From the November 2008 issue of Treasury & Risk magazine

Bronze AHA Award Winner in Corporate Governance

On the whole, treasuries don't get involved in sourcing issues. But that's changing. As the guardians of compliance, governance and risk management standards, their influence is spreading across departmental borders. At Allianz of America, for example, treasury successfully led an enterprise-wide cost-reduction and process improvement sourcing program last year.

Project Synergy Drive (PSD) united seven independent companies under a new, centralized governance umbrella for legal, financial and executive signoffs.

A complex job under the best of circumstances, Allianz' mission, launched in late 2006, was complicated by the fact that only two of the seven companies, Allianz Life Insurance and Fireman's Fund, have a formal shared services agreement. And while all the businesses have complementary organizational and expense profiles, the federated and complex nature of reporting structures made top-down initiatives challenging, notes Jill Paterson, Allianz of America CFO.

Nonetheless, under Paterson's direction, a 24-person team, including experts from IT, finance, legal, governance, strategic sourcing and HR, led the 18-month project to its successful conclusion--on target to exceed the $150 million savings goal on $2 billion in combined spending.

To provide some structure to the monumental, task, the cross-company team created four key groups to manage various aspects of the drive. The executive steering committee, including CEOs and CFOs, ensured the initiative was on track to achieve Allianz of America's goals.

The champions group of senior finance representatives broke through internal roadblocks, made sure critical resources were available and set work priorities.

The program office, comprised of treasury leaders and a consulting lead, coordinated activities across 47 workstreams to ensure deadlines and savings goals were met. And project teams, consisting of a consultant and a several subject matter experts, conducted market analysis, developed and syndicated business requirements, solicited bids, negotiated contracts, selected vendors and steered the governance process.

"This initiative established treasury as the center of excellence for sourcing within North American operations," says Paterson. "While no formal reporting relationship exists, we have already fielded requests for support."


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