!"#$%&'()'*+,-%"./"%0/"/1!'2'34,-%56'/786*%5'3.,#2#-* "#%!/9'%5+:';%<#,'*%/,=%>#86%!/,+"*

Transcription

1 "#$%&'()'*+,-%"./"%0/"/1 '2'34,-%56'/786*%5'3.,#2#-* "#%/9'%5+:';%<#,'*%/,=%>#86%/,+"* Laurie McCulley, CTP Managing Director Treasury Strategies, Inc. Robert C. Knecht, Jr., CTP Director of Treasury Operations Campbell Soup Company

2 Agenda 1 Treasury at Campbell Soup Company 2 How Technology Supports Treasury s New Role 3 Best Practices for Technology Selection 4 Lessons Learned 5 Call to Action

3 Treasury at Campbell Soup Company

4 Global Food and Beverage Manufacturer Nearly $8 billion in sales Approximately 19,000 employees 140-year history Products marketed in 120+ countries

5 Campbell Soup Company: Three Basic Categories Simple Meals Baked Snacks Healthy Beverages

6 Recognized as a Great Place to Work

7 Diversity & Inclusion: Multiple Affinity Groups

8 Campbell s Treasury Campbell s Treasury Profile Centralized Treasury in Camden, with Regional Treasury Centers in Australia/EMEA RTCs manage treasury for region, but trades must be approved by Headquarters Activities listed below Treasury Derivatives Management & Related Accounting Long-Term Debt Management FX Trading Cash Management Investments CP Issuance Floating-Floating Cross-Currency Swaps Interest Rate Swaps Fixed-Fixed Cross-Currency Swaps

9 Treasury Process Review Treasury, with the assistance of Treasury Strategies, conducted an extensive review of our current operational processes and systems Primary review findings and conclusions Senior management s ability to monitor risk and liquidity on a global basis severely constrained by our technology architecture Lack of an integrated treasury system put us as an outlier among Fortune 500 companies (per Treasury Strategy s annual survey, 80% of companies with revenues above $5B have full suite treasury systems) Significant amount of manual data manipulation in an Excel environment due to multiple system environment Increased risk of error Inefficient Treasury sought approval to evaluate and select a single global treasury system

10 Treasury System Challenges Derivatives Mgmt Debt Mgmt FX Mgmt Cash Mgmt Legacy TMS 1 - Swaps Excel spreadsheets Hedge Accounting Valuation Fax/ SAP Financials (G/L) Bloomberg Legacy TMS 1 - Longterm debt Excel spreadsheets Fax/ SAP Financials (G/L) Bloomberg Excel spreadsheets Bank websites Fax/ SAP Financials (G/L) Bloomberg Legacy TMS 2 - Cash Positioning Legacy TMS 1 - Netting Excel spreadsheets Bank websites - Payments Fax/ SAP Financials (G/L) Bloomberg Two legacy TMS platforms used for limited functions No automated interfaces with banks Limited audit trails All analytics and accounting entries related to derivative, debt and FX management generated in complex Excel spreadsheets and manually transferred to SAP

11 Treasury Operations Desired End State Greater Control and Operational Efficiency Straight through processing of all transactions will eliminate manual rework and reduce errors Automated data pulls from Bloomberg removes need to re-key in forward interest and FX rates Provide critical valuation of derivatives allowing compliance with longhaul hedge accounting Obtain greater visibility to global cash positions of all legal entities Ability to track MTM exposure with counterparty and access counterparty risk Potential for in-house management of cash in Australia and Europe, eliminating outsourced Treasury in Europe. Improved intercompany netting process by providing direct feed between SAP and Treasury system. Automated audit trails

12 How Technology Supports Treasury s New Role

13 Treasury s New Demands

14 Sub-Optimal Technology Environment = Data Bank Account Administration Partial maintenance in disparate spreadsheets Cash Pooling Rely on bank to track balances and allocate interest Intercompany Netting Rely on bank to perform netting and FX Treasury Spreadsheets Functions used and data keyed: - Bank polling - Cash Positioning - Short term investments and debt Various bank software or logging on to multiple bank web-sites for bank reporting Payments Multiple bank websites used to initiate payments Subsidiaries Use of standalone systems and/or spreadsheets Occasional data provide to Corporate via spreadsheets Accounting and Reconciliation Passing of Excel files and manually reconciling files Financial Transactions Analysis Logging on to webpages, faxing, or calling banks to get rates on MM and FX rates Financial Transactions FX, commodities, LT debt and LT investments maintained in disparate spreadsheets. Trades performed by phone

15 Best-In-Class Architecture = Intelligence Bank Account Administration Dashboard & Reporting Centralized, Integrated & Real-Time System Treasury Management System Functions available: - Bank Communication - Cash Positioning - Cash Forecasting - Bank Account Administration - Payments - Short term investments - FX & Risk Management - Intercompany Loans - Multilateral Netting - Accounting & Reconciliation Bank Connectivity via SWIFT Financial Transactions Analysis & Pricing Intercompany Loans & Netting Accounting & Reconciliation Payment Factory

