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Innovation In Action

For EMC Corporation

Increasing the efficiency and flexibility of global funds investments

The Client
EMC, a USD15-billion provider of products and solutions for storing, protecting, optimizing and leveraging information, generates its revenues from operations that span more than 60 countries. Its treasury operation, centralized at its U.S. headquarters, manages and invests nearly USD6 billion in cash on behalf of EMC's business units.

The Challenge
To strengthen its business and tap new markets, EMC acquired more than 30 growth-oriented companies around the world between 2004 and 2008. These acquisitions created new business opportunities and contributed to six straight years of double-digit revenue growth. However, they also created new challenges related to managing, controlling and investing cash.

In response, the company centralized overall treasury and cash management responsibilities in the U.S. Then its Treasury Department, working with its International Tax Department and Citi, implemented an automated target balancing solution to mobilize funds from the local level to pooling structures in the U.S. and Ireland, centralizing funds in more than a dozen header accounts in various currencies.

"Thanks to Citi, we've been able to use technology to create a streamlined and efficient cash-consolidation structure that requires little human intervention," says Daisy Alba, EMC's Global Cash Manager.

Her department, however, did face human-related challenges in meeting time-zone constraints when transferring and investing cash in Euro- and Sterling-denominated money market funds and time deposits.

"On a day-to-day basis, we have a very good idea of how much cash we have to fund our accounts," says Leandro Manavella, Principal Treasury Analyst, who manages the cash positions for Europe from EMC's U.S. headquarters. "But it was extremely inconvenient to manage urgent next-day funding needs from European accounts while based in the U.S. because of early morning cutoffs."

Leandro would get up at 6:00 a.m. to review and analyze data and communications from Europe to be ready to place a position before 7:30 a.m.

The Solution
EMC told Citi that future-dated trading would solve its problem. Without hesitating, the Citi team went back to the drawing board.

In just a matter of months new features were added to the system, providing the ability to book transactions outside trading hours, including holidays and weekends. Users gained the ability to store trade details for money market funds and time deposit products and execute trades based on a future value date of up to five days. They were also given the ability to cancel their future-dated trades online, if necessary. Indicative rates are displayed when trades are entered and real rates are applied when they are executed.

The Result
EMC became the first company to pilot the new solution.

Today, the company's Treasury Department is enjoying the added flexibility and convenience of the new capabilities. In fact, "flexibility" is a word that Daisy Alba uses a lot to describe why EMC chose Citi to meet the company's cash management and liquidity needs.

Explaining why she asked Citi to enhance its capabilities, rather than consider switching providers, Alba said: "We liked the flexibility of Citi's Online Investments technology, including its reporting capabilities, and the ability to diversify EMC's investments. We use the system to invest in a number of funds from different institutions."

She also noted the flexibility of the Citi team. "It's not every day that you explain a situation to a provider and have them turn around a solution that works in such a short period of time," she added. "The solution really was about listening to the voice of the customer."

But, most importantly, Alba says that she and her team are delighted with the benefits of future-dated trading: "It has really added more efficiency, more flexibility and more value to our processes — every day."