Published: November 01, 2009
Lettre du Trésorier
Lionel Garnier-Denis
It was set up just over 20 years ago by three engineers. The company obtained a listing on the Second Marché of the Paris Stock Exchange in 1999. It is now listed on the Euronext under Section A and the stock is eligible for the deferred payment service. Since it was formed, annual growth in business has averaged 20%. The company’s two areas of activity are engineering and technology consultancy - which account for 70% of our business - and IT services and networks. We have a workforce of 12,500 of whom 88% are engineers. In 2008, we generated revenues of €846m, of which one quarter was from outside France, principally from Europe but also from India, Russia and Vietnam.
Our previous system was not totally satisfactory and was characterised by an excessive amount of manual transactions.
L G-D: The treasury function was set up in 1999 because the company had grown quickly but in some areas had retained the structures of an SME, firstly strictly regional, then national. At that time, it was necessary to set up the treasury function practically from scratch, notably by introducing a cash pooling system and obtaining cash management and banking communications IT resources. On this subject, if you want to take a shortcut, you could say that we went from the fax to ETEBAC 5 for the French part and Isabel for foreign markets. The Belgian protocol allowed access to the bank accounts of most of our non-French subsidiaries. The system also included a payment centre which was introduced in order to free up the operational staff as much as possible from the administrative tasks and to save us having a treasury function as such within the subsidiaries. This centre principally manages the payment of salaries, which accounts for by far the highest amount of payment flows. On the risk management side, we only have quite limited foreign exchange activity and no interest rate activity because until now the company has financed its own growth internally. There are still placements which, due to steady external growth, are primarily very liquid and secure, whether in the form of certificates of deposit, time deposits or monetary funds, amongst our pool of three banks.
However, although Alten went through a period of strong external growth after the burst of the internet bubble between 2001 and 2003, the system was not totally satisfactory and was characterised by an excessive amount of manual transactions.
L G-D: It was not possible to move to stage two from one day to the next. At an initial stage we conducted an examination based on our findings and the questions which we were asking ourselves. At a time when, objectively speaking, the systems in place were becoming obsolete in view of the size and the pace of the company’s growth, we had one eye on setting up an ERP project - we did not want to have the treasury modules of this future ERP imposed on us – and another eye on the consequences of the scheduled end of ETEBAC 5 based on the harmonisation of European payment methods. It was under these conditions in 2006 that I heard through AFTE of SwiftNet, which I began to take an interest in and told the finance division about it. We must remember that SwiftNet was initially highly coded, a matter of discussion amongst the initiated, and that only a handful of very big companies had tried it out.
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L G-D: It is in use, but not at all our banks. At the beginning, we really didn’t think it would be difficult to do. In any event it is an insurmountable task for just one treasurer and this is why Carol Calani, who is in charge of French treasury operations in France, and myself called upon the services of an internal project manager, Guillaume Peslin, to do this. The main difficulty with implementing SwiftNet was to do with the fact that Swift did not know how to or was not able to impose its standards on the banks. Accordingly, we had a wide variety of offers from most of the banks, without mentioning the banks which are not capable of providing a technical response to your requirements, and as a ricochet effect, IT tools that needed specific developments. Take the example of the FileAct service, which can send mass payment transfers, such as salaries or expenses. You will never find two banks that have exactly the same specifications. In fact, SwiftNet was surrounded by highly efficient marketing but I am not convinced that some of the banks were enthusiastic about the idea of marketing it. After all they are leaving the world of ETEBAC 5 which created very strong contractual links with the client and are telling themselves that SwiftNet gives companies more freedom. At the same time they are undoubtedly more inclined to sell their own FTP or proprietary web products.
L G-D: I did all my studies in my home town of Le Mans, where I still live. After I finished secondary school, I enrolled in a higher diploma in accountancy studies. I completed the three-year course and became an accountant but took a different route after six months, partly through lack of interest, and partly because I was a semi-professional motorbike racer. As a result of this initial training and the fact that at that time there was little or no information on the treasury profession, I would have undoubtedly not joined the profession had it not been for two decisive meetings with high-flying treasurers who initiated me into the principles to which I still refer, and into the mysteries of the profession. The first meeting was when I worked as an accountant for two daily newspapers and an advertising agency called Editions Amaury. The second one was when I held the post of treasurer at IPC France when the company was bought up by Zenith Data Systems, a subsidiary of Bull.
As a result of the second encounter, I came to occupy the post of treasurer at Bull’s industrial arm in Angers where I familiarised myself with foreign exchange and numerous type of commodities. I joined Alten in 1999 to set up the treasury function.
L G-D: We must welcome this type of initiative which can only be of benefit to the profession. The Master 2 Paris1-AFTE does perhaps need a few changes notably to the balance between the academic part and work-placement part. This will be achieved as time goes on. We looked at around 10 applications and found there was a gap between the vision the applicants had of the profession and the reality of corporate life. Nearly everybody wanted to go straight into risk management, at the risk of overlooking the basics of the profession which are learned in the back and middle office. The student who is working with us in conjunction with her theoretical training has integrated well and is beginning to acquire a minimum level of autonomy and now understands the benefits of gaining a command of the fundamentals.
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