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Centralisation and Bank Rationalisation in Central & Eastern Europe Air transport specialist SITA launched a series of initiatives with a view to rationalising technology, centralising financial activities, and replacing fragmented bank relationships with regional banking partners.

Centralisation and Bank Rationalisation in Central & Eastern Europe

by Yann Guengant, Director, Corporate Treasury, SITA

Over the past six decades, air transport, IT and communications specialist SITA has developed a truly global portfolio of services, and prides itself on delivering solutions and services that specifically meet the needs of their members and customers globally. One result of globalisation has been a slightly fragmented approach to cash and treasury management, with a diverse spectrum of banking partners, multiple technology platforms and disparate processes. To address this, and create a platform for future growth and efficiency, SITA launched a series of initiatives in 2008 with a view to rationalising technology, centralising financial activities, and replacing fragmented bank relationships with regional banking partners. In this article Yann Guengant, Director, Corporate Treasury, SITA, outlines some aspects of these parallel initiatives, with specific focus on Central and Eastern Europe (CEE).

Treasury and finance organisation

SITA has a centralised approach to treasury with a single Group Treasury based in Geneva, Switzerland. Five people are employed in treasury with a full range of responsibilities across cash and working capital management, bank relationships, trade finance, debt, investment and risk management. In 2008, we established a Financial Service Centre (FSC) in Prague, Czech Republic to provide centralised support for accounts receivable, accounts payable, billing, collections, purchasing and customer services. Local subsidiaries remain responsible for customer facing functions such as sales and services delivery and related activities that cannot be centralised or performed remotely.

The FSC services have been rolled out gradually, focusing first on Western Europe, North America and Eastern Europe. We are now introducing the FSC service to our Asia Pacific operations. From an IT perspective the FSC uses Oracle as its ERP platform, which is integrated with our treasury management system, Kyriba, to receive country funding requests from business units. Hyperion is used for financial planning and reporting.

Efficiency through bank rationalisation

As part of the FSC implementation, we recognised that rationalising our bank relationships would be instrumental in enhancing our cash and treasury management activities, and streamlining our financial processing. This led to the development of our Bank Footprint Project which aimed to reduce the number of global banking partners with which we work.

In CEE, we had a variety of banking partners before initiating the project. This made it difficult to achieve oversight over accounts, consolidate cash positions and leverage economies of scale. We therefore decided to review our bank relationships in CEE with a view to enhancing our cash and banking efficiency, leverage our FSC more effectively and streamline our payment processes. By reducing the number of banking partners, we would also be able to manage our bank relationships more effectively and strategically, and optimise liquidity management.

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