Published: November 01, 2011
MetaCase is a company with which many treasurers may be unfamiliar; however, its treasury management system, Target One, is established as the leading system amongst corporations both headquartered and located in Iberia. In addition, the solution has a strong value proposition in other regions. This article describes the experiences of a major corporation that recently implemented Target One, and highlights the wider relevance of MetaCase’s value proposition.
MetaCase’s client is one of the largest energy operators in Europe, with generation, distribution and supply activities in Europe (Spain, Portugal, Belgium, France, Poland, Italy, Romania), USA, Canada and Brazil. The company is also the third largest producer of wind-farmed energy globally. The company has an annual turnover exceeding €14bn per annum and has over 12,000 employees. The scale, the international reach of the company and fragmented technology environment led to a broad and complex set of treasury and cash management requirements, resulting in a project that has relevance to many other corporations internationally.
Before embarking on its business and technology transformation project, the company had several information systems in which financial processes were managed, including seven SAP systems covering different regions, a cash management system for just one region, hundreds of spreadsheets and multiple different bank communication systems. Processes were also inefficient with significant diversity across regions. These issues resulted in fragmented data, duplication of tasks and information, lack of security and lack of visibility over liquidity and risk, etc.[[[PAGE]]]
The company recognised that a first step was to analyse existing processes, procedures and systems and identify priority areas to optimise, simplify and standardise by producing a Business Blue Print. The second step was to rationalise systems with a view to implementing a single platform for managing all financial flows and where effective financial decisions could be made.
Some of the company’s key decision-makers in treasury already had a relationship with senior executives of MetaCase as the company had already delivered an outsourced service for multibank connectivity for bank statements and automated accounting entries for the cash pool. Based on the quality and success of these services, and MetaCase’s introduction of the Target One platform in 2008, the board decided to appoint MetaCase to analyse its financial processes (Business Blue Print) and implement a pilot Target One project. Following a successful project, the board then made the decision to appoint MetaCase for a global rollout in 2009, including process analysis and implementation of Target One as its financial management system to replace existing systems, and to enable best-in-class business processes.
There were a range of factors that contributed to this decision:
i) MetaCase and its solution Target One had already proved their capabilities in the company’s business environment, including developing and implementing new functionality and supporting their specific needs.
ii) MetaCase’s solution comprised not only a technology platform, but a wider suite of consultancy services to ensure that the company was leveraging optimal business processes and therefore achieving the maximum degree of financial and operational efficiency possible.
iii) Target One delivered a wide range of functionality, unlike other solutions that have particular strength in one area, such as risk management or cash management. Instead, the platform combines the full spectrum of treasury, risk, cash management with bank communication, payments and collections, which would allow the company to manage all of its financial flows and processes through a single solution.
iv) The services and the solution were economically attractive with a clear cost benefit.
The company considered an alternative solution, but it was found to lack the required breadth of functionality that it required, which would therefore have prevented them from achieving their objective to manage all of their financial activities in a single system.
The implementation was done in the Group’s shared service centre (SSC). There were two outcomes of this. Firstly, the volume and scope of activities was increased as the SSC continued to demonstrate the benefits that a centralised approach to financial management offered to the business. Secondly, the project was rolled out to other regions based on its proven success.
One issue that often arises during large, complex projects of this kind is how to encourage people’s support for a new solution or a change in responsibilities. While a system rollout is often not difficult from a technology or functionality standpoint, political issues are frequently more challenging. For example, when rolling out the new platform, while people appreciated the value of a single system across the business, the rationalisation of processes and migration into the SSC created greater obstacles. Senior management recognised that the benefits of the new approach were considerable, however, and could therefore help to address staff concerns, and reallocate employees to more valuable tasks.[[[PAGE]]]
The optimisation of financial processes, increase in SSC responsibilities, and rollout of a single financial platform across the group has delivered phenomenal results. For example, in Europe alone, the amount of resource required for financial processing has reduced by more than 3,000 man days each year and processes have been accelerated considerably. In addition to operational advantages, the company’s financial decision-making has improved substantially as treasury has a comprehensive, timely and accurate view over cash and risk information. The company now leverages Target One and Metacase’s outsourcing services to manage more than 100 banks and 1,000 bank accounts, with a standardised approach to formats and information (including normalising different bank formats and transaction codes) and with a high level of security (avoiding the need to exchange files across the network). Processes such as bank account and treasury reconciliation are fully automated, using intelligent matching capabilities through a powerful simulator, and more than 10,000 monthly flows are now posted automatically into the seven different SAP systems. This high degree of integration also provides forecast information, enabling treasury to produce an accurate and daily early morning worldwide cash forecast position. More than 50 different financial instruments are managed, and around 4,000 open contracts, representing more than €16bn. A variety of reporting is produced, including both operational and strategic reports (Tableau de Board).
To complete the global coverage of financial flow management in Target One, the next step is to leverage the platform for the Group’s cash flow forecasting and liquidity planning, since the short daily cash position forecast is already consolidated. While cash flow forecasting is a primary objective for most financial managers, it is impossible to achieve a timely, accurate forecast without complete and reliable data, particularly over a longer time horizon. This would account for so many companies struggling to forecast cash flow effectively. Having now achieved a complete rollout of Target One across the business, all flows are now passed through a single channel, resulting in a comprehensive, accurate database on which cash flow forecasting can be based.
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The majority of MetaCase’s clients are multinational corporations with global business operations. As the economic situation continues to be uncertain, companies of all sizes and headquartered in all countries are recognising the value of optimised financial processes to reduce costs and increase efficiency, and a single, robust and cost-effective platform for all financial flows, enabling decisions to be made based on complete and accurate information.
Consequently, MetaCase and its Target One solution, complemented with expert business consultancy, is continuing to attract a blue chip client base both across the Iberian peninsula and beyond, a trend that we expect to see continuing strongly. In some countries, MetaCase will continue to establish a direct market presence, while in others, the company will leverage partnerships with leading treasury consultancies in order to build optimal treasury and cash management frameworks based on a leading treasury and cash flow management platform.
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