Leveraging Technology to Climb Treasury Mountains
By Eleanor Hill, Editor
Gaining global insight into and control over treasury operations is a pipe dream for many treasurers. But two of Kyriba’s clients – Royal FrieslandCampina and Ingersoll Rand – have leveraged the vendor’s cloud offering to transform their workflows to overcome visibility hurdles, eradicate inefficiencies and become even better strategic partners to the business. Each won a 2019 TMI Corporate Recognition Award for their hard work.
Five years ago, the corporate treasury team at Royal FrieslandCampina initiated a journey from corporate policymaker to strategic corporate treasury department – with a centralised operations team as part of the new set-up. The aim was to gain global insight into, and control over, the company’s cash, as well as supporting the basic treasury functions in the shared service centres.
The first step was the implementation of a centralised payment hub that supported the standardisation of the global payments processes. A dedicated treasury operations team was also created to include a treasury project manager and treasury systems manager. In addition, a dedicated treasury-owned IT strategy was introduced, setting clear guidelines for the selection of new systems. Choosing cloud solutions was particularly important in future-proofing the treasury operations, in order to reduce overall dependence on internal IT, and always have an up-to-date version in order to improve speed of decision-making.
This set-up kick-started acceleration towards an optimal global payments and collections process that would become more time and cost efficient and less error-prone using an efficient and lean IT infrastructure. Project Everest, as it was named, was born in 2017 to realise these objectives. After careful consultation by the main stakeholders, the project plan was mapped out with four camps to reach the summit:
- Intercompany netting: In 2017, corporate treasury selected Coprocess as its global netting tool. The netting of one million invoices per year is now a continuous process, which releases the pressure of month-end processing by the shared service centres and reduces the transaction charges by €100,000 per year.
- In-house banking: To further reduce external payments and move away from notional pooling, an in-house bank system was selected and implemented in 2018. During the selection process Kyriba provided Royal FrieslandCampina with an opportunity to set up a solid in-house bank, and to update and integrate the treasury management system (TMS) functionality within one solution. The total solution was implemented in six months and went live at the end of 2018, with full treasury functionality and an in-house bank. The number of external bank accounts was reduced by 30%.
- Payment factory: In 2019, Royal FrieslandCampina began further reducing the number of bank accounts and gaining additional control of outgoing and incoming cash flows by using virtual accounts. The company also gained best-in-class security for its payments’ workflows with SOC1 and SOC2 compliance.
- Beyond the summit: Royal FrieslandCampina is continuously looking at digital optimisation. Next on the agenda is the implementation of Kyriba’s FX solution (formerly FiREapps), to automate FX trading and centrally calculate and monitor FX exposures. Robotic process automation (RPA) will also be implemented to further reduce manual steps in the treasury and netting processes.
Jeroen Brieffies, Group Treasurer and Project Manager of Everest, says: “We are so proud of the digital transformation journey initiated by treasury. We now have the tools to further optimise our cash flows and processes, quickly and efficiently. We can also provide better internal insight and authority to our stakeholders.”
These impressive achievements led to the Project winning TMI’s 2019 Corporate Recognition Award for ‘Best in Class Payments’. Simon Shorthose, Managing Director, Northern Europe – Kyriba, adds: “We are delighted that Royal FrieslandCampina has been recognised for its payments process optimisation. Kyriba is proud to have been instrumental in this digital transformation journey that has seen the treasury team adding significant cost savings, visibility, control and strategic value to the business.”
Meanwhile, Ingersoll Rand has been busy harnessing the power of Kyriba’s cloud capabilities to gain real-time visibility of group FX exposure. To address gaps in the company’s hedging capabilities and to translate exposure management into meaningful analysis that could add value to the business, Ingersoll Rand turned to Kyriba’s FX solution (formerly FiREapps).