Making the Business Case for Treasury Technology

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Tim JohnsonDirector of FinanceGarmin International, Inc.

Dory MaloufTreasury Cash Operations ManagerPulteGroup, Inc.

Bob StarkVice President, StrategyKyriba [email protected]

Introductions

Today’s PresentersTim joined Garmin International as Assistant Treasurer on Halloween, 2005. Tim’s responsibilities at Garmin include global risk management, treasury management, and overseeing U.S. and global income tax concerns. Tim implemented Kyriba in 2011. Tim graduated from the University of Kansas with a Bachelors degree in Accounting and Business Administration and is a CPA. Previous positions include working at a public accounting firm, working as an Accounting Manager and Controller at companies in the K.C. area.

Dory Malouf is a Treasury Cash Operations Manager at Pulte Group Inc. with a professionally recognized career. His team’s accomplishments in treasury technology and process improvement have been featured multiple times in Treasury and Risk Magazine and various AFP periodicals and books. Dory has a proven track record in adding value to an organization through process improvement and treasury technology.

Bob Stark is responsible for global product strategy and market development at Kyriba. Bob is a 15-year veteran in the treasury technology industry having served in multiple roles at Wall Street Systems, Thomson Reuters, and Selkirk Financial Technologies including product management and strategy. Bob is a regular guest speaker at treasury conferences and an active member of the Association for Financial Professionals.

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1) Today’s environment: what types of business cases?

2) Where are the benefits?• Productivity• Financial Controls• Visibility• More effective financial decisions

3) Focus: PulteGroup

4) Focus: Garmin International

5) Summary

Agenda

Topics for discussion


What is the main reason for not implementing new treasury technology?

a) We already have a TMS

b) Excel is the perfect solution

c) Unclear on ROI

d) On the path to building a business case

e) Asked, but was turned down

Audience Question


Today’s environment

• Building a business case can be formal or informal

• Executive approval almost always needed

• Budget isn’t just “handed out” Even if informal, justification often has to be

presented (the “office suite” of applications)

• Justification often involves a mix of quantitative and qualitative benefits

Building a Business Case


Productivity

Financial controls

Global visibility

Effective financial decisions

Value Creation Hierarchy

Single point of data entry• Eliminate re-keying errors• Improve accuracy and

confidence in analysis

Automate repetitive tasks• Shift time from processing to

analyzing• Achieve results more quickly

Streamline reporting• Automate and schedule

preparation and distribution

Treasury as a strategic partner


Productivity

Financial controls

Global visibility



ExamplesStreamlining of payments process- 50 hours / month (25% )

Consolidating Cash Forecast- 80 hours / month (50% )

Automating GL Entries- 4 hours / day (50% )

Multi-bank reporting- 2 hours / day (25% )


Productivity =X Annual FTE Cost

Hours saved8 Hours per day


Improve data integrity• Eliminate reliance on ‘super’

spreadsheets• Standardize processes and

procedures

Controlled workflow• Separation of duties• Reduce SOX audit costs

Centralized audit trails• Improve visibility and

transparency• Better control of workflowProductivity

Financial controls

Global visibility





Productivity

Financial controls

Global visibility




ExamplesNot as easy to quantify!!

Reduce SOX Audit Costs- 50% reduction in time taken

Reduced likelihood of fraud- Cost of fraudulent payment or

bank account- Previous % of event occurring

Reduced likelihood of errors- Cost of error (e.g. broken

formulae, ‘extra’ zero, duplicate payment)

- Previous % of event occurring


Productivity

Financial controls

Global visibility


Cash • Bank reporting• Cash positioning• Forecasting• Liquidity

Financial positions• Investment• Debt• Intercompany • Foreign exchange

Exposures• Foreign exchange• Interest rate• Counterparty• Supply chain




Productivity

Financial controls

Global visibility




Examples

Value of visibility is generally in the decisions it enables

Bank Account Optimization- Visibility into bank accounts- Visibility into bank fees- Visibility into bank reporting= cost/benefit of bank accounts

