act middle east breakfast briefing: real cash visibility
TRANSCRIPT
ACT Middle East breakfast briefing:Real cash visibility
Wednesday 9 May 2018
Sponsored by Hosted by
Gary Slawther FCTTreasury DirectorArabtec Holding
Chair’s opening remarks
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ACT Middle East breakfast briefing:Real cash visibility
Wednesday 9 May 2018
Sponsored by Hosted by
Khadija AliSenior Vice President –Corporates & Service ProvidersDIFC
DIFC welcome address and update
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ACT Middle East breakfast briefing:Real cash visibility
Wednesday 9 May 2018
Sponsored by Hosted by
Roger BaroutijanManaging DirectorKyriba
Kyriba welcome
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Roger Baroutjian, Managing Director
Kyriba’s 4 pillars
Know• Cash and liquidity• Bank fee analysis• Business intelligence
Grow• Supply chain finance• Liquidity performance• Receivables management (coming)
Protect• Hedging• Bank account management• Payment fraud detection
Move• Payments• Format transformation• Multilateral netting
CFO mandates, Deloitte 2017
1. Liquidity risk management
2. Steward for risk management for the company
3. Access to capital markets to finance growth
4. Strategic advisor to the business
5. Value-add partner to the CFO (e.g. support or drive M&A activity)
6. Low cost, efficient provider of services
7. Creation of scalable treasury organization to support company growth
8. Leading, governing and driving working capital improvement initiatives
9. Enhanced governance and control over domestic and overseas operations
10.Becoming a profit center (e.g. perform proprietary trading & ability to directly improve
bottom line)
Strategic challenges for treasury organisations
Deloitte 2017
Cash visibility
Liquidity
Inadequate treasury system
2018 trends
SaaS TMS is gaining significantly over on-premise TMS (32% market share)
Treasurers are expected to:
Do more to support the business strategy
Deliver greater cash efficiencies through capital management
Become a profit center
Deal with new regulations:
Hedging (ASC 815/ IFRS9)
Lease accounting (ASC 842 / IFRS 16)
Address cash security and payment fraud (2017, worst year for successful fraud attempts, $16.6B with $125k Ave/attempt)
Deploy automation and advanced analytics for cash, payments, SCF, and risk
© 2018 Kyriba Corp. All rights reserved. | Proprietary & Confidential. 13
Tomorrow20182015201020052002
Functional complexity
Tactical Strategic
Cash and liquidity
PaymentsRisk
management
Supply chain
finance
Forecasting
Fraud detection
Lease accounting
Business intelligence
SaaS platform
APIs
Machine learning
Liquidity performance
Robotic process automation
Distributed ledgers
Receivables management
Kyriba’s product vision
Debt and inv
FX
Strategic initiatives
Liquidity performance examples
BlackRock investment, ($30T) in assets
Will deploy Kyriba with its clients.
CFO’s will seamlessly “SEE CASH”, “PROTECT CASH” to “GROW CASH” with Kyriba.
CFO’s will identify a $10M currency exposure in Kyriba
Right click and hedge the exposure
A Pre-Order is created in Fxall
The trade is executed
The exposure is fully hedged
Machine learning:
Cash: reconcile automatically bank transactions and cash flows
Fraud detection: detect anomalies based on the payment history
Robotic process automation:
Automate processes between systems such as invoice matching
Distributed ledger:
Connecting to BC payment providers such as Ripple
Funded invoices, etc.
Receivable Management:
HSBC receivable funding, etc.
