What's Neu - News from the The NeuGroup Network of Peer Groups

Blog entry
By afriberg, August 16, 2017
The two NeuGroups for FX risk managers, FXMPG and FXMPG2, share several key items on the agenda for their respective meetings in Chicago, Illinois, and Palo Alto, CA. 
 
Following a review of member projects and priorities, both groups will launch into discussion on risk management, performance tracking, and trading and execution, among other current trends and challenges.
 
Risk management strategy deep dive. In a session designed to compare and contrast how risk management objectives and hedge strategies link up, a few members in each group will open their strategies and objectives up to scrutiny and benchmarking with their peers. A goal of the session is to examine different hedge targets, approaches, instrument choices and hedge tenors.
 
Dashboards for the FX function. What dashboards are members using or trying to develop to adequately track the performance and results of the FX function’s activities, and how do they differ by specific job function and/or who the audience is? Members must consider the key components of the job that needs to be measured and how to track and present them in a meaningful way.
 
Workflow in FX; best practices in FX trading and execution. How should the FX workflow be designed for smooth operations and integration with other necessary technology in treasury? Higher volatility puts trading and execution practices – and their associated costs or savings – front and center. The respective meeting sponsors will weigh in on this topic, and members will share how they have designed their workflows in the context of their technology infrastructure.
 
Thomson Reuters will sponsor FXMPG, and 360T will sponsor FXMPG2. 
 
For more than two decades, NeuGroup has lead the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates over 30 face-to-face meetings to inform actions, transform practices, and enhance careers for more than 400 members from across treasury and finance functions, covering multiple industries and global regions. Visit www.Neugroup.com for more information about peer groups and www.iTreasurer.com for content and news.
 
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Blog entry
By thoward, August 10, 2017
This month’s issue of iTreasurer has a tax and regulatory theme, starting out with some of the downsides of one possible outcome of tax reform and ending with a story on new aspects to hedge accounting rules. In between we discuss coming money market reform in Europe, the benefits of FX algos and much more.
 
With the failure to repeal Obamacare a fractious Republican party is looking to come up with a viable tax reform package. One feature of reform long sought after—and sometimes considered a kind of tax reform appetizer—is a repatriation holiday, and on page 1 in “Cash Repatriation Has Downside Potential” we discuss some issues if it comes to pass. Currently US corporations hold approximately $2.6 trillion in cash overseas, but as that cash has accumulated, so has its importance in ratings for MNCs. One aspect of this is “net debt,” which agencies have factored into their ratings; the assumption being that cash held overseas can be used if necessary to service debt.
 
However, looming tax reform has prompted concerns about the validity of that theory and could result in ratings downgrades. That’s because MNCs have borrowed aplenty in the current low-interest rate environment. S&P surmises that repatriated cash would be distributed to shareholders through dividends or share repurchases and not to pay down debt.
 
On pages 4 and 5, iTreasurer takes a quick look at managing counterparty risk and how it’s easier articulated than executed. Also finding the right treasury structure and exploring different methods for cash forecasting.
 
In “MMF Regulation 2.0 About to Hit” on page 6, contributor Barb Shegog explains how money market fund regulation, similar to that imposed in the US, is about to descend on European MMFs. “Although both the US and European markets will experience similar regulation changes, the Euro market dislocation should have less of a market impact than the SEC regulation changes to the US market,” writes Ms. Shegog. That’s because the European regulation changes are not as extreme and European investors are more familiar with the regs.
 
This month’s peer group meeting summary is from the NeuGroup’s Assistant Treasurers’ Group of Thirty. Members of the group in that meeting discussed a wide range of topics, including planning for tax reform, a shift in risk attitudes (toward derisking) as well as predictions for slower growth globally.
 
On page 11, contributor Anne Friberg discusses how FX algorithms can save transaction costs and improve efficiency. “FX managers are discovering the benefits of algo trading, particularly the ones that improve execution performance and save on trading costs,” writes Ms. Friberg.
 
