by François Masquelier, RTL Group Head of Treasury, Corporate Finance & ERM, and Honorary Chairman, EACT
Often the treasurer is viewed as a technician providing a service to the financial department. S/he is considered as a kind of specialist serving the company, at a central level, by performing specific, well-defined tasks. Yet within multinational groups the treasury is becoming increasingly centralised, and structured as a service centre. Today, the majority of groups consider that the treasury should be a centre of expertise, providing a service both to other departments within the finance group and to its subsidiaries. Increasingly companies employ a hyperspecialist technician, who must, however, serve the entire group, offering financial advice and proposing appropriate financial products, along with the relevant accounting procedures. When we speak of service, we cannot escape its quality aspect, or the level of satisfaction of the customers receiving this service. Here the clientele is in-house: in the ‘corporate centre’ or at group affiliate level. Why shouldn’t we take an interest in the satisfaction of customers being served by the treasury? It is this concept the current article seeks to address. If a subsidiary pays a fee to the Group Treasury (GT) for a financial service provided, it is quite normal to seek to determine its level of satisfaction. And what if the affiliate customer is not satisfied? Should we not review and reflect from time to time on what the other party expects from us in order to improve the service and advice we give them?
Traditional structure - types of treasury
To secure our customers' loyalty we need to be sure that our subsidiaries are happy with the services we provide.
We must consider the most common forms of structuring the treasury department (see table below). Most major groups organise the structure of their treasury department in this way. The current trend is for fully centralised GTs (although some of them are regionalised). They operate as an advanced form of ‘in-house bank’. Lastly, they operate a service centre approach and often invoice their services, mainly for tax purposes.
It would be impossible to include all the questions asked. The table is only an illustration of the types of responses we should be looking to obtain. In addition to closed questions, open questions may be utilised, giving free rein to ideas and identifying essential requirements. By mapping expectations we can ensure that requests are not made in isolation and that our range of services may be adjusted where necessary to match these specific expectations.
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Customer satisfaction study
The main objectives of this type of study are to:
1. better define the clientele
2. measure overall customer satisfaction with the various services provided
3. compare past and present customer satisfaction (benchmark)
4. define the expectations of a clientele and prioritise their importance in order to better determine what needs to be delivered
The quality of services to be evaluated and expectations to be defined relate to:
- Compliance with agreements signed
- Assistance offered (before, during and after provision of a service)
- Welcome, information and communications
- Responses to requests and consideration given to them
- Subcontracting of treasury and finance services
- Feedback from reporting and analyses.
Effective marketing recommends that customer satisfaction studies should be carried out as part of ISO 9001 quality procedures. Why should the treasurer be exempt from this type of study?
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Expectations transformed into objectives
In this type of survey, the customer expectations identified must be transformed into qualitative and/or quantitative objectives to be achieved. These objectives, or KPIs, may become annual personal performance objectives for the treasurer and his/her team.
It is good practice to expose ourselves to positive criticism and to take on board comments.
The aim is to develop customer loyalty (even if we know that often they cannot seek the same services elsewhere - from a competitor or subcontractor). To secure our customers’ loyalty (even if our clientele is relatively passive and/or the range of services not very flexible), we need to be sure that our subsidiaries are happy with the services we provide. The company often places the customer within its strategy for implementing ISO 9000. It is therefore natural to adopt a similar approach in-house. It is also a way of fulfilling the KPI approach, setting bonuses for employees in the treasury department, their performance targets and above all future objectives to be achieved.
Moreover, where affiliates are consulted and their responses taken into account, their motivation levels increase and they feel more involved in financial operations. When this type of analysis is undertaken, and particularly during the analysis and debriefing process, subsidiaries are able to feel valued and motivated by the interest shown in their point of view.
Treasurers sometimes create ‘score cards’ for various purposes (in particular management of bank relationships or when analysing tenders) to draw up a refined form of classification. In this particular case it might provide an interesting insight into the GT / subsidiaries relationship.
Which is preferable - a bilateral discussion or a formal satisfaction survey?
Of course, some would claim that a good two-way discussion is sufficient to ensure the customer’s satisfaction. This is a possibility! But the idea of a formal written or electronic survey (even if anonymous) offers the advantage of comparing responses, ensuring their relevance and objectivity, and setting objectives for the treasury department. Satisfaction and the degree of satisfaction may therefore become a precise and quantifiable objective or KPI for use by management.
EuroFinance last year launched a survey of this type in a standardised format; this is now an annual undertaking with the results presented at their annual international event, this year in Barcelona from October 1-3 . For further details, please contact EuroFinance ([email protected]) or go online to www.eurofinance.com to participate. We are pleased with this initiative and with the agreement to participate in this exercise given by a number of major groups.
The advantage this brings is to standardise the exercise, incorporating it into a wider process and into other multinational groups. We believe it will enable us to establish an interesting and useful benchmark. It will enable the treasurer and his /her CFO to position themselves not only within the group in terms of services rendered, but also in relation to their peers and other international groups. Is this not a continual search for the comfort of knowing that what we have done has been done well and is in line with market practices?
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To sum up:
Even though everyone agrees that comparison proves nothing, it is good practice to expose ourselves to positive criticism and to take on board comments to help improve the service we provide. If by some good fortune, this service is perfect and adequate, so much the better for treasurers! We note that treasurers who play a proactive leading role always like to be fully informed about best practice in the sector and do not fear comparison. Quite the reverse: by coming into contact with others, we are able to improve and this, in the final analysis, is the main focus and object of the exercise.
Whatever the level of service we deliver to our affiliates, it can always be improved. To achieve this, we must accept the need to question what we do, which is not a gift shared by all. Even though sometimes we will not find any errors, where we do, we should use these as means of enhancing mutual understanding and improving our performance.
Where it simply a questions of providing our customer with something extra or different, it is useful to formalise this. The idea is to work together in the interests of the group. Better in-house service also creates value for shareholders. Motivation within subsidiaries can only increase if you involve them in your vision of the service to be offered and advice to be given. This exercise may even be undertaken by a treasury working group which many companies organise with their subsidiaries once a year. But the structure of the exercise or its frequency are not important; it is its actual implementation that is to be welcomed, demonstrating as it does, a desire to want to do better. This is the main point of the exercise.