“Lego has expanded its channels to connect directly with customers, so our treasury now has the ability to handle online and other new forms of payments directly,” said Jesper Broskov, director of treasury, Lego Systems AS in Denmark. The firm has had to overhaul its treasury procedures in order to cope with new direct means of payment, changing consumer behaviour, and in order to recognise, track and use cash more effectively.
“Geography isn’t so important anymore either as technology lets you connect your business around the world much more easily now, even from our remote Danish HQ,” he added. According to Broskov, internal technology changes can drive treasury efficiency improvements via the use of more centralisation, monitoring and connectivity.
Seven Pillars of Treasury
Harjeet Kohli, group treasurer at Indian telecommunications company Bharti Airtel, shared his firm’s response to disruption from “frienenmies” who might partner with his company in some instances, while disrupting its business in other areas. For instance, Apple’s iPhone disrupted mobile network operators’ business model by making them rely more on selling data packages to new smartphone users, rather than traditional phone call or text message revenue.
He advised firms “not to be passive” when such disruption occurs but to instead “seize the chance”, citing his treasury’s success in raising good quality funding from capital markets in countries where Bharti Airtel doesn’t have a presence, as part of a wider internal treasury overhaul.
The Indian corporate treasury launched an ongoing centralisation drive in 2010 to streamline Bharti Airtel’s unwieldy structure, reduce the number of counterparties and increase efficiency. “We did this with what I like to call the seven pillars of treasury, which include capital structure oversight; rating management and strategy and governance retained at a group treasury level.”
The other four pillars that Bharti Airtel created for its 2010 centralisation drive included some new appointments and functions, covering:
- A new head of debt management
- Head of risk and hedging policy
- Working capital management overseer
- A new treasury controller.
“It took two to three years to get the right people into these new roles and for us to get the new structural alignment of our treasury right. But we have it now and are getting the benefits from it,” said Kohli. “The seven pillars of treasury helped us to integrate and advance our firm.”
Bharti Airtel received a commendation for Kohli’s efforts on the project, though the 2014 winner of the EuroFinance Award for Treasury Excellence was SAP SE.
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