Identifying idle pockets of cash- Visibility into bank reporting- Can find balances didn’t know

you had (or balances higher than realized)

- More likely for decentralized


Productivity

Financial controls

Global visibility


Excess cash and liquidity• Strategic investing• Debt repayment• Supplier discounts

Treasury movement/analysis• Bank Fee Analysis• Search for liquidity• Netting• Optimal funding/drawdown

(i.e. international)

Risk Management• Better hedging• Trading diversification




Productivity

Financial controls

Global visibility




Examples

Liquidity Optimization- Higher rate of return- More ‘freed liquidity’ to

invest/apply- Or Both

Hedging- CF Hedging: protection easy

to quantify ($100M hedged X 1% volatility avoided = $1M)

- Can calculate historically or proactively (off curve)

Analysis- Bank Fees easy example


Productivity

Financial controls

Global visibility


Treasury as a strategic partnerBuild value through collaborative business partnerships Intelligence Insight Analysis

Examples• Shared service model• Forecasting economic change• Sales enablement• M&A analysis• Market expansion• Business Intelligence



What is your biggest difficulty in creating a business case?

a) Understanding our own needs

b) Aligning benefits to costs (e.g. creating ROI)

c) Seeing ‘more than just productivity’ benefits

d) Putting it all together into an actual document and presentation

e) No difficulties; we’ve got it covered

Audience Question


Focus: PulteGroup

PulteGroup has implemented three treasury management systems over the years, and had a fourth system available as a result of a corporate acquisition

Key Questions

1) What are the drivers to continually update treasury solutions?

2) Is this specific to TMS’ or is this something Pulte does across all technology?


Focus: PulteGroup

Pulte’s latest treasury management solution is cloud-based, delivered using a Software-as-a-Service model

Key Questions

1) How important is cloud technology for Pulte?

2) How do cloud solutions help the business case?


Focus: PulteGroup

Treasury systems offer productivity, improved controls, visibility, and enable better financial decisions

Key Questions

1) What was relevant to justifying the investment in a TMS for Pulte?

2) Did you have to make a formal business case each time?


Focus: Garmin International

PulteGroup treasury seems themselves as a strategic partner to the business and has taken on many responsibilities outside “typical” cash and treasury management

Key Questions

1) What do you mean as a “strategic partner”?

2) How did you get there?

3) Does that help the justification for a TMS?



Since Tim joined in 2005, Garmin has achieved substantial growth, expanding from 3 countries to 35 countries with almost 60 legal entities

Key Questions

1) At what point was treasury technology seen as a necessity?

2) What were your original objectives before selecting a TMS?



After reaching the tipping point, Garmin initiated a vendor selection process to find a treasury management system to meet global needs

Key Questions

1) Why was a TMS decided upon?• What were the other options?

2) What type of solution (e.g. Excel) did you come from?



Garmin had to justify the expense and time spent to select and implement a treasury management system

Key Questions

1) How did you create a business case?

2) Who was involved?



Garmin had to justify the expense and time spent to select and implement a treasury management system

Key Questions

3) What was relevant to justifying the investment in a TMS?• Productivity?• Visibility?• Controls?• Better Financial Decisions?



Technology projects are always approved by someone. Anticipating why they think this is important is key to a smooth ‘green light’.

Key Questions

1) Who approved the business case?

2) Why was it important to them?



Garmin has successfully implemented a TMS and deployed domestically and internationally

Key Questions

1) Are you seeing the visibility you expected?

2) What else have you been able to achieve?


Summary

Productivity is importantOften focused on time savingsCalculate based on cost of FTE

Rarely is the FTE replaced!

Qualitative Benefits also goodEffective financial controls

Establish best practicesBecoming strategic partner

Effective Financial DecisionsVisibility enables better decisions

Generates game-changing ROI

Garmin InternationalVisibility justified project

Allowed other critical process improvements

PulteGroupInnovation delivers business valueEfficiency enables strategic input


Questions?

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Making the Business Case for Treasury Technology

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