Technology Excellence 2010 Transcript

From Treasury & Risk's 15th Annual Alexander Hamilton Best Practices Awards

DONNA MISKIN:  I’d like for the Technology Excellence panel to come on up. First, I want to introduce our moderator. Craig Jeffery is founder and managing partner of Strategic Treasurer, a treasury consulting firm in Atlanta, Ga. With nearly 25 years of financial and treasury experience as a practitioner and consultant, he enables his clients to craft realistic goals and achieve significant benefits.

Prior to establishing Strategic Treasury, he was a senior vice president and practice leader for Wachovia Treasury and Financial Consulting, and before that, vice president at SunTrust Bank and worked at The Hartford.  Greg also is the author of The Strategic Treasurer: A Partnership for Corporate Growth and is often quoted in Treasury & Risk and other publications, but we won’t mention them. Craig.

So, we asked, how often do you receive this from regional offices or headquarters. Two-thirds were not getting cash position information on a daily basis. That’s just plain visibility to where is my cash around the globe, around the country or around the region that I operate.

When we think about using technology and taking advantage of it, one aspect clearly is, ‘I need to get it. I need to have a clean efficient process. I need to have good controls. I need to see everything.’

I think there’s been a fair amount of challenge for ratings that are really historical, and we need to look forward at what’s going on with companies, with countries and leverage that to see what our exposure is as a responsibility to control and manage risks. So we’ve had a number of discussions about that.

So kind of the advanced dashboard, decision support that takes enriched data, that uses the information through an organization, so that you can analyze quickly and rapidly, is essential and vital to the organization moving from kind of a brain stem operational, let’s be straight-through process people and be efficient, to performing high-level analytics, scenario analysis and looking forward. 

Google’s treasury group manages over $4 billion in demand deposits, time deposits and money market funds from five different banks. Needless to say, managing this was not a trivial task. The process was highly manual, and did not have any straight-through processing. Treasury was so busy monitoring their positions that they did not have time to optimize the investments. We realized that something drastic needed to be done. We needed a way to centralize and obtain real-time investment positioning that required little to no resource effort on a daily basis. 

We leveraged our existing relationship with SunGard to implement the Quantum investment module. The process is now fully automated, and the straight-through processing provided a scalable solution that accommodated growth with minimal resource effort. We were able to do this in-house and did not use any consulting firms for this. 

Healthcare in general puts the fun in dysfunctional when it comes to administrative business. Our administrative processes are laborious, complicated, highly regulated, and we strive to reduce not only our cost of care, but our cost of administration of care, knowing that 25% of every dollar that a healthcare organization spends is trying to get paid by the patients or the government. So we need to lower our administrative costs.

Within our accounts payable and purchasing operation, we decided to pursue optical character recognition to make this more efficient, and we’re going to tell you a little bit more about that story as we go forward. 

If you remember, early on I said we put the fun in dysfunctional. We feel that we’re getting past that, and we are advancing the cause of innovating healthcare. Today, we process only 3% of our payments on paper, where two years ago, it was 50% on paper.

Here’s a little before and after in my last slide. Our disbursement FTEs went from 62 to 59. Now, that’s not the entire story. You can see that we actually

We’re here to talk about technology and collaboration, and it’s with these panelists. It’s actually a little funny, the collaboration among the three companies. When I arrived, I was feeling a little jet-lagged, so I Googled jet lag and what came up was Mayo Clinic information, and we’re doing it through a Cisco router. So the collaboration that’s actually going on here is great.

Let’s get started here. So Cisco’s treasury group consists of five functional areas: cash operations, corporate finance, foreign exchange, investments and risk management. Prior to 1999, each group used different applications to perform their day-to-day activities, but in 1999, we started to develop applications that centralized information, tool access, metrics and collaboration.

In addition, it has collaborative features that increase the effectiveness of teams working closely together on common projects and time-sensitive deliverables. 

Here’s an example of the dashboard that’s available for our treasurer, Roger Biscay. IWE, as I mentioned, integrates with Oracle to bring in real-time data, and it also has security features to limit access.

MAIROSE:  Yeah, I’m not sure how much was fun, to tell you the truth.

JEFFERY:  Oh, that’s right. I’m sorry. That’s the Mayo Clinic, ‘We made the fun in dysfunctional.’ That’s right.

MAIROSE:  Relative to this project, the way Mayo works is usually that way, but they told me it would be three years, so I went to the top of the organization, said, ‘I need this,’ and then we worked it backwards. So the ongoing support is a little bit more difficult for me, because you make a lot of IT people mad when you go around the process. But we actually engaged them into the process, and they saw the value that this was bringing to the organization and now they -- the IT group, the other finance departments -- are very engaged in trying to figure out other ways that we can optimize this technology, and we always get very rapid support because the technology has now become core to our payables process. It’s not just an add-on, in that our accruals are more accurate, they’re more timely, bills are processed more timely, and the entire department of finance sees the value in those improvements.

JEFFERY:  We have a question?

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