16 Best Practices for Technology Selection

17 Think About Challenges The most common reasons why organizations achieve only a partial functional or geographic implementation of their treasury technology: Lack of internal treasury resources Competing projects and lack of focus Lack of senior management involvement Challenging implementation Different functional requirements in regions Lack of communication with TMS vendor Changing business drivers Changing environment

18 Technology Selection Steps Evaluate Current Processes Assemble Project Team Define Requirements Develop Request for Proposal (RFP) Identify Vendor Systems Conduct Gap Analysis Conduct Scripted Vendor Demos Evaluate Vendors & Conduct Proof of Concept Tests Develop/Finalize Business Case

19 Evaluate Current Processes Evaluate existing workflows and processes: Cash management and forecasting Bank relationship management Payments Approvals and control points Transaction execution, documentation and reporting Assess your existing system(s) (if applicable) both current usage and potential capabilities Investigate your workflows thoroughly are you re-keying data? What s your ideal treasury look like?

20 Assemble Key Stakeholders Internal Audit Senior Management Operations IT Tax Treasury Accounting Legal Treasury Technology Selection and Implementation Project Consultants External Auditors Vendors

21 Define Requirements Determine functional priorities What s most important in your organization? Cash positioning Cash forecasting Financial transactions Payments Bank relationship management Reporting Weight functions according to importance Assess implications and impact of existing systems and infrastructure

22 Develop Request for Proposal (RFP) Company Information: You Supply Company Background Treasury Activities Current Systems and Banks Critical Requirements Vendor Information: Vendor Supplies Business Requirement Response Critical Functional Requirements Technical Specifications Pricing

23 Identify Systems & Vendors Bank online systems Bank-offered treasury systems Fully integrated best-in-class Treasury Management Systems ERP treasury modules Specialized systems FX Bank-to-Book Reconciliation Risk Management Multilateral Netting Bank Account Administration Online trading portals

24 Conduct Gap Analysis Review current system usage Assess additional functionality now available Evaluate gaps between requirements and system capabilities Decision point Remain with existing vendor? Evaluate larger vendor pool? Include existing vendor in selection process?

25 Conduct Scripted Vendor Demo Schedule on-site visits for vendors Allow sufficient time for demos Create customized script including your specific data One script should be used for all vendors for equal comparison Invite stakeholders to attend, including all business unit users

26 Evaluate Vendors Take a holistic approach: Quantitative Scoring + Qualitative Factors + Technical Factors + Cost Considerations = Best Choice

27 Evaluate Vendors (cont d) Quantitative Scoring: Score vendor offerings based on RFP and demos Consider a standard scale such as: 1 = Major functionality gaps 3 = Capabilities are acceptable. Minor gaps 5 = Meets or exceeds requirements Weight functional areas to emphasize business needs

28 Evaluate Vendors (cont d) Quantitative Scoring: Sample Score Summary

29 Evaluate Vendors (cont d) Qualitative Factors: Factors to consider may include Ease of system integration into your environment Vendor s experience with similar firms Vendor s understanding of and ability to apply business requirements and sample data Peer reference feedback

30 Evaluate Vendors (cont d) Cost Considerations: Ensure number of core and light (read-only) users are not under or over-estimated Assess costs on a consistent basis (installed, hosted, ASP) Compare vendor system & implementation costs to budget

31 Finalize Budget / Business Case Quantitative factors Decreased financial transaction fees Reduction of idle balances Lower cost of debt or increased yield on investments Staff efficiency in terms of fractional time spent in manual tasks Qualitative factors Decreased risk Implementation of best practices Enhanced treasury visibility in organization Expiring existing system license Greater controls around treasury processes and transactions Costs Licensing Maintenance Hardware Software Implementation

32 Typical Timeline Phase 1 - Treasury Review Four Weeks Phase 1 - Intensive Onsite for Determination of Business Requirements One - Two Weeks Phase 2 - Technology Selection Eight to Ten Weeks Phase 3 - Implementation TBD

33 Lessons Learned

34 Lessons Learned Evaluate availability of dedicated resources - internal vs external or combination of both Assess nice to haves vs must-have requirements and the associated cost Determine capacity for in-house hosting vs. external vendor hosting of system Evaluate vendor implementation methodology and whether they recommend phased approach to project

35 Call to Action

36 Call to Action 1. Review current treasury processes and identify areas of weaknesses. a. How do you facilitate treasury providing intelligence to the organization? b. Where are best practices not being employed? 2. Explore where technology can improve upon inefficient treasury practices. 3. Determine how technology needs can be supported within the organization. 4. Evaluate vendors for best possible solutions. 5. Select and implement selected technology.

37 Conclusion The role of treasury technology is now more strategic than ever Combining the correct vision with the correct technology is critical: Planning Selection Implementation Successful execution enables treasury to be the financial information nerve center of the organization

38 Questions Bob Knecht Director of Treasury Operations Campbell Soup Company Laurie McCulley Managing Director