From the November 2011 issue of Treasury & Risk magazine

Gold AHA Winner in Technology Excellence

Expanding payments infrastructure, improving cash forecasting: Google

Frank Chow, business systems analyst; Tejinder Mann, manager, business systems integration; and Ranidu Lankage, business systems integrator Frank Chow, business systems analyst; Tejinder Mann, manager, business systems integration; and Ranidu Lankage, business systems integrator

Google recaptures gold for its work to automate treasury functions by choosing best-in-class systems from third-party vendors and integrating them in a way Treasurer Brent Callinicos describes as “very unique and ‘Googly.’”

Two years ago, Google won the top technology excellence award for integrating seven vendor solutions, and last year it took bronze for more pinpointed efforts. This year’s award covers five treasury initiatives, which include expanding Google’s payment infrastructure to cover non-treasury payments, using the Continuous Linked Settlement (CLS) service to cover all fixed-income transactions, and enhancing SunGard’s AvantGard Quantum software to improve cash forecasting.

Callinicos calls automating the reporting system, which integrates data from 14 internal and external sources, and expanding its compliance system to cover internal and external portfolios especially important.

In treasury and across the company, says Callinicos, Google’s strategy is to implement flexible systems with the capacity to handle its business three years in the future—whatever form it may take. Applying that strategy to servers, for example, allowed the company last year to turn on processing-intensive Google Instant, which shows search results as users type, even though that functionality was never envisioned when the servers were implemented years before.

Likewise, Google’s new reporting system far exceeds its current needs. “I don’t want to rip out systems to put in new ones,” Callinicos says. “I want to be able to put my foot on the accelerator and go even faster.”

Google had installed top-notch but siloed reporting systems. However, holistically viewing cash, credit risk, swap collateral status and other key factors required finding the appropriate person or logging into separate systems. Now, Callinicos receives electronic reports at 8 a.m. sharp and on demand throughout the day that summarize those areas. He can see Google’s current exposure to Europe, for example, and drill down to the details.

Equally timely reports are customized for other Google executives as well as traders.

“A few years back, we had 50% visibility into our cash and it took eight hours for that data to arrive; now we have 98% to 99% visibility and it’s in real time,” Callinicos says.

On the compliance front, Google implemented a State Street compliance offering. The company went from limited, spreadsheet-based visibility into the compliance status of its nearly $40 billion in internally and externally managed investments, to 100% coverage of all investments.

The new compliance system—like the reporting system—is designed to handle current activity as well as whatever the next three years bring. For example, Google is building a new, automated portfolio system that will facilitate investing in more asset classes and likely allow an increase in trading volume and additional traders.

“Every time you add people, systems and programs, you increase the compliance burden,” Callinicos says.

Google’s compliance system, however, will be able to handle it without major upgrades, as it automatically passes trades through 530 compliance tests. And the new reporting functionality will provide executives with nearly real-time visibility into potential violations. Increasing automation furthers the “Googly” goal of bringing systems together and generating gains in productivity, cost savings and even new revenue opportunities.

Callinicos points out that automating compliance, and especially reporting, gives greater visibility into the status of Google’s cash, allowing the company to reduce its cash and apply that resource more effectively elsewhere.

“I can give it to the portfolio management team to manage for a higher rate of return,” Callinicos says.

 

Read about the Toyota Financial Services project that won the silver in the Technology Excellence category here and the Omnicom project that won the bronze here.

 

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