THANK [email protected]
ACT Middle East breakfast briefing:Real cash visibility
Wednesday 9 May 2018
Sponsored by Hosted by
Shweta BhasinGroup Financial ControllerMattex Group
Case study 1: Results day-to-day
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❖Dubai, UAE
❖Jeddah, Saudi Arabia
❖Eton, GA, USA
❖Jeddah, Saudi Arabia
❖Eton GA, USA
❖Abu Dhabi, UAE
❖Al Jubail, Saudi Arabia
AGENDA
123456
ACT Middle East breakfast briefing:Real cash visibility
Wednesday 9 May 2018
Sponsored by Hosted by
Ashish KrishnaManager Corporate TreasuryAmericana Group
Case study 3: Making the connection with your banks
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Making the connection with your banksAshish KrishnaCorporate TreasuryKuwait Food Company (Americana)
Americana: A leading food company
Network of over 1,800+ outlets
KFC, Pizza Hut, Hardee’s, T.G.I. Friday's, Krispy Kreme, etc
One of the largest food manufacturing and restaurant Companies in the MENA
RESTAURANTS FOOD
A portfolio spanning 10 leading brands
California Garden, Americana Meat, Farm Frites, Koki, etc
Decentralised treasury: the challenge
PRESENCE MANAGEMENT BASIC INEFFICIENCIES
13 countries
50-100 subsidiaries
50-100 different bank relationships
500-1000 bank accounts
Multiple versions of ERP
Bank relationships managed locally
Finance personnel are not treasury experts
No benchmarking• High and very different
bank charges• High and very different
funding rates
No cost benefits from scale
Unwanted credit facilities
Unwanted manpower
Where to start?
Cash visibility
Why cash visibility? My story
• Reduction in FX transaction Costs• Netting of exposures• Optimal hedging
What can we do with just an access to all bank statements?
Efficient allocation of cash Bank rationalisation Increases control
Pooling
Reduction in credit facilities
Close the accounts in use
Negotiate transaction charges
Track compliance to internal policies
What if ERP is integrated as well?
Cash forecasting FX exposure management Manhour reduction
Improvement in liquidity
Reduction in facilities
Netting of exposures
Reduction in hedging and FX costs
Auto bank reconciliation
Auto sales reconciliation
How to get cash visibility? Cloud? Kyriba? My perspective
What did we exactly need?
1. Not just timely access to data but a system that can be customised to present the data for a meaningful analysis
2. Easy and very fast to set up, not dependent on ERP and IT systems of the entities
3. Should be scalable and modular with the ability to add • Basic cash visibility dashboards• Bank management and comparison of charges• ERP integration for:
• forecasting cash• Identifying net FX exposure
• Credit facilities and debt management
Banks are not yet there… A proven cloud based TMS is the solution!!!
ACT Middle East breakfast briefing:Real cash visibility
Wednesday 9 May 2018
Sponsored by Hosted by
Abdessalem LassouedGroup TreasurerOiLibya
Case study 4: Building the business case
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OILIBYA Group
www.oilibya.com
OILIBYA Group
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OILIBYA is key player in the African energy industry providing
products and services for retail, commercial, aviation and
marine:
� Headquartered in Dubai
� Operates in 18 countries
� Over 1,500 diverse employees, around 20,000 indirect jobs,
� 250,000 customers per day through 1100 service stations
� 8 blending plants
� 60 Fuel terminals
� 54 Airports across Africa
� 34 Affiliates
� +100 Banks
� +20 Currencies
Challenges driving the decision
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� Treasury functions done manually and decentralized:
⇒No visibility of consolidated cash overview
� Very limited bank connectivity: the affiliates are using bank portals and alternatively physical bank statements to consult the balances and to reconcile the bank flows
⇒Not seeing all cash balances on a timely basis
� The cash position and forecasting are done manually on spreadsheet
⇒Lack of accuracy
⇒No detailed measurement of effectiveness
⇒No reliable analysis of variances
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� Cash picture and forecasts built up based on downloads from different banks and tools:
⇒Significant workload and time consuming disabling timely
⇒Significant margin of error
⇒Useless data for decision when arrived too late
� Thousands of bank entries related to charges are controlled manually :
⇒Significant margin of error
⇒No accurate control of value date
⇒No visibility on the real bank charges
Is there internal resistance to the project ?
