Zalando: From Startup to Grown-Up
An Interview with Marco Arosio, Head of Treasury, Zalando SE
Could you tell us a little more about the company and, in particular, your treasury function?
Zalando is Europe's leading online fashion platform for women, men and children with presence in 15 European markets. We provide our customers with a convenient one-stop shopping experience, offering an extensive selection of fashion items including shoes, apparel, and accessories, with free delivery and returns. Our assortment of more than 1,500 international brands - ranging from popular global brands to local brands - is complemented by its private label products.
Zalando’s websites attract more than 138 million visits per month. In the fourth quarter of 2015, roughly 60% of traffic came from mobile devices, and we had more than 17.9 million active customers by the end of the year.
The Treasury Team at Zalando is organised along three main areas:
Cash Management - includes processes such as payment approval process, cash pooling, bank account monitoring and short- & long-term liquidity planning
Risk Management - monitors and hedges the risk arising from financial risks (FX, interest rate). Mitigates market and counterparty risks through the distribution of cash reserves
Financing - manages cash and guarantees between the company, subsidiaries and suppliers
What were the main factors that led to your decision to implement a new solution?
The main factors that led us to the need for a new solution were:
- Manual uploading and execution of payments through a number of online banking platforms
- Cash balances could not be easily consolidated; difficulty in carrying out cash pooling among accounts
- MS Excel was the main communication tool between internal teams
- Manual upload of FX transactions onto the trading platform; manual booking and valuation for executed deals
- Data complexity; process policy requirements; no direct access to essential market data
Could you outline the main benefits of the solution so far? Are there any additional long-term benefits you are expecting to see?
- Single point of entry for all bank accounts
- Automatic cash pooling & integrated payment approval processes (four-eye principle)
- High cash flow transparency
- Integrated exposure identification, analysis & deal execution
- Customising and management for the traded financial instruments
- Automatic deal booking & valuation
Long-term benefits: integration of platforms
- Seamless data integration between systems
- FTE savings
- Higher reporting speed
- Capacity to process and analyse complex data
- Ability for the system to adapt to a developing organisation
What were the biggest challenges your team encountered during the implementation of the solution?
- Expectation vs reality: when defining the requirements the team focused on the business needs. However, some requirements involved customising and developments which added a lot complexity to the requirement definition
- Acquiring know-how: in the first implementation the team had to spend extra time to become familiar with the new system
- Keeping Zalando-specific developments as flexible as possible as the business was continuously undergoing changes in the short to medium term and these will need to be reflected in the system
- Aligning the resources and getting the commitment from the different departments for the defined project timeline (definition and approval of requirements, development, testing etc.)