You Ain’t Seen Nothin’ Yet!
Unleashing the Power of Treasury
Robin Veariel Working Capital Advisor [email protected]
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Agenda
- Introductions - Treasury Transformation - What is Strategic Thinking - Components of Building a Strategic Organization - Discussion
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Introductions
Robin Veariel Working Capital Advisor Bank of America Merrill Lynch
Stephanie Allen Director of Treasury Research Now Group, Inc.
Rob Whitaker VP, Finance and Treasurer TTS LLC
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Transforming Treasury
Transactional “Transaction Processor”
• Making payments • FX purchases or sales • Cash movements
Advisory “Data Analytics Provider”
• Spend Analysis • Investment Options Analysis • Risk Management Advice
Strategic “Forward Looking Strategist”
• Cap Structure Planning • Interest Optimization • Acquisitions/Divestitures
Transform the Treasury Organization from Transactional to Strategic
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What is Strategic Thinking?
Defining STRATEGIC THINKING
The application of unique business insights and opportunities intended to create competitive advantage for an organization
According to a study published in Chief Executive Magazine, the most valued skill in leaders today is strategic thinking. However, more than half of all companies say that strategic thinking is the skill their senior leaders most need to improve. Horwath, 2014
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Strategic Thinking: a Four Piece Puzzle By Bill Birnbaum
FOCUS: Don’t try to accomplish “everything” MARKETS: Develop intimate knowledge of your markets and customers
PROCESS: Carefully manage your processes PEOPLE: Care about and nurture your people
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Building a Strategic Organization
Create an environment of
strategic thinking
Facilitate strategic thought
Develop a strategic
vision
Develop a strategic
plan
Implement the plan
Are people
empowered
to think
strategically?
Lead the
discussion!
What are your
goals?
What steps are
necessary to
meet your goals?
How do you
manage
CHANGE?
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Creating the Environment
BREAKDOWN SILOS
CREATE CROSS FUNCTIONAL TEAMS
EMPOWER AND EXPECT
BUILD TRUST/ALLOW RISKTAKING
INTRODUCE DIVERSITY
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Begin Thinking Strategically
DETERMINE PLAYERS AND GAME
PERFORM SWOT ANALYSIS
LOOK FORWARD, REASON BACK
ANALYZE DATA/FACTS
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Develop Strategic Vision
DEFINE THE GOAL
WRITE MISSION STATEMENT
GET EXCITED!
COMMUNICATE… A LOT!
INSPIRE OTHERS
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Develop Strategic Plan
WHO NEEDS TO BE INVOLVED?
WHAT RESOURCES ARE NEEDED?
WHAT ARE TASKS? BY WHOM?
WHAT IS TIMELINE?
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Implement the Plan
DETERMINE CONSTITUENTS
BUILD CONSENSUS
COMMUNICATE…A LOT!
CREATE IMPLEMENTATION TEAM
TRACK PROGRESS
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Panel Dialogue
Working Capital Improvement Initiatives
Research Now Company Snapshot Leader in Global Digital Data Collection
▪ We build and manage panels on the web and through
mobile and social media in order to capture global consumer and business professional behavior and attitudes
▪ Founded in 1999
▪ Headquartered in Plano, TX
▪ 25 offices across 17 countries
▪ 1,300+ employees
Our Brands
6+ million Enrolled panelists in 38 countries
50 million
people can be accessed globally through social media partnerships
300+
Profile dimensions
Over 3,000 customers globally and employ 1,300+ employees in 25 offices around the world Research panels with over 6 million members in 38 countries
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Seattle
San Francisco
Los Angeles
New York
Toronto
Chicago
Dallas
Mexico City
Sao Paulo
London Paris
Rotterdam
Madrid Milan
Hamburg Frankfurt Munich
Athens
Mumbai
Shanghai Tokyo
Singapore
Melbourne
Sydney Auckland
Sales and Customer Services
Sales Only
Sales and Operations Hub
Delhi
Panel locations
Research Now
Global Capabilities with Locations Worldwide
Treasury Challenges
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My Background
Treasury Manager/Asst. Treasurer – private food brokerage company
Challenge: Cash application led to Accounts Receivable and Credit Collections
reporting to Treasury
Asst. Treasurer, Capital Markets – 3rd largest hospital management company
Challenge: Large M& A pipeline led to Treasury responsible for Corporate strategic
forecasting model
Director of Treasury & Risk Management – newspaper publication company
Challenge: inherited responsibility of managing shareholder services, insurance,
Pension and 401K investment strategy
Director, Treasury – global online market research company
Cash receipts lag led to developing working capital targets and
researching billing process to reduce Cash Conversion Cycle (CCC).
