2024 Public Sector Perspectives

Long-term vision Although the nature of WV’s work requires Global Treasury to respond quickly to unforeseen challenges, the department’s transformation has largely followed a blueprint developed in 2008 by Powers and Ashwin Ramji, Global Assistant Treasurer. After careful consideration, Powers and Ramji developed a strategy and roadmap with goals including: • the centralization of all foreign exchange risk management activities within Global Treasury to capture a holistic view, leverage expertise and technology, and minimize transaction costs; • 18-month cash flows forecast on a rolling quarterly basis to smooth cash flows and improve cash management; • the centralization of payables and purchasing operations to ensure effective foreign exchange risk management by aggregating exposures; and • the consolidation of global bank accounts with preferred banking partners to provide transparency of operations and protection of cash. In the years since the strategy was devised, Global Treasury has achieved much of what was planned. Although the strategy focused primarily on foreign exchange strategy, its recommendations have touched all aspects of Global Treasury. The strategy has allowedWV to determine the level of risk that it is willing to accept as a consequence of operating in countries with underdeveloped capital markets and tomanage that risk efficiently. The team has worked diligently to establish a high degree of trust within the organization and partner with banks and technology providers to incrementally achieve efficiencies. Only on rare occasions has it adopted a “big bang” approach. One example was WV’s bank rationalization project, which overhauled the organization’s approach to banking partners. Stronger relationships were established with a select few global banks (including Citi) that matched WV’s operating footprint, significantly reducing the number of physical accounts in use throughout the partnership, improving transparency of fees and other costs. Technology is key Underpinning Global Treasury’s past and future success is its willingness to push the boundaries of technology: it has adopted a bold approach compared to many other GDOs and especially given its constrained budget. WV was one of the first GDOs to register its own SWIFT BIC in 2009, following SWIFT’s introduction of its SCORE program that allowed corporates to formally register with SWIFT rather than rely on access through SWIFT consolidators or bureaus. Global Treasury has leveraged its BIC to gain greater visibility of global bank balances and transactions across its operations around the world. While initially intended to assist Treasurers roundtable In 2011, along with Catholic Relief and Childfund, World Vision established the Treasurers Roundtable. The purpose of the coalition of treasury leaders at major global development organizations, foundations and educational institutions is to share treasury management challenges, experiences and best practices, as well as advocate for their interests with regulators and government. The Roundtable has monthly webinars and convenes in person once a year for a broad program looking at banking, financial, compliance and technology issues. It also operates an online members’ chat for practitioners to share information candidly and confidentially among their peers on topics ranging from bank relationships to treasury management systems. The forum has done much to encourage collaboration and develop a strong community of treasury and insurance professionals with shared interests and objectives. The same drive that prompted Global Treasury to help establish the Treasurers Roundtable has more recently resulted in the development of its treasury innovation, leadership and education (TILE) function. TILE is intended to address persistent challenges across the sector, not just through advocacy but also through innovative use of technology, reflecting the ethos of WV’s own Global Treasury. Global Treasury to develop the rolling cash flow forecast planned in its blueprint, that visibility has made Global Treasury the organization’s “source of truth” for such data, which can be used to achieve efficiencies in other departments. For example, Global Treasury is currently supporting Global Finance’s project to automate general ledger (GL) reconciliation processes using that bank transaction data. Like many corporate treasuries, the biggest technology spend in Global Treasury’s budget is its treasury management system (TMS). Dissatisfied with the limitations of prior systems, Global Treasury launched an RFP process in 2018. Vendors participated in two rounds of demonstrations, each with increasingly complex scenarios using WV’s own data, the result of which determined the final selection. While many corporate treasuries utilize their TMS to achieve efficiency within their departments, Global Treasury sought to use its TMS to achieve end-to-end automation from its clients (each WV entity) to its cash management and foreign exchange units. For example, the TMS allows clients to forecast their unique cash flow needs while giving Global Treasury visibility of both global liquidity and risk exposures; this information is automatically routed to Global Treasury’s trading platform and back to the TMS. Global Treasury has now been a customer of its current TMS provider for over five years and has built a strong relationship. In fact, Ramji participates on the provider’s Client Advisory Board, which gives WV a voice in setting product’s future direction. In addition to leveraging its TMS for the GL reconciliation process, Global Treasury is partnering to automate and route payables. Previously the responsibility of individual offices, WV began developing and implementing shared service centers in key locations to centralize support functions and reduce costs. Global Treasury has partnered with the shared service center in Latin America to use its TMS to export payment vouchers from its ERP, reformat them according to each bank’s file specifications, and send them directly to each bank using either SWIFT or, in the case of Citi, a host-to-host connection. This capability eliminates significant staff time for manual payment processing, reduces errors, and increases cash security by minimizing the need for online banking tokens. “Implementing the Payment Factory is fairly straightforward,” says Ramji. “But the real challenge has been building a culture of trust across local offices in the region. Although we had done a lot of work to rationalize bank relationships across the organization, local offices valued control over their cash and their relationships with local banks. They didn’t want to give them up. But now that we have demonstrated the value of the Payment Factory as part of the overall P2P process, they are convinced of the benefits and are clamoring to take part!” The Latin America implementation should be completed in 2024, and the P2P team has developed a plan to roll out the Payment Factory across the remaining five regions. Invaluable insights • Engage early – and humbly WhenWorld Vision first began to rationalize its banking relationships globally more than a decade ago, it believed the cost and efficiency gains were self-evident. However, local offices did not always have the perspective to understand why long-standing local relationships were being cast aside and found it hard to see the big picture of how bank consolidation would deliver benefits. “Simply involving local offices in early discussions about overall objectives and options goes a long way towards winning support,” says Ashwin Ramji, Global Assistant Treasurer at World Vision. “It’s certainly something we’ve taken on board for subsequent projects.” • Get tech savvy Treasury teams need to learn the language of technology as treasury processes become increasingly digitized. “Technology and treasury people often don’t speak the same language,” says Ramji. “Inmy experience, there are a lot of commonalities among Treasury and technology topics, especially when it comes to the safety of data. This common way of thinking about challenges and risks makes it possible for Treasury and technology teams to collaborate if they just take the time to understand each other. When that happens, there is tremendous potential to expand Treasury’s influence across the organization through process automation, simplification and transparency.” Citi Perspectives for the Public Sector 71 70 World Vision’s Global Treasury: A Tool Supporting Transformation