Improving Performance through Treasury Innovation at Geox

 

by Federica Vello, Treasury Manager, Geox S.p.A.

 

Since the end of 2015, leading footwear company Geox, together with partner bank UniCredit, have collaborated in an ambitious project to rationalise and streamline cash management processes, bank relationships and connectivity. Geox has a centralised treasury based at its Italian headquarters. The team comprises Federica Vello and ten further treasury and finance professionals including four in back office, two in vendor relations, three responsible for sales audit, and one person who runs the cash desk and manages travel expenses. In this article, Federica Vello, Treasury Manager of Geox S.p.A. describes the background and objectives of the project together with the progress they have made so far.

 

Treasury challenges and objectives

As a large, geographically diverse business, the Geox group comprises 40 companies located across 28 countries. As a result, we had built up a complex banking infrastructure with 65 banks and 150 accounts, with around 100,000 payments each year. We accessed these accounts via a variety of different electronic banking platforms, which made it difficult to achieve timely and accurate visibility across our global cash balances and to standardise and automate processes. Each of our banking systems had different security protocols, and we had to maintain multiple user profiles and passwords.

Innovation and technology are central to our business, and this applies to treasury just as it does to our footwear. This was a key factor behind our decision to rationalise and streamline our banking relationships, accounts and the processes and technology that we used to manage our cash management activities. Our aim was to simplify and automate processes at a group level to achieve greater cash visibility and process efficiency. In addition, we aimed to optimise the security and integrity of our processes by minimising manual activities and adopting best practices in security in accordance with SWIFT.

 

Establishing partnerships

A first step was to appoint our cash management banking partners. We needed banks that could provide the depth of solutions and services we needed in each country across our geographic footprint, whilst also providing consistent commercial conditions and a single point of contact across all countries in which we worked together. Following an extensive evaluation process, we ultimately appointed UniCredit as our cash management partner bank for all Geox group companies globally across all 28 countries and 14 currencies. 

We selected UniCredit for a variety of reasons. We already had a close relationship with the bank and had been a pilot customer for the bank in countries such as Hong Kong and Romania as well as for a variety of solutions. Throughout our relationship, we have been impressed with the quality of the bank’s service, its international reach and the depth of its solutions and technology that would enable us to make significant improvements to our cash management efficiency.

 

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Implementation in practice

We adopted a phased approach to implementation beginning with a pilot project involving 14 companies and four currencies. This included domestic and cross-border payments, payroll and tax payments, bank statement retrieval using MT 940, and both pan-European and domestic collections such as SEPA Direct Debit (SDD) and RIBA. We began the pilot implementation in December 2015 and went live in April 2016. Based on the success of the pilot project, we have since embarked on the second phase of implementation involving a further 17 countries and 10 currencies, with a view to completing the entire project by December 2016.

We have implemented SAP across all Geox subsidiaries to manage financial transactions consistently across the group. In addition, we use a well-established treasury management system provided by Italian company PITECO. A key additional component to our treasury technology infrastructure is SWIFT, which we now use as a single communication tool for bank connectivity worldwide.

 

Benefits and outcomes

Having completed our pilot project, with the second project phase now in progress, we have identified considerable efficiency improvements by implementing more consistent, automated processes. Our decision-making is improved as a result of better visibility over cash and risk, and we have achieved best-in-class levels of security and data integrity. As we progress with the final stages of our project in the coming months, these benefits will become even more important, and a vital objective is therefore to complete the project on time. 

Once we have completed the migration of our accounts, payments and collections to UniCredit, we will then be able to pursue additional opportunities such as extending the payment factory concept to payments on behalf of (POBO) in order to further centralise and streamline payments. We will also be extending our use of SWIFT for high value payments (FIN) and continue to automate processes as part of a wider initiative to become a paperless company.

 

“The implementation of the payment factory solution was the result of a co-operation with the client as we assisted Geox in its aims of increasing the sophistication and evolution of its treasury – making it fully able to operate successfully in today’s demanding global treasury scene.  The centralisation of payments was completely customised according to the needs, requirements and internal organisation of the client, in compliance with the standardisation imposed by SEPA. This common goal has led to an optimal rationalisation with advantages in terms of costs and timing of processing.” Massimiliano Cirelli, Cash Management International Sales Expert Italy, UniCredit

 

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Sharing experiences

A project of this scale and complexity that involves so many different countries and stakeholders needs a highly disciplined approach. We therefore implemented best practices in project management throughout in order to keep the project on track and ensure that it met our objectives. This involved identifying and planning activities in detail, and allocating roles and responsibilities, tracking progress and highlighting potential issues as early as possible to resolve them without jeopardising the project timeline. For example, we have encountered one or two issues in Serbia, but these have not delayed the project as a whole.

It was also important to recognise that each group company had quite distinct requirements related to the payments infrastructure, payments culture and regulatory environment in that country, so we took time to understand these requirements, and make sure that these were accommodated as part of a standardised, centralised process. Inevitably, the project had organisational implications, so we needed to be clear in defining roles, responsibility and accountability to make sure that everyone remained engaged, committed and proud of the final result.

Geox is based on an innovative idea that aims to ensure quality and well-being. We believe that the application of ethical principles of solidarity and environmental sustainability are needed for the long-term development of our company and of the world in which we live. Just as we guarantee the quality of our products, we also take a commitment to ensure that they are the result of a fair job, innovative production processes that are sustainable and environmentally friendly. Our cash management project to increase process automation, efficiency and security, and deepen our relationship with UniCredit, is an important way in which treasury is contributing to our group mission and improving the services we offer to group companies.

 

 

Federica Vello Treasury Manager, Geox S.p.A. Federica Vello has spent her career working with Geox, and is currently Treasury Manager with financial responsibility for the company. Geox  Geox is a leading brand of lifestyle footwear that uses innovative solutions and technologies to create stylish products that guarantee both impermeability and breathability. The group has a proud Italian heritage but has grown to become a highly international group with more than 65% of turnover generated from sales in over 110 countries worldwide. In 2015, Geox generated a turnover of EUR 874m, an increase of 6.1% since 2014, with a comparable increase in profitability. The company employs over 4,200 people worldwide and has over 1,160 Geox stores.