Treasuries are undergoing technological transformations to enable their corporations to grow and prosper in a difficult global marketplace. Take Itron, a technology company that builds electric, gas, water and thermal energy meters for utilities. Its 2007 acquisition of Actaris doubled its size overnight and catapulted the company, now with $2.4 billion in annual revenue, into complex global operations and exposures. Since the merger, Itron conducts business in 130 countries using 40-plus currencies through a highly decentralized structure.
The merger was a wake-up call for what had been a basic domestic treasury function. Itron kicked off a finance and treasury reinvention by adopting leading-edge solutions, including migrating to a single global instance of an Oracle ERP system, implementing specialized applications from FiREapps, Reval and FXall, and an IT2 treasury workstation with SWIFT messaging integration.
When Itron looked at its priorities, managing foreign exchange topped the list. “We had more than 50 subsidiaries in 40 countries, each of which was buying and selling in local currencies as well as in non-functional currencies,” Barrie recalls. And each unit used a different instance of a legacy ERP system with a distinct and separate chart of accounts.
“Our exposures at the subsidiary level were hard to see,” he adds. “The only hedging we could do was at the Itron Inc. level and at our offshore finance operation” (a mini in-house bank that handles intercompany loans, located in Luxembourg).
Itron is already on top of its balance-sheet FX changes down to the twitch level. Compared to any treasury workstation—Itron looked closely at five before picking IT2—FiREapps is a sharp-edged tool. “None of the workstations can pull data from the ERPs and slice and dice it like FiREapps can,” Barrie says. “You can upload data into a workstation at the corporate or subsidiary level, but you can’t mine it and analyze it in a workstation like you can in FiREapps. They own the niche for pre-trade data abstraction and analytics. That’s their sweet spot.”
But Itron wanted razor-sharp tools that even FiREapps can’t provide.