Catalysing Multinational Financial Management with Corporate Financial Portals Hong Tuan Kiet Vo, Christof Weinhardt Chair for Information Management and Systems University of Karlsruhe (TH) Martin Glaum Chair for General Business Administration International Management, Accounting and Auditing University of Giessen Remigiusz Wojciechowski Corporate Financial Controlling Bayer AG FinanceCom05 Regensburg, Germany Presentation Outline Challenges of Centralized Multinational Financial Management The Corporate Process Portal Catalysing Financial Management at BAYER Case: Streamlining FX Risk Management with Corporate Financial Portals 2
Challenges of Multinational Financial Management Reporting Coordination Monitoring North America information data Corporate Financial Center data information Asia Pacific Integration information data Services Europe 3 Presentation Outline Challenges of Centralized Multinational Financial Management The Corporate Process Portal Catalysing Financial Management at BAYER Case: Streamlining FX Risk Management with Corporate Financial Portals 4
The Notion of the Corporate Process Portal Single point of access to information, services and applications available everywhere 24/7 using standard web-browser Integration platform and driver of integration initiatives data & systems business processes organizational structures On-demand reporting information aggregation for reporting integrated portal services that reduce information overload reduces time-to-information 5 Corporate Process Portal Architecture Corporate Center State Controller Corporate Process Portal Presentation Portal Model Component Integration Portal Applications Business Services Integration Layer Business Objects, EAI Adapters, etc. Region A Region B 6
Presentation Outline Challenges of Centralized Multinational Financial Management The Corporate Process Portal Catalysing Financial Management at BAYER Case: Streamlining FX Risk Management with Corporate Financial Portals 7 Catalysing Corporate Financial Management at BAYER BAYER 115000 employees working in 350 companies in 57 countries (as of 2004) Headquarters in Leverkusen, Germany Centralized financial management organization Corporate Financial Portal Motivation Provide financial data, services and reports worldwide, 24/7 Streamline processes and increase operational efficiency Provide subsidiaries with value-adding services Ultimately improve data quality 8
The Corporate Financial Portal 9 Foreign Exchange Risk Management Practice at BAYER Define FX risk management targets & practices periodically Identification & measurement of FX exposure Monitor FX exposure FX risk management actions FX Risk Management 10
Streamline FX Exposure Import & Monitoring ERP STP ~ 80% Email/Fax request for individual exposure reports Exposure exposure upload Exposure aggregated on-demand FX exposure reports on corporate level and entity level on-demand FX exposure reports on entity level 11 Hedging FX Risk Intercompany FX Transactions 1. request deal 24/7 2. real-time quotes 1. Request deal 3. save Treasury System 3. save 4. deal confirmation (+hours) deal reports (+days) 2. quotes 4. deal confirmation (+min.) deal reports on demand! 12
Corporate FX Exposure Management Evolution Autohedging Process Redesign Treasury System 13 Overview - Corporate Financial Portal Services Public Services - Official Bayer Rates - Documentations - Affiliates Ov. - Planing - Financial Planning - Cash Forecasting - Cash Planing - Treasury - FX Trades - IR Monitor - Accounts Monitor - Controlling - Backoffice Tools - Personalized Workflow Notifications Intergrated Portal Services Personalized Background Reporting Cofipot Financial Figures 14
Presentation Outline Challenges of Centralized Multinational Financial Management The Corporate Process Portal Catalysing Financial Management at BAYER Case: Streamlining FX Risk Management with Corporate Financial Portals 15 Intercompany FX transactions - CoFiPot vs. Telephone 350 300 Cofipot Telefon Number of transactions 250 200 150 100 50 0 04 12 04 11 04 10 04 09 04 08 04 07 04 06 04 05 04 04 04 03 04 02 04 01 03 12 03 11 03 10 03 09 03 08 03 07 03 06 03 05 03 04 03 03 03 02 03 01 02 12 02 11 02 10 02 09 02 08 02 07 02 06 02 05 02 04 02 03 02 02 02 01 Month 16
The Corporate Financial Process Portal could be established as central point of access to corporate financial information & services Active user basis of more than 250 users The integration initiatives and the flexible process portal framework allows for the rapid implementation of new business processes at BAYER Outlook & next steps Empirical assessment of portal benefits in the context of financial management 17 Thank you 18