In “Is Your Treasury Team Prepared for the Digital Future?” contributor Julie Zawacki-Lucci suggests that “bolder transformational thinking about treasury organization and talent management [will be] needed to ride the digitalization wave and prevent what one NeuGroup peer group member labeled the ‘tsunami effect’.”
 
Finally on page 14 contributor John Hintze, with help from Chatham Financial, fleshes out FASB’s amended hedge accounting standards and what it means for companies that adopt the standards early.
 
Enjoy the issue.
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Blog entry
By bshegog, August 09, 2017
The Assistant Treasurers’ Group of Thirty meets the FX Managers’ Peer Group 2 this September in a special joint meeting at HP Inc. 
 
Together, two of NeuGroup’s long-standing peer groups will discuss global financial markets, as well as the new FX ecosystem. 
 
To kick off the meeting, AT30 sponsor HSBC will touch on the implications of tax and regulatory changes in the US. Updates to the tax code have the potential to impact business operations and liquidity planning. How are both groups preparing in the interim? And later, FXMPG2 sponsor 360T will update members on new corporate FX practices. Regulations like Dodd-Frank, EMIR and MiFID II have driven changes aimed at promoting transparency and reducing systemic risk in financial markets. Coupled with larger trends, including that toward platform trading, the operating environment for that actors in the FX markets has changed. Now, what do corporate treasury practitioners need to know to benefit?
 
On Day 2, an AT30 member will walk through his company’s system integration project, for which his team received a highly commendable Adam Smith Award. How was the company able to adjust its US-based system to communicate globally? And how can other companies use modern technology to standardize operations?
 
Members can also look forward to a session on cybersecurity, led by an AT30 member in the healthcare industry whose company practices extreme cyber-risk management. Today, cybersecurity is largely seen as a corporate-wide issue, calling for employee training and awareness. To close, the group will review processes that can be implemented to prevent important data from getting into the wrong hands. 
 
For more than two decades, NeuGroup has lead the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates over 30 face-to-face meetings to inform actions, transform practices, and enhance careers for more than 400 members from across treasury and finance functions, covering multiple industries and global regions. Visit www.Neugroup.com for more information about peer groups and www.iTreasurer.com for content and news.
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Blog entry
By thoward, July 11, 2017
This month’s issue of iTreasurer begins with the mundane but important function of custody banks and ends with a look at the effective cybersecurity structures some companies in the NeuGroup universe are using. In between a summary of the NeuGroup’s Treasurers’ Group of Thirty Large-Cap Edition meeting as well as a best practices story on payment cards.
 
On page 1 of the issue contributing editor Barb Shegog discusses custody banks and how they don’t get a lot of love from treasurers. And yet they provide “significant support services to the investment program.” But most investment managers and many in NeuGroup peer groups “only rate their custodian as average.” The problem is that switching to something better is a dreaded exercise. “Many members dread a switch so much they stick with the status quo even if it isn’t really working. Have investors given up on excellence?” wonders Ms. Shegog.
 
In “Anticipated Exposures” on pages 4-5 we take a look at how the treasurers’ role is continuing to change and that their status as the go-to strategic person in the company is a trend that is stronger than ever. We also examine how companies should evaluate operating in high-risk countries—either political, social, financial, economic or environmental. How do companies make investment decisions in such high-risk countries and evaluate risk vs. return parameters on short-term as well as long-term investments? Also a look at how companies should “take stock of recently amended record-keeping requirements, which should be easier to comply with and provide an opportunity for treasury to ensure its systems are capturing and retaining the information correctly.”
 
The T30LC peer group summary reveals that tax reform remains a top concern for treasurers of the some of the world’s largest companies, although they have plenty of other issues to consider. One is their banks’ share of wallet and how much business one has to support the credit group—and how to right-size it. Also, members were made aware that getting what they wished for on, say, a cash repatriation tax break does have perils; that is, activist investors will look to grab any cash distributed to shareholders, which could have an impact on corporate capital structure and ratings. Also discussed were best practices for frequent bond issuers. 
 
