Sometime in 2002, Scott Tsujita had finally had enough. The senior vice president of finance, treasury and investor relations for $245 million Hypercom Corp. was tired of relying on bankers for all his foreign exchange and hedging information. Although the Phoenix-based company's exchange rate exposure is in the form of receivables and payables involving overseas suppliers and customers spread across 30 countries in 15 currencies, Tsujita would readily admit to not being an expert in "all the things that go with internal exposure reporting and managing foreign currency risk." Says Tsujita, "I was looking for an independent third party between me and the banks to advise me on how to get the best hedge rates, timely information about currency movements, and how to track our exposures on a more timely basis."

Tsujita hooked up with FiREapps (then known as Rim-Tec), a foreign exchange management solution provider, to develop a more hands-on approach to Hypercom's currency management processes. During the four years of the relationship, FiREapps has helped Hypercom retool its reporting processes and its measurement and execution of hedge contracts at price points that are consistently better than what Tsujita was getting on his own. "Unless you're a foreign currency trader, when they tell you a spot rate, you really don't know how much of a premium has been built into the quote at the time of a forward contract execution," says Tsujita. "It's difficult to measure unless you have real-time spot rate information."

Hypercom's Web-based trading system provides a view of exchange rates offered across multiple financial institutions and the premiums involved, allowing Tsujita to decide whether the cost of a hedge is worthwhile relative to the exposure risk on the company's books. Tsujita is now in the process of incorporating FiREapps' latest application that will export all of Hypercom's foreign currency exposure data from the company's Oracle database in real time; run diagnostic reviews; and allow Tsujita to quantify exposure by currency pair, by entity and in aggregate. The system also contains a decision-making module to help determine the lowest-cost hedging strategy.

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