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Treasury transformation on a grand scale

Company profile

Open Text is a global leader in Enterprise Information Management (EIM). Growing rapidly since it was founded in

1991, it has deployed approximately US$6.2bn of capital and completed 56 acquisitions. Total annual revenue has

grown over the past 20 years from approximately US$10m to about US$1.8bn today.

The challenge

Open Text was approaching 400 group bank accounts with 92 banks

across 35 countries covering 122 entities. On average, it had five

banks per country (except in the USA where there were 16 banks) and

four accounts per bank. This created a number of challenges.

On an administration front, it presented issues around bank access,

opening, closing and amending accounts, people changes, signatory

management, and banking services and system connections. In

addition, it was facing significant KYC demands and was clearly not

able to leverage banking systems to their full extent.

The time and resources available to manage the busy function were

found to be lacking. Treasury was running the risk of inefficient

processes, especially around payments (it was running multiple systems)

and investments (where there was no liquidity pooling capability).

Treasury woes did not end here. It also had to endure a lack of

visibility and transparency around key data sources, and was facing a

higher risk of security breaches and potential fraud. On top of this,

the structure and disparate nature of its systems were simply

becoming too expensive to maintain.

“We had an unsustainable banking network and historically, most of

our acquisitions were not fully integrated into the global treasury

centre in Canada,” said Jonathan Burkhead, Director Global Treasury.

Moreover, the treasury centre lacked the resources required to

manage the scale and complexity of transactions, he added.

“We reached a tipping point with the acquisition of GXS; something

had to change.”

A benchmarking report prepared by Citi, positioning Open Text

relative to its peers, indicated the extent of its problems but also

highlighted key openings for improvement. Indeed, an opportunity

was identified to implement an efficient and integrated banking

network. This would enable the firm to consolidate its banking

network to five primary relationship banks and take a similar stance in

the consolidation of its bank accounts. Across this significantly

simplified set-up it would be able to implement strategic and efficient

cash management and liquidity structures, notably with the addition

of a cash pooling facility.

The solution

Between January 2016 and April 2017, Open Text achieved a

remarkable turnaround of its treasury function. In terms of its bank

account activities, it managed to open resident/non-resident bank

accounts in each country in scope. Across EMEA, NA and APAC, it

opened 116 new strategic bank accounts and set up delivery of bank

statements for all new accounts daily in current BAI or

MT940 formats.

Open Text has developed H2H (host-to-host) connectivity with three

strategic banks through the TMS and through Open Text Managed

Services. Open Text offers treasury products and services to third

party customers that the treasury team was able to utilize. The team

also determined the availability of accounts on payment processing

platforms in each country in scope and ensured appropriate solutions

were in place for incoming/outgoing payments. The company further

implemented best practices where opportunities permitted, for

example opting for electronic over paper payments and collections.

Although having largely transitioned transactions from old accounts to

new, Open Text says this is ongoing. Transitioning the activity is

dependent upon the operating groups of AR, PR and AP as they work

with vendors and customers to make system changes, for example

updating remit to information on their end.

Understandably, electronic bank services have been the subject of

intense focus for Open Text, with the delivery of bank statements and

liquidity reports through Open Text Managed Services connectivity.

In addition, processing of payroll, treasury, accounts payable, and tax

payments in ISO XML format for all countries has been provisioned,

although this is ongoing in some countries.

Liquidity overlay services have been radically revised, with Open Text

identifying pooling structures for multi-currency and multi-entity.

With three new pooling structures established, the firm has set up

the domestic sweep of funds to header accounts by currency and

provisioned for the cross border sweeping of funds to header

accounts, as required.

In addition, the team identified impacts from intercompany pooling

transactions from an FX perspective and executed appropriate loan

and pooling agreements for intercompany lending and

borrowing relationships.

Direct debit and SEPA direct debit payments/collections also came

under the microscope. Treasury identified current users and either

cancelled or set them up on new accounts. It also established

appropriate blocks, filters and mandates where available and rolled

out a new direct debits policy globally. In moving transactions to new

accounts, it managed to significantly reduce the number of

challenging direct debits by vendors that had existed for some time.


Treasury Today’s Top Treasury Team

Open Text Corporation

Jonathan Burkhead, Director Global Treasury

Darlene Halliwell, Project Manager

Jonathan Burkhead and Brian Leibforth, Open Text Corporation, Simon Jones,

J.P. Morgan, Paula McCool, Citi and Lesley White, Bank of America Merrill Lynch

Winner video interview treasurytoday Adam Smith Awards © August 2017 | 7