When you have a holding company, it’s best to take advantage of it. Omnicom Group’s more than 1,500 ad agencies worldwide were spending $147 million on equipment leases in 2001. Each lease was negotiated by a local agency with one of more than 350 leasing companies.
No one had a comprehensive view of equipment prices or the financing rates, and hence their competitiveness, says Eric Huttner, assistant treasurer at $12.5 billion Omnicom.
So the marketing and communications giant implemented a global leasing system powered by OnBase software and customized by Computer SI that allows treasury to arrange all leases and negotiate financing rates and other terms. “All they have to do at the agency level is sign documents that have been pre-negotiated,” Huttner says.
That means, however, that the proper equipment must arrive on time, or the central treasury may face mutinies. To ensure efficiency, Omnicom dramatically reduced the number of leasing companies it uses to 15 globally. And it implemented an electronic system that automates proposing, approving and processing leases, as well as accounting and records.
Leasing companies transmit data files and documents to close out pending leases and Omnicom agencies can view all their lease documentation, accounting schedules, and compliance and internal reporting data. In addition, treasury has a dashboard that provides daily updates on the company’s worldwide lease status. “I get a report every day saying this is how much money we owe for leases, their average tenor and cost, and the average interest rate,” Huttner says.
The workflow approval process starts with the leasing companies entering documentation and data, which are then approved by the local agency as a safety check before the central office confirms the vendor and leasing company are authorized.
“The leases flow very smoothly,” Huttner says. “We’ve never had an agency call us and say, ‘You didn’t approve my lease in time.’”