In “How to Create a Best-in-Class Commercial Card Program—the (Not So) New Payment Channel,” contributor Geri Westphal sits down with experts from HSBC to discuss commercial card programs. These programs have been around for years, and in most cases they included T&E expenses and a select number of procurement transactions. “Now, as key stakeholders across the buyer’s organization realize the benefits associated with commercial cards and with the increase in fintech innovation, commercial card programs are being structured to capture more, if not all, payment transactions across the entire organization.”
 
Finally, in “The (Inadvertent) Enemies Within” on page 15, we discuss the growing practice of hackers gaining entry to the company’s treasure—be it data, cash, or just systems in general—using naive employees. The answer to keeping hackers in check is an active response team.
 
Enjoy the issue.
 
For over 20 years, iTreasurer has delivered intelligence for treasurers. Based on exclusive access to senior treasury executives who are members of The NeuGroup Network of treasury peer groups, iTreasurer takes their real-world experience to produce articles, case studies and reports that are specifically meaningful to treasury best practice. www.iTreasurer.com.
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Blog entry
By aorwick, June 19, 2017
The Treasurers’ Group of Thirty (T30) anxiously awaits tax reform and other potential economic boosters.  
 
Here is a summary of key takeaways from the group’s recent meeting at Nasdaq:
 
Will tax reform ever arrive? Some kind of tax legislation is likely to become law this year. However, it probably won’t be the radical reform favored by House Speaker Paul Ryan and many Republicans in Congress. That is unless a bill is introduced by the start of August, given procedural hurdles and other challenges, including the 2018 budget and raising the debt ceiling. The radical tax reform would up end the current corporate and individual tax systems, eliminating the corporate income tax completely and instituting a consumption-like border adjustment tax (BAT). Lesser reform could lower the corporate rate, require repatriation of corporates’ trapped cash and introduce a territorial tax system, according to KPMG’s Kathleen Dale, principal, international tax accounting. The tax legislation must be revenue neutral to skirt an almost certain Democratic filibuster and avoid expiring in 10 years, and to do so, BAT will be necessary to generate tax revenue, although it faces stiff opposition from US importers.  Another controversial component of the “House Blueprint” is the elimination of interest expense, given the impact it would have on corporate funding sources. 
 
Repatriation: Bet on it. Companies are chomping at the bit to repatriate stranded cash, Ms. Dale said, and moving to a territorial system to tax overseas earnings is a necessity or companies will continue to hold cash overseas. The Republicans need some sort of tax win, should more radical reform prove elusive, and a territorial tax system fits at least part of the bill. “I think it’s very likely we’ll get mandatory repatriation before the 2018 midterm elections,” she said. That was a key takeaway for one member, who said his treasury would have to rethink how it wants to position itself.
 
Forget about the 10-year rising. Esteban Burbano, portfolio strategist at PIMCO, said the bond giant sees the today’s low rate environment continuing indefinitely, even if Republicans achieve tax reform or other potential economic boosters. Aging populations, weak productivity growth and loads of debt will result in a world of muted inflation and growth around 2%. In the immediate wake of President Trump’s election, PIMCO’s fixed-income savants wondered whether the trajectory might improve somewhat, and indeed equity markets rose dramatically, apparently pricing in those hopes. But since then, the difficulty of implementing a pro-growth agenda has sunk in, creating a challenging current market. Despite inflation falling in recent months, PIMCO still sees the Fed raising short-term rates twice more this year, if only to build monetary firepower to counter the next economic downturn. 
 
