You Ain t Seen Nothin Yet! Unleashing the Power of Treasury. Robin Veariel Working Capital Advisor

Transcription

1 You Ain t Seen Nothin Yet! Unleashing the Power of Treasury Robin Veariel Working Capital Advisor robin.veariel@baml.com

2 Agenda - Introductions - Treasury Transformation - What is Strategic Thinking - Components of Building a Strategic Organization - Discussion 2

3 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 3

4 Transforming Treasury Strategic Forward Looking Strategist Advisory Data Analytics Provider Cap Structure Planning Interest Optimization Acquisitions/Divestitures Transactional Transaction Processor Spend Analysis Investment Options Analysis Risk Management Advice Making payments FX purchases or sales Cash movements Transform the Treasury Organization from Transactional to Strategic 4

5 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,

6 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 6

7 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? 7

8 Creating the Environment BREAKDOWN SILOS CREATE CROSS FUNCTIONAL TEAMS EMPOWER AND EXPECT BUILD TRUST/ALLOW RISKTAKING INTRODUCE DIVERSITY 8

9 Begin Thinking Strategically DETERMINE PLAYERS AND GAME PERFORM SWOT ANALYSIS LOOK FORWARD, REASON BACK ANALYZE DATA/FACTS 9

10 Develop Strategic Vision DEFINE THE GOAL WRITE MISSION STATEMENT GET EXCITED! COMMUNICATE A LOT! INSPIRE OTHERS 10

11 Develop Strategic Plan WHO NEEDS TO BE INVOLVED? WHAT RESOURCES ARE NEEDED? WHAT ARE TASKS? BY WHOM? WHAT IS TIMELINE? 11

12 Implement the Plan DETERMINE CONSTITUENTS BUILD CONSENSUS COMMUNICATE A LOT! CREATE IMPLEMENTATION TEAM TRACK PROGRESS 12

13 Panel Dialogue Working Capital Improvement Initiatives 13

14 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 300+ Profile dimensions 6+ million Enrolled panelists in 38 countries Our Brands 50 million people can be accessed globally through social media partnerships

15 Research Now Global Capabilities with Locations Worldwide Seattle San Francisco Los Angeles Chicago Toronto Dallas New York London Paris Madrid Rotterdam Milan Hamburg Frankfurt Munich Athens Delhi Shanghai Tokyo Mexico City Mumbai Singapore Panel locations Sales and Operations Hub Sales and Customer Services Sales Only Sao Paulo Melbourne Sydney Auckland Research panels with over 6 million members in 38 countries Over 3,000 customers globally and employ 1,300+ employees in 25 offices around the world 15

16 16 Treasury Challenges 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 3 rd 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).

17 17 Current Focus/Challenge from CFO 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)

18 18 Treasury Revenue is vanity..margin is sanity cash is King. - Source Unknown

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20 Rob Whitaker VP Finance & Treasurer TTS, LLC VP Finance & Treasurer (joined TTS in 2010) Reddy Ice Assistant Treasurer Triad Financial Director of Structured Finance 20

21 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 Single Source Brokerage Spot Market Dedicated Fleet Technology On-demand TMS Optimization Highly Configurable Rapid Implementation and Integration TTS provides a comprehensive brokerage platform

22 TTS Agent Footprint 22

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24 2006 through 2013 : Growth 14.0% 13.5% 13.0% 12.5% 22% CAGR $600.0 $500.0 $400.0 ($ in millions) 12.0% $ % 11.0% 10.5% $200.0 $ % * $- Revenue Gross Margin $ % of Revenue Cumulative Annual Net Agents Added 24

25 ($ in millions) 2006 through 2013 : Growth Mix $35.0 International Operations $30.0 $25.0 $20.0 $15.0 $10.0 $5.0 $

26 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 26

27 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 27

28 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,

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