Current Focus/Challenge from CFO
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To provide timely, accurate & meaningful reporting & analysis
(…..that provides management insight and informs business decisions)
“Why are we exceeding budget but having liquidity problems?”
“Why are we having such large cash outflows in working capital?”
“I don’t want happy suppliers!”
Led to responsibility of Working Capital:
⁻ New working capital report to be pushed out to Region to reflect Cash Conversion Cycle (CCC) tracking and goals
⁻ Working capital task force analyzing solution to billing process pain points
⁻ AR and AP Terms/DPO improvement (manage disconnect)
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Treasury
“Revenue is vanity…..margin is sanity……cash is King.”
- Source Unknown
Rob Whitaker – VP Finance & Treasurer
TTS, LLC – VP Finance & Treasurer (joined TTS in 2010)
Reddy Ice – Assistant Treasurer
Triad Financial – Director of Structured Finance
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Third Party Logistics Provider
Logistics Consulting Services Lead Logistics Provider
Benchmarking
Transportation Procurement
Network Analysis and Design
Professional Services Consulting
Full Transportation Outsourcing
Transportation Provider Contracting
Inbound Freight Management
Freight Bill Audit and Payment
Capacity Provider Technology
Single Source
Brokerage
Spot Market
Dedicated Fleet
On-demand TMS
Optimization
Highly Configurable
Rapid Implementation and Integration
TTS provides a comprehensive brokerage platform
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TTS Agent Footprint
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2006 through 2013 : Growth
-
10
20
30
40
50
60
70
80
2006 2007 2008 2009 2010 2011 2012 2013
Cumulative Annual Net Agents Added
($ in millions) 22% CAGR
10.0%
10.5%
11.0%
11.5%
12.0%
12.5%
13.0%
13.5%
14.0%
2006 2007 2008 2009 2010 2011 2012 2013*
$-
$100.0
$200.0
$300.0
$400.0
$500.0
$600.0
Revenue Gross Margin $ % of Revenue
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2006 through 2013 : Growth Mix
($ in m
illio
ns)
$-
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
2006 2007 2008 2009 2010 2011 2012 2013
International Operations
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Receivables – Cash Posting Challenge
$525 million revenue – 350,000 shipments (average invoice of $1,500)
Started to see delay in posting cash receipts (manual process)
– Increase in DSO (invoice and post $10 million a week)
– Inefficiencies in collection activity
– Large unapplied cash balances
– Customer service issues
Solution – Intelligent Receivables or AR matching process to link our lockbox
and operating system
– AR detail file uploaded to bank
– Intraday process to work exceptions
– Nightly upload from bank to operating system for any matched or
resolved exceptions.
Results
– In testing last few weeks, go live this weekend
– 50% match (higher with exceptions resolved)
– Lower DSO, more efficient collections, time to work true “issues”
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Conclusion
The C-suite is asking that treasury and finance teams play a more strategic role, being a broader partner within the
organization. Treasury has opportunities to generate significant value through projects related to:
•Best practices
•Financing programs •Support of M&A transactions •Management of corporate risk
•Management of global supply chain
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Bibliography
Thinking Strategically: the Competitive Edge in Business, Politics and Everyday Life By Avinash K. Dixit and Barry J. Nalebuff, W.W. Norton, 1991 Strategic Thinking: a Four Piece Puzzle By Bill Birnbaum, Douglas Mountain Publishing, 2004 Competitive Strategy: Creating and Sustaining Superior Performance By Michael Porter, The Free Press, 1985 Elevate: The Three Disciplines of Advanced Strategic Thinking By Rich Horwath, John Wiley and Sons Inc., 2014 How Successful People Think: Change Your Thinking, Change Your Life By John C. Maxwell, Hackett Book Group, 2009
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