiency and Control<br />Investment Performance and Risk<br />Treasury Resourcing<br />Bank Relationships<br />Value of Centralization<br />
  15. 15. Working across the EcoSystem<br />
  16. 16. Working across the EcoSystem<br />Optimize Receivables, Treasury and Payments<br />Foster Collaboration between Trading Partners<br />Provide Market-neutral and Vendor-neutral Trading Platform<br />Communicate from Receivables, Treasury & Payment Solutions as well as ERP and in-house banking systems.<br />
  17. 17. Cash and Liquidity Management<br /><ul><li>Identification of Cash
  18. 18. Interfaces to banks
  19. 19. Global
  20. 20. End of Day / Intra Day
  21. 21. Real time cash information
  22. 22. Investments / Funding
  23. 23. Cashflow Forecasting
  24. 24. Collection of Forecasting Data
  25. 25. Integration of Subsidiaries
  26. 26. Consolidation process
  27. 27. Global Cash / Liquidity position
  28. 28. Access to Money Market and FX Portals</li></li></ul><li>Cash and Liquidity Management<br />A practitioner’s view…<br />“SunGard helps us determine our daily cash position early in the day, allowing us to take advantage<br />of prime market rates for investing and borrowing.’’<br />Joann Protopapa<br />Manager - Treasury,<br />H. J. Heinz Finance Company<br />Treasury Management<br />…the role of the Treasurer is changing, there are increased regulations and more demand for control… <br />SunGard helped…<br /><ul><li>Gain Visibility for Decision Making
  29. 29. Provide Scenario Analysis
  30. 30. Improve Bank Connectivity
  31. 31. Reconcile Cash and Transactions</li></li></ul><li>Cash and Liquidity Management<br />Market viewpoint<br />“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. “ <br />
  32. 32. Receivables<br /><ul><li>Optimize Cashflow
  33. 33. Mitigate Bad Debt Expense
  34. 34. Consistent and structured processes & workflows
  35. 35. Foster Connectivity across the EcoSystem</li></li></ul><li>Receivables<br />A practitioner’s view…<br />“With SunGard, our DSO went from 60 to 55 days, while we watched our industry climb to 70.”<br />Jerry Drake<br />VP Financial Services<br />Viracon<br />Receivables Management<br />…treatment of trade receivables is as an important measure of a company's financial health… <br />SunGard helped…<br /><ul><li> Mitigate Corporate Credit Risk
  36. 36. Lower DSO
  37. 37. Reduce Past Due A/R
  38. 38. Decrease Manual Processing</li></li></ul><li>Payments: Challenges<br /><ul><li>Business Challenges
  39. 39. Multiple banks & multiple cash management services
  40. 40. End of day & intraday
  41. 41. Risk compliance
  42. 42. Technology Challenges
  43. 43. Separate connections to each bank
  44. 44. Complex to manage
  45. 45. Costly to maintain
  46. 46. Unreliability
  47. 47. Lack of portability</li></li></ul><li>Payments: Corporate to banks communication<br />Receivables<br />1<br />Treasury<br />SSB<br />2<br />DATA MANAGEMENT<br />INTEGRATION<br />SSB<br />FINANCIAL MESSAGING<br />Payments<br />NORMALIZE<br />TRANSFORM<br />MONITOR<br />SSB<br />3<br />ERPIn-house Systems<br />
  48. 48. Payments<br />A practitioner's view…<br />Payments Processing<br />…many corporations rely on a fragmented approach to payments – lacking infrastructure, connectivity and control…<br />SunGard helped…<br /><ul><li>Harmonize Payment Flows
  49. 49. Establish Business Rules / Workflow
  50. 50. Utilize Least Cost Routing
  51. 51. Execute in Any Format </li></ul>EXECUTE PAYMENTS FROM ANY SYSTEM AND IN ANY FORMAT AND IN ANY CURRENCY<br />
  52. 52. Risk Management<br /><ul><li>Measuring Market Risk
  53. 53. Adjusting valuations for counterparty Risk
  54. 54. Exchange traded vs. OTC instruments
  55. 55. Measuring Counterparty Risk
  56. 56. Creation of visibility
  57. 57. Definition of limit policies
  58. 58. Real or Near time monitoring
  59. 59. Mitigation of Credit Risk through Receivables Management
  60. 60. Balance Sheet Exposure management</li></li></ul><li>Additional Services<br />Executed Trades<br />Summary Level Hedge Data<br /> Better Data Better Decisions <br />Treasury<br />Workstation<br />Trading<br />Platform<br />FX Trades to be Executed<br />Aggregate Analyze Decide<br />“With FiREappswe are confident of our ability to manage FX risk, regardless of the complexity of our business, or the prevailing market conditions.”<br />Kristen L. Magnuson, Executive Vice President and CFO<br />JDA Software<br />
  61. 61. Additional Services<br />Corporate-Bank<br />Services<br /><ul><li>Electronic Bank Account Management (eBAM) Q4 2010 Interface from your Payments & Treasury solutions (with SWIFT inside) to manage bank accounts (opening, closing, signatories …)
  62. 62. Bank Account Statement Portal Q2 2011Manages bank accounts for account statement receipt, performs validity checks, creates dashboard and reporting
  63. 63. Bank Fee AnalysisQ2 2011Track and manage bank fees from your Payments & Treasury solutions (with SWIFT inside).</li></ul>Ongoing development & delivery of additional services for Corporate-Bank, Corporate-Corporate and Corporate-Trading Partner Communications<br />
  64. 64. Summary<br /><ul><li>Treasury can influence different elements of the financial supply chain
  65. 65. Looking at the financial EcoSystem
  66. 66. Cash Management
  67. 67. Receivables
  68. 68. Payments
  69. 69. Risk Management
  70. 70. Additional Services
  71. 71. Software as a Service (SaaS)</li></li></ul><li>Questions?<br />

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