Corporates Seeing Benefits from Centralised Treasury Operations, Finds BofA Merrill Survey

Companies are seeing a positive impact from centralising treasury operations, according to a poll of clients conducted by Bank of America Merrill Lynch (BofA Merrill).

A poll of nearly 50 clients attending the shared service centre (SSC) conference hosted recently by BofA Merrill in Chicago, which discussed ideas and best practices about global operating models and SSCs that serve a company’s global operations, produced the following findings:

• For 52% of respondents, centralising treasury operations exceeded their expectations for delivering tangible benefits.

• Half disagreed that an Asian treasury operation can be effectively managed from Europe.

• Nine out of 10 disagreed with the statement “if we centralise we lose control of processes and outputs – controls, service delivery and quality”.

• Only 26% agreed that US multinational companies are managed as global companies, as opposed to US companies with international operations.

“The collective message from our clients is that they view centralising treasury operations as beneficial, but regional centralisation may be preferable to total global centralisation in some cases,” said Paul Simpson, head of global transaction services at BofA Merrill. “Most believe they still have progress to make toward operating a true global operating model and mindset.”

Conference presenters included Ed Scott, treasurer of Caterpillar, who explained what led the company to establish SSCs as part of its global operating model. “For Caterpillar, the 2008 financial crisis drove change and a refocus on cash flow, including generating cash from working capital,” said Scott. “In regards to SSCs, the key elements of our successful deployments included processes that were rules-based, well documented and enabled by effective technology platforms. Timing of deployment was best during business expansion when work could be transitioned to SSCs at a time when the people displaced by the transfer could be moved to different positions.”


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