Improvements have included a dedicated trading app, where approved requests are split, netted or blocked before being forwarded electronically to the appropriate trading platform automated intraday cash reconciliation and offshore FX transactions that are automatically routed to bank portals when regulations require it. Dubbed Project Emerald, the initiative has migrated treasury’s processes to an SAP treasury workstation, reengineering as many as 80 processes and automating about 90% of them end-to-end.Īlphabet’s new, customized treasury system went live in May 2019 and new functionality has been added since then. To keep up with demands on its treasury operations, Alphabet has partnered with SAP to “co-innovate” solutions and re-engineer the function. With its brands including the Google search engine, YouTube, Gmail, Google Cloud, Chrome and Android, Alphabet has enjoyed rapid growth, from $450 million in cash and investments on its balance sheet to $120 billion since its IPO 15 years ago. To be proactive in their response to FX volatility, Robert says companies will need to better integrate FX within their treasury systems.īEST CORPORATE IN THE WORLD FOR FX MANAGEMENT Alphabet (Partner: Citi) The impact on existing hedging programs, exchange rates, supply chains, customers and margins, not to mention profit-and-loss volatility and the very real possibility of bankruptcy, require deft and nimble solutions. “They are constantly requesting additional information from the CFO and treasurer,” says Robert, “such as ‘what will happen if our client doesn’t pay in time?’ or ‘what happens to our suppliers if we get disruptions?’ So there are a lot of simulations which are needed of the treasurer that they didn’t have before and there is an urgency to answering these questions.” Given the strains the pandemic has created, day-to-day operations-including cash flow-is commanding more direct involvement from the board, underscoring the need for better FX analysis. “You need to be able to analyze your FX and come to a conclusion on what is your risk and exposure and how that impacts on your profit and loss and whether you need to protect your exposure by hedging.” “FX is complex and not very well managed by companies,” says Jean-Luc Robert, CEO, Kyriba, a treasury software provider. That means a greater investment in technology: something Global Finance’s 2021 Best Corporate FX winners have focused on intensely.Ī report by Technavio, a UK research and advisory firm, projects that the global treasury and risk management software market size will grow at a compound annual growth rate of 5% through 2024, while according to a report by Fidelity National Information Services, two-thirds of treasury executives plan to increase their investment in digital treasury technology this year. To keep cash flow humming amid operational disruption and a global economic slowdown, treasury departments need to dig deep to provide real-time cash visibility and dynamic forecasting that enables strategic decision making. The global Covid-19 crisis has highlighted failings in foreign exchange risk management strategies as well as the importance of FX workflow automation, given that corporate treasurers are now largely working from home.
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