Uncertainties prompt PIMCO to tighten belt. PIMCO’s debt portfolio has leaned more conservative, not because the money manager has a pessimistic economic outlook, but because uncertainties abound: the rise of populism around the world, China’s National Congress meeting later this year and its subsequent leadership changes, possible missteps by the Trump Administration and the list goes on. PIMCO forecasts 2.25% global growth for 2017 compared to 2% last year, “but we’re worried about the tails,” Mr. Burbano said. Consequently, the money manager has lowered its overall investment duration to between five and seven years, while hedging at the front and long ends of the portfolio.
 
Cyber insurance ubiquity. One member asked how many attending companies had cyber insurance, and most responded affirmatively. Members discussed property and errors and omissions (E&O) policies that cover some form of cyber risk. One participant noted that phishing and fraud typically aren’t covered by those policies, and that his firm has a separate policy to cover that risk for up to $1 million, for “next to nothing” in terms of premium. He emphasized, however, that companies must put in place training programs or face higher risk. Another noted an instance where a fraudster changed a remittance instruction and the company sent 350,000 euros to a destination in Poland. Fortunately, Citibank flagged the transfer and recovered the funds. “So we immediately issued a policy where changing the remittance instructions requires making a call to insure accuracy.” Another member took on a $5 million policy last year with a low premium but a $1 million deductible. “It’s important to have this cheap insurance but not rely on it,” he said. 
 
For more than two decades, NeuGroup has lead the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates over 30 face-to-face meetings to inform actions, transform practices, and enhance careers for more than 400 members from across treasury and finance functions, covering multiple industries and global regions. Visit www.neugroup.com/brochure/about-peer-groups for more information about peer groups and www.iTreasurer.com for content and news.
 
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Blog entry
By aorwick, June 13, 2017
The Assistant Treasurers’ Leadership Group considers the likelihood of tax reform, methods for pricing intercompany notes and where to invest cash in recent meeting at Chatham Financial. 
 
Here is a summary of key takeaways from the meeting:
 
The early bird gets hedge-accounting treatment. FASB has addressed new hedge accounting guidance and plans to issue the final language toward the end of June. Chatham Financial anticipates many companies adopting the amended accounting standard early – at the start of a company’s fiscal year after Dec. 31, 2017 – because it facilitates achieving hedge accounting in several ways. For one, components of risk can be hedged if they are contractually specified. Corporates that had term loans in place during the last financial crisis at times saw the prime rate set lower than Libor. However, they could not switch to prime because it wasn’t a benchmark, and all-in cash flows had to be considered, increasing variability and ineffectiveness and prohibiting hedge accounting treatment. Under the new guidance, they’ll be able to if it is contractually specified. Commodity users may be the biggest beneficiaries. They will be able to contractually specify the key economic component to hedge, whereas today variable elements such as transportation and processing are included in the hedge, jeopardizing hedge accounting. Aaron Cowan, global leader of corporate accounting advisory services at Chatham, said corporates early on must adapt their hedging policies and align with auditors on what the accounting outcome will be. Mandatory compliance begins after Dec. 31, 2018.  
 
Don’t bet on radical tax reform. KPMG pegged the chances of radical tax reform at 30% before the ACA repeal-and-replace debacle earlier this year, and now chances are even less, said Kathleen Dale, principal at KPMG. To have a chance of enacting such reform before 2018 elections, it is imperative that the House introduces a bill by the start of August, but the outlook is grim. Radical reform encapsulated in a plan published by House of Representative leaders a year ago, referred to as the “blueprint,” would eliminate interest-expense deductibility and move to a destination-based and territorial corporate tax system to pay for a drop in the corporate rate, to 20% from 35%. The Trump Administration’s one-page summary proposes dropping the corporate rate to 15%, eliminating unspecified tax breaks for “special interests” and moving to a territorial tax system, but not much else on the corporate side. Desperate for a tax win before 2018 elections, Republicans may settle on bits and pieces, such as a lesser drop in the corporate rate and switching to a territorial system. Also likely is a mandatory repatriation tax, supported by both Democrats and Republicans, if for different reasons. 
 
