Cash & Liquidity Management

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A Co-operative Approach to Change: Cash centralisation at CSC Implementing a cash and liquidity management project can be a complex process, particularly in a decentralised organisation where there is a variety of internal stakeholders who are critical to the success of the project. In this article, Eric Humbert, Group Treasurer of business solutions firm CSC, shares his experiences of the initial stages of a cash centralisation project, with additional comments by Thomas Eisenhuth, Societe Generale. Societe Generale provides local banking services to CSC in parts of Europe today, and is part of CSC's evaluation for the second phase of the project.

A Co-operative Approach to Change: Cash centralisation at CSC

by Eric Humbert, Treasurer, EMEA Central Region, CSC

Implementing a cash and liquidity management project can be a complex process, particularly in a decentralised organisation where there is a variety of internal stakeholders who are critical to the success of the project. In this article, Eric Humbert, Group Treasurer of business solutions firm CSC, shares his experiences of the initial stages of a cash centralisation project, with additional comments by Thomas Eisenhuth, Societe Generale. Societe Generale provides local banking services to CSC in parts of Europe today, and is part of CSC’s evaluation for the second phase of the project.

Background to the project

The experience of implementing a cash management project will vary considerably between organisations according to their culture, business organisation and cash management objectives. CSC, for example, is a largely decentralised company resulting from a number of mergers and acquisitions. Three years ago, we made the decision as a group that we should reorganise the company along more centralised lines. From a treasury perspective, we recognised that analysts were looking more closely at cash, including both the cash flow information that CSC was producing and how it was used. We therefore embarked on a project to centralise cash management based on a single technology platform. Our objective was to enable us to make better use of cash across the group, improve efficiency and control, enhance reporting and reduce costs. One element of this project was to establish external cash pools to centralise cash and make it available to treasury. At the same time, we recognised the significant value that our local finance teams add to the business, so we decided to maintain a decentralised approach to payments and retain the local expertise that each team had built up.

Defining a project approach

We made the decision to adopt a ‘step by step’ approach as opposed to trying to make radical change very quickly. There were various reasons for this:

Firstly, centralisation was a significant organisational and cultural change, and we wanted to ensure that key individuals across the group were supportive and engaged in the transformation;

Secondly, we knew that it would be more difficult to centralise our cash in some regions than others; therefore we decided to develop experience based on a limited number of countries which we could then apply to other regions;

Thirdly, we needed to ensure that our cash pooling project was aligned with our global hedging programme.

Based on this strategy, we started with Austria and Switzerland, with a view to centralising cash into a euro cash pool located in Germany.

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