As the economy tilts treasury priorities toward risk management, technology choices are starting to reflect that. When EADS, the 49.1-billion-euro ($63.7 billion) European aerospace and defense giant, decided on a new treasury system, it selected Calypso, opting for the kind of risk management muscle usually associated with banks.
“Volume-wise, we’re like a small bank,” says Andreas Drabert, head of treasury controlling at EADS and sponsor of the selection and implementation project. “A corporate system couldn’t quite give us all the capacity and features we need. We have a strong order book and subsequently big currency exposure, mainly to USD and, to a smaller extent, towards GBP.”
There are other differences between bank and corporations in terms of regulatory risk and how to allocate risk capital. “We looked closely at corporate systems and banking systems,” Kohl says. “The classic corporate systems were very good at cash management but not as strong at risk management. We had to decide which camp we wanted to be in and with whom to close the gap.”
EADS manages big cash—some 15 billion euros of cash, cash equivalents and securities, as of June 30—and through its cash pooling process it consolidates the transactions in the hundreds of bank accounts of almost 200 subsidiaries globally. But the value of top-notch tools is even greater around the company’s OTC currency derivatives—$84.1 billion as of June 30—made up primarily of foreign exchange forward contracts. Calypso brings the best tools around trading, confirming and booking those transactions and providing accounting.