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No internal resistance when the Treasurer – the project leader- is duly armed with:
� Detailed business case inspired from the real challenges of the Company supported by real statistics
� Realistic presentation of the expected benefits
� Detailed project charter presentation outlying all the responsibilities and roles of all the stakeholders
� Detailed project schedule
� Anticipated risks and proposed plans B & C
� Anticipated change management impacts
� Adequate Budget
Internal resistance ?
How to find-out the impact of the non-cash visibility on the business-
case ?
9
Using the Japanese approach “San Gen Shugi” might be very helpful to detect out the below:
What are non-cash visibility figures in my organization ?
� Non available bank cash balances
� Not seeing daily cash position before 10 am
� No cash forecasts and late cash report
� No accuracy of data or unusable data
� Impossibility to confirm the bank charges
� No visibility on short term liquidity risk
� No visibility on real FOREX exposure
� Significant manual workload and lot of spreadsheets
How to detect weaknesses related to non-cash visibility ?
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How much does the non-visibility cost ?
� Cost of not positioning the cash in time
� Cost of not investing the exceeding cash
� Cost of not anticipating the cash needs and looking for urgent financing solution
� Cost of not controlling the financing costs applied by the bank
� Cost of not re-negotiating the financing conditions because of lack of information
� The potential saving in FTE
� Cost of probable business disruption
.
No-cash visibility cost?... Sequence to consider:
Internal buy-in.. ?
Easy buy-in.. How ?
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• Demonstrate the continuous hidden costs of non cash visibility and the global hidden costs of not implementing a Treasury System
• Real value added and tangible benefits
• Detailed outcomes
• Reasonable budget matching with the targeted savings
• Quick ROI: 3 years would be ideal
(10% of saving on financial costs ~ project cost for 2 years)
Why KYRIBA.. ?
Why KYRIBA ?
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�Matching with technical requirements related to: Cash management, Reconciliation, Reporting, Risk management, Centralization …
�Provides timely cash visibility for our multi-complex environment and centralized treasury enabling timely global overview of the treasury reporting and risk exposure
�Cloud based solution:
⇒Adequate for organization with limited IT resources
⇒Flexibility of implementation for multi-countries organization
⇒We focus on the optimization of our treasury function instead focusing on technical issues and maintenance
Expected results ?
Main outcomes
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Business case for a Treasury Management System has been established. It took a holistic approach in evaluating three key areas in OILIBYA TMS Project :
I. Risk Mitigation , Compliance & Fraud Avoidance
II. Time, Efficiency & Financial Gains
III. Total combined Financial ROI
Expected results ?
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• Improving cash visibility thanks to timely cash report
• Early detection of liquidity risk and timely treasury decisions
• Reliable budget and cash forecast management enabling adequate cash decision
• Potential financial saving: (estimate saving of 10% of financing cost)
• Better control of bank fees
• Saving time and efficiency thanks to better visibility on forex exposure and trade finance management
• Secured transfers and saving time and costs of tracking
• Workload optimization may achieve 80%
Thank You !
ACT Middle East breakfast briefing:Real cash visibility
Wednesday 9 May 2018
Sponsored by Hosted by
Facilitated by:
Gary Slawther FCT, Treasury Director, Arabtec Holding
Panellists:
Shweta Bhasin, Group Financial Controller, Mattex Group
Ashish Krishna, Manager Corporate Treasury, Americana Group
Abdessalem Lassoued, Group Treasurer, OiLibya
Mona Lockett, Head of Treasury, Webcor Group
Anjan Mukherjee, Finance Director, Al Reyami Group
Panel discussion: Is it time to abandon spreadsheets?
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ACT Middle East breakfast briefing:Real cash visibility
Wednesday 9 May 2018
Sponsored by Hosted by
Gary Slawther FCTTreasury DirectorArabtec Holding
Chair’s closing remarks
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