Why BAT? The border adjustment tax (BAT) taxes imports and not exports and highly favors U.S. companies that source and produce their products and services domestically. It’s a key element not only to incent companies to create jobs in the U.S., but to provide a major source of tax revenue for the corporate rate drop. Without it, lowering the rate below 28% isn’t feasible, if tax reform is to remain revenue neutral and not sunset after 10 years. The Trump Administration makes no bones about its proposal failing to achieve revenue neutrality, saying the anticipated economic growth warrants the risk of being unable to renew the law. BAT is designed to mimic many aspects of the value added tax (VAT) prevalent in most developed countries, so it will not be considered an unfair trade subsidy by the WTO.
 
Cash investment conundrum continues. ATLG members exchanged ideas about where to invest cash in the low, even negative interest-rate environments.  Australian banks are paying favorable rates for three-month deposits of USD – one member cited 1.38%. Often the three-month tenor is based on a handshake deal: The bank will pay a decent, if slightly lower, rate for the generally sticky deposits, and in return, the corporate can withdraw the cash sooner if necessary. A few members spoke about dividing cash among short-term, medium-term and longer-term buckets, although less so in the latter these days given the likelihood of mandatory repatriation. “Given the cash we have to today, we would [normally] be allocating more to the longer-term bucket,” said one. “But in light of potential tax reform and repatriation, and since most cash is offshore, we wouldn’t want to add to the risk of having to repatriate.” 
 
Pricing intercompany notes. Noting audits by tax authorities of his company’s intercompany notes, one member solicited suggestions on how to price them. He noted one method involves determining a subsidiary’s stand-alone credit rating and from there deriving a credit spread, although such a rating may not be readily available. A bank recommended using revolving-credit pricing in the specific country as a proxy for the cost of funds there, he said. Another approach may be to strip away the underlying treasury-bond benchmark from the weighted average cost of the parent’s debt and replace it with a spread appropriate for the subsidiary, rated typically one or two notches lower. Another member pointed to an asset-based facility covering a number of subsidiaries that provides an approximation of the market rate, which can then be used for entities outside the facility.  
 
For more than two decades, NeuGroup has lead the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates over 30 face-to-face meetings to inform actions, transform practices, and enhance careers for more than 400 members from across treasury and finance functions, covering multiple industries and global regions. Visit www.neugroup.com/brochure/about-peer-groups for more information about peer groups and www.iTreasurer.com for content and news.
 
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Blog entry
By thoward, June 12, 2017
From taxes to accounting, the June issue of iTreasurer covers a wide variety of topics, from taxes to new hedge guidance with several stops in between.
 
Beginning on page 1 is a story about how countries are weighing the implementation of the ongoing Organisation for Economic Co-operation and Development project known as BEPS or base erosion and profit shifting. The BEPS plan encompasses 15 action items that are intended to “equip governments with domestic and international instruments to address tax avoidance,” according to the OECD. But the actions are considered “soft rules” and member-country lawmakers can implement them at whatever level of severity they choose. And this will be an important balancing act. Countries do want to collect as much tax revenue as they can; however, they do not want to scare business away either. “My new tax philosophy is not exactly ‘the more, the merrier,’” said Carrie Lam, the new chief executive-designate in her first public speech.
 
On page 6 iTreasurer looks at data from Fitch Ratings Agency that show cash is trickling back to institutional prime money market funds, pulled in by stable net asset values and widening spreads. However, “trickle” is the operative word here in that it is likely that the levels of cash going to prime institutional funds will never reach the pre-reform highs.
 
In the summary of the NeuGroup’s FX Managers’ recent meeting, we hear what group members discussed about the dollar’s prospects and the Fed. Members also received an update about changes to hedge accounting requirements; discussed using options vs. forwards and debated best FX trade execution.
 
On page 11 we discuss how time is running out for those companies that want to get ahead of new FASB hedge accounting guidance that will kick in in 2018. Heavy commodity users should consider adopting early, contributor John Hintze says, because of “several advantageous provisions in the new guidance.”
 
