France Telecom's Forward Thinker

Raffi Basmadjian, a finance pro included in the 2012 100 Most Influential List, has spent a decade overhauling France Telecom’s treasury and cash management structures.

Ten years is a long time in treasury. But Raffi Basmadjian, France Telecom’s head of group cash management and treasury IT, is nearing completion of a plan he devised over a decade ago to overhaul the company’s cash management and treasury structures. “I drew up a target design 10 years ago and I’m sticking to it, basically,” he says.

Basmadjian’s association with France Telecom dates back more than 20 years. He joined the company upon leaving university in 1991, also the year in which France Telecom became a state-owned company, having previously been part of the French Telecommunications Ministry. This marked the beginning of its privatization (the French state now owns only 26% of the shares), as well as the internationalization of the company, which currently has a presence in 94 countries, including strong positions in the U.K., Spain and Romania.

As Basmadjian points out, it was essential for the treasury to keep up with this international expansion. “Obviously you don’t manage a domestic-only company in the same way that you manage a multinational company.” As a result, France Telecom has continuously taken advantage of the latest treasury technology available, ranging from payment factories to SWIFT for corporates.

In 1998, Basmadjian moved to a French TV broadcasting company before becoming the group treasurer at Global One, a joint venture between Deutsche Telekom, France Telecom and Sprint. France Telecom subsequently bought out its partners, as well as acquiring Dutch network operator Equant.

“At the end of 2001, I had a phone call from the group treasurer of France Telecom,” Basmadjian recalls. “He said that since I was one of the people who helped build the company’s treasury, and since I was also very well acquainted with treasury management in the other roles I’d held, he wanted me to build a state-of-the-art treasury combining everything I had learned from my previous roles.”

Basmadjian took this objective to heart and since then has focused on transforming the company’s cash management and treasury structure. His vision at the outset was to create a treasury management structure centered around three processes: cash pooling, netting and a payments factory.

“As of today, I’ve got 77 subsidiaries in my treasury center and 35 subsidiaries using my system, which makes 112 subsidiaries that are on our treasury management application. I have 197 entities on the netting system and 210 entities in the cash pool,” he explains. “The only thing I haven’t implemented yet is the payment factory.”

Basmadjian says that the economic turbulence of recent years has only given more credibility to the project. “It was a pragmatic, step-by-step approach and we’re in control of everything we have done so far,” he says. “The way in which things have been implemented has evolved slightly over the years. For example, I adapted my design to fit the initiatives developed by SWIFT. But the goals have remained consistent throughout. I’m about 30 subsidiaries away from having everything in my treasury management structure—and completing the target design that I drew up 10 years ago.”

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