The Microsoft treasury department has been shortlisted by the Association for Financial Professionals (AFP) for its 2009 Pinnacle Awards, in the Innovation category. Despite its size and financial strength, Microsoft is far from immune from the effects of the shocks to global financial markets and the necessity of having a laser focus on cash optimisation. The treasury team at Microsoft chose to tackle the toughest challenge faced by many treasury professionals, producing a robust, accurate, consolidated global cash forecast.
This was no small undertaking as the global liquidity forecasting solution developed needed to encompass over 1,000 bank accounts, in 350 subsidiaries, 80 currencies, 120 countries and over 120 bank relationships, all the while being cost-effective, simple to implement, and providing the greatest return on investment (ROI) for its shareholders. The solution developed by the treasury team involved turbo charging its treasury workstation with internal Microsoft products, such as Live Meeting, SharePoint and its Office suite of products. The treasury team led the initiative to develop processes that allowed all of these products to work together seamlessly to create a unique business intelligence solution for enhanced global liquidity management. The story of the successful development and deployment of the technology behind the solution is not so much about existing technologies, it is really about Microsoft being able to bring them together to drive innovative processes and deliver truly synergic results by being used together for a new business purpose.
Christy Barwick, senior financial manager at Microsoft, was the architect of the solution in conjunction with Anita Prasad, general manager, treasury capital management. When Barwick was asked what the one thing that she would like to share with other financial professionals about their solution would be, she said: “Having a well defined plan and sponsorship from executive team is critical to the success of large cross-group efforts. Another critical aspect for success was the collaboration across treasury teams and various partners in business teams across the globe. Open and timely communication helped garner the support needed to drive this project to success.”
The power of Microsoft’s achievement is evident on many levels and evidenced specifically as follows:
- The initiative has resulted in the reduction of approximately 1000 employee hours per month and 12,000 per year across 250 subsidiary controllers.
- The solution has also allowed Microsoft to move to bi-monthly funding, which has increased their cash in portfolio by almost US$500m that otherwise would sit with subsidiaries earning zero return.
- Microsoft has the flexibility to create custom reports and filters enabling the treasury team to look at daily, weekly and monthly views of their exposure to various financial partners worldwide to adjust risk parameters and mitigate risk on a timely basis.
- A culture of accountability has been created, as subsidiary controllers now have visibility in regards to how their inputs/forecasts drive the corporate cash balance.
When asked what it meant to the treasury department and Microsoft to be recognised as a Pinnacle Award Category winner, George Zinn, corporate vice president and treasurer, responded: “We believe that AFP’s Pinnacle Award is a highly regarded achievement within the treasury community and a fantastic channel for showcasing our Microsoft technology-based cash forecast solution. Anita and Christy did a great job in driving this initiative and building cross-functional support. Microsoft treasury’s ‘Lifecycle of the Dollar’ framework is about gaining better visibility to current and future cash flows in order to accelerate the velocity of a dollar within the system. In this situation, we have improved the cash flow forecasting process by transforming raw data to meaningful and insightful business intelligence, adding significant value.”
You can learn more about Microsoft’s Innovative solution directly from Christy Barwick and Anita Prasad at the AFP Annual Conference.
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