In “Getting to ‘Know Your Customer’ Is a Major Pain” on page 12, contributor Geri Westphal discusses how the KYC “process has become extremely manual and over burdensome with many corporates complaining about the amount of documentation required and the extremely slow response times.” But fintech could help, particularly Blockchain technology.
 
Talent is the subject of a story on page 14, where contributor Julie Zawacki-Lucci delves into a recent exchange between treasurers discussing whether assistant treasurers (AT) should hold a VP title. A majority of those who spoke up said their ATs do not have a VP designation and were reluctant to start handing them out. The reason? Title inflation.
 
Finally, on page 15 we discuss recent goings-on with Brexit. Most observers feel that it will be an orderly exit of the UK from the European Union. However, that doesn’t mean there will not be some tough negotiations and ruffling of feathers. One area that Europe is trying to get its hands on is the highly profitable euro clearing business that is mainly based in London. The EU is busy trying to make this the outcome post-Brexit, with its Executive Commission “readying a draft law on euro clearing with France at the forefront of eurozone countries angling for a piece, if not all, of the lucrative business.” 
 
For over 20 years, iTreasurer has delivered intelligence for treasurers. Based on exclusive access to senior treasury executives who are members of The NeuGroup Network of treasury peer groups, iTreasurer takes their real-world experience to produce articles, case studies and reports that are specifically meaningful to treasury best practice. www.iTreasurer.com.
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Blog entry
By bshegog, June 07, 2017
Balancing the delicate relationship between the risk group and the strategy team is a challenge for the NeuGroup’s Corporate ERM Group. 
 
ERM members recently gathered at Mastercard in Purchase, New York, to discuss risk strategy and mitigation. Here are some highlights from the meeting:
 
There’s a balance between taking too much risk and not taking enough. In addition to identifying emerging risks, members recognized various ways to measure risk. A common struggle is the tradeoff between asserting too much control over risk and driving up operational costs and taking too much risk for the corporation. One member described this process as taking calculated risk. Members also discussed managing personal risk tolerances and not letting those bias corporate risk policies. 
 
The biggest cyber risk threats are not external forces but the internal forces in a company. Ronald Green, Chief Security Officer of Operations and Technology at Mastercard, shared his thoughts on internal security threats. Employees clicking on false links or responding to “fake” employees is an increasing problem, Mr. Green said. Theft of intellectual property is another problem that risk managers need to address. 
 
Members left the meeting prepared to use alternate sources of data, improve ERM reporting and train the next generation of ERM practitioners.
 
For more than two decades, NeuGroup has lead the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates over 30 face-to-face meetings to inform actions, transform practices, and enhance careers for more than 400 members from across treasury and finance functions, covering multiple industries and global regions. Visit www.neugroup.com/brochure/about-peer-groups for more information about peer groups and www.iTreasurer.com for content and news.
 
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Blog entry
By bshegog, June 06, 2017
The Treasury Investment Managers’ Peer Group 2 talks tax reform, counterparty risk and vehicles for short-term liquidity in meeting sponsored by Capital Advisors Group. 
 
In an effort to prepare for possible tax repatriation and the transition from high government money market fund balances to a higher yielding alternative, members reviewed their investment options during the H1 gathering at Autodesk. Here are some themes from the discussion:
 
Money market fund reform has provided challenges and opportunities, noted Ben Campbell, CEO and CIO of Capital Advisors Group. There’s no doubt that MMF reform has significantly impacted investment management. Because of the regulation’s fees, gates and floating NAV, the market has seen a shift in the investment landscape, with over a trillion dollars leaving the funds. Several sessions were dedicated to filling the prime fund void. 
 
Fed is on the move in more ways than increasing Fed Fund Rates. The market is pricing in 100% probability of a June Fed rate increase, and three more increases are expected before January 2018. Adjusting Fed rates is certainly the most visible and well-reported mechanism the Fed uses to control interest rates. However, it’s also important to keep an eye on the Fed’s balance sheet normalization, said Lance Pan, Director of Investment Research at Capital Advisors Group. The divesture of the $4.5 billion in assets on the balance sheet will have significant implications for the fixed income market. Mr. Pan walked members through the impact this divesture will have on the corporate investment portfolio. 
 
For more than two decades, NeuGroup has lead the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates over 30 face-to-face meetings to inform actions, transform practices, and enhance careers for more than 400 members from across treasury and finance functions, covering multiple industries and global regions. Visit www.neugroup.com/brochure/about-peer-groups for more information about peer groups and www.iTreasurer.com for content and news.
 
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Blog entry
By jneu, June 02, 2017
At a time when treasurers have a lot to process, judgement may get lost in the need to get things done during the next-wave transition to digitalization.   
 
Treasurers’ Group of Mega-Caps members met for their (rescheduled) 2017 H1 meeting on May 17. Planning for tax changes, particularly the potential use of repatriated cash, remains a key priority for members. However, highlights of the day also included a presentation on planning for the digitalization of treasury and the resulting need to recruit staff members skilled in data visualization and software languages, including R and Python. Right on cue, one member discussed how the company’s machine-learning tool helped forecast accounts receivable with 15%-20% less volatility. This prompted some members to voice concern that overreliance on data may leave some treasury departments with staff lacking the judgment and real-world experience required to react appropriately to change.
 
Surfing the digitalization wave. Rapid advances in automation and digitalization present both immense opportunities and challenges for treasurers unsure if their staffs and platforms are well positioned for what one treasurer calls the “digitization storm” that’s creating “non-specific anxiety about the future.” To ride the wave and prevent what this member has labeled the “tsunami effect,” treasurers must look within and beyond their departments to find staff skilled in data visualization tools to aid in forecasting, including programming languages R and Python, and encourage learning of required skills. But as one presenter half-joked, “Excel is really hard to kill,” suggesting this transformation will take time as treasury moves outside its comfort zone and embraces new tools. 
 
Redefining treasury. The uptick in technology change is also impacting treasury transformation projects. One member described “immense change” as he pushes to move his treasury department “into the 21st century,” improve risk management and complete a 10-year “journey” to get SAP implemented across all businesses. He and others described ongoing efforts to define what duties fit into core treasury, what can be relegated to service centers and what doesn’t belong in treasury. Most members agreed that while centralization is key for control, a model based on “following the sun” that shifts responsibility and oversight to regional treasury centers as the sun moves from Asia to Europe to North America is optimal. Also deemed ideal but not common is what one member has achieved: having M&A valuation report to treasury, avoiding what another treasurer described as having 10 groups come up with 10 different costs of capital when evaluating a deal or relying on a corporate finance team that, as another member said, “will make any deal look right.” This valuation role is consistent with the increasing need for treasury to support broader business goals as some functions like cash management are automated.
 
Finally, as members confront the reality of digitalization forcing change on the treasury of the future, some found common ground in warning that overreliance on data will leave departments ill-equipped to deal with real-life scenarios requiring hands-on experience. “I get a little worried about judgment versus data. We’ve seen this movie before,” said one member, also mentioning the issue of pushing too much responsibility to shared service centers. That said, there is widespread recognition that treasury needs to make use of new cloud-based tools and find staff well versed in the tools and programming languages that will allow more senior treasury members to make better decisions and focus on supporting broader business goals.
 
For more than two decades, NeuGroup has lead the way in peer knowledge exchange for treasury and finance professionals. With an unrivaled network of 18 invitation-only peer groups, NeuGroup facilitates over 30 face-to-face meetings to inform actions, transform practices, and enhance careers for more than 400 members from across treasury and finance functions, covering multiple industries and global regions. Visit www.neugroup.com/brochure/about-peer-groups for more information about peer groups and www.iTreasurer.